BHARAT GEARS 2022-23 Annual Report Analysis

Tue, 29 Aug

BHARAT GEARS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

BHARAT GEARS Income Statement Analysis

• Operating income during the year rose 5.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 33.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.0% in FY23 as against 9.5% in FY22.
• Depreciation charges decreased by 1.6% and finance costs decreased by 7.3% YoY, respectively.
• Other income grew by 148.1% YoY.
• Net profit for the year declined by 47.8% YoY.
• Net profit margins during the year declined from 3.5% in FY22 to 1.8% in FY23.

BHARAT GEARS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	7,294	7,664	5.1%
Other income	Rs m	35	88	148.1%
Total Revenues	Rs m	7,330	7,751	5.8%
Gross profit	Rs m	694	460	-33.7%
Depreciation	Rs m	204	201	-1.6%
Interest	Rs m	184	171	-7.3%
Profit before tax	Rs m	341	176	-48.3%
Tax	Rs m	82	41	-50.0%
Profit after tax	Rs m	258	135	-47.8%
Gross profit margin	%	9.5	6.0
Effective tax rate	%	24.1	23.4
Net profit margin	%	3.5	1.8

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BHARAT GEARS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an decrease of -10.1%.
• Long-term debt stood at Rs 709 million as compared to Rs 613 million during FY22, a growth of 15.8%.
• Current assets fell 3% and stood at Rs 3 billion, while fixed assets rose 13% and stood at Rs 1 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 2%.

BHARAT GEARS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,082	1,206	11.4
Current Liabilities	Rs m	2,077	1,867	-10.1
Long-term Debt	Rs m	613	709	15.8
Total Liabilities	Rs m	4,021	4,096	1.9
Current assets	Rs m	2,740	2,649	-3.3
Fixed Assets	Rs m	1,280	1,446	13.0
Total Assets	Rs m	4,021	4,096	1.9

BHARAT GEARS Cash Flow Statement Analysis

• BHARAT GEARS's cash flow from operating activities (CFO) during FY23 stood at Rs 420 million, an improvement of 38.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -263 million, an improvement of 429.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -28 million, an improvement of 91% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 128 million from the Rs -69 million net cash flows seen during FY22.

BHARAT GEARS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	303	420	38.6%
Cash Flow from Investing Activities	Rs m	-50	-263	-
Cash Flow from Financing Activities	Rs m	-322	-28	-
Net Cash Flow	Rs m	-69	128	-

Current Valuations for BHARAT GEARS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.8, an decline from the EPS of Rs 25.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 123.7, stands at 22.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 5.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	712.3	498.9
TTM Earnings per share	Rs	25.2	8.8
Diluted earnings per share	Rs	16.8	8.8
Price to Cash Flow	x	3.2	5.8
TTM P/E ratio	x	5.7	22.5
Price / Book Value ratio	x	1.2	1.6
Market Cap	Rs m	1,323	1,948
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for BHARAT GEARS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.3x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 2.0x during FY23, from 2.8x during FY22. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 11.2% during FY23, from 23.9% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 18.1% during FY23, from 31.0% during FY22. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 7.5% during FY23, from 11.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.3	1.4
Debtors’ Days	Days	722	584
Interest coverage	x	2.8	2.0
Debt to equity ratio	x	0.6	0.6
Return on assets	%	11.0	7.5
Return on equity	%	23.9	11.2
Return on capital employed	%	31.0	18.1

To see how BHARAT GEARS has performed over the last 5 years, please visit here.

BHARAT GEARS Share Price Performance

Over the last one year, BHARAT GEARS share price has moved up from Rs 116.1 to Rs 123.7, registering a gain of Rs 7.6 or around 6.5%.

Overall, the S&P BSE SENSEX is up 10.6% over the year.

(To know more, check out historical annual results for BHARAT GEARS and quarterly results for BHARAT GEARS)