BHEL 2023-24 Annual Report Analysis

Wed, 31 Jul

BHEL has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

BHEL Income Statement Analysis

• Operating income during the year rose 1.6% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 20.6% in FY24 as against 9.9% in FY23.
• Depreciation charges decreased by 4.4% and finance costs increased by 35.2% YoY, respectively.
• Other income grew by 53.7% YoY.
• Net profit for the year declined by 56.9% YoY.
• Net profit margins during the year declined from 3.3% in FY23 to 1.4% in FY24.

BHEL Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	197,989	201,068	1.6%
Other income	Rs m	35,505	54,565	53.7%
Total Revenues	Rs m	233,495	255,633	9.5%
Gross profit	Rs m	-19,624	-41,373	NA
Depreciation	Rs m	2,603	2,489	-4.4%
Interest	Rs m	6,122	8,276	35.2%
Profit before tax	Rs m	7,156	2,427	-66.1%
Tax	Rs m	615	-396	NA
Profit after tax	Rs m	6,541	2,822	-56.9%
Gross profit margin	%	-9.9	-20.6
Effective tax rate	%	8.6	-16.3
Net profit margin	%	3.3	1.4

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BHEL Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 254 billion as compared to Rs 235 billion in FY23, thereby witnessing an increase of 7.7%.
• Current assets rose 19% and stood at Rs 346 billion, while fixed assets fell 14% and stood at Rs 203 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 548 billion as against Rs 527 billion during FY23, thereby witnessing a growth of 4%.

BHEL Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	243,783	244,387	0.2
Current Liabilities	Rs m	235,390	253,579	7.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	527,329	548,294	4.0
Current assets	Rs m	291,539	345,708	18.6
Fixed Assets	Rs m	235,790	202,586	-14.1
Total Assets	Rs m	527,329	548,294	4.0

BHEL Cash Flow Statement Analysis

• BHEL's cash flow from operating activities (CFO) during FY24 stood at Rs -37 billion, an improvement of 401.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 13 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 27 billion, an improvement of 2,885% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 3 billion from the Rs 8 billion net cash flows seen during FY23.

BHEL Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	-7,407	-37,129	-
Cash Flow from Investing Activities	Rs m	14,805	13,309	-10.1%
Cash Flow from Financing Activities	Rs m	890	26,557	2,885.3%
Net Cash Flow	Rs m	8,287	2,737	-67.0%

Current Valuations for BHEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.8, an decline from the EPS of Rs 1.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 316.0, stands at -360.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 5.5 times.
• The company's price to cash flow (P/CF) ratio stood at 111.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	56.9	57.7
TTM Earnings per share	Rs	1.9	0.8
Diluted earnings per share	Rs	1.9	0.8
Price to Cash Flow	x	26.7	111.3
TTM P/E ratio	x	52.1	-360.5
Price / Book Value ratio	x	0.9	2.4
Market Cap	Rs m	231,296	591,132
Dividends per share (Unadj.)	Rs	0.4	0.3

Ratio Analysis for BHEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY24, from 1.2x during FY23. 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 1.3x during FY24, from 2.2x during FY23. 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 1.2% during FY24, from 2.7% during FY24. 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 4.4% during FY24, from 5.4% during FY23. 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 2.0% during FY24, from 2.4% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.2	1.4
Debtors’ Days	Days	6	9
Interest coverage	x	2.2	1.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	2.4	2.0
Return on equity	%	2.7	1.2
Return on capital employed	%	5.4	4.4

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

BHEL Share Price Performance

Over the last one year, BHEL share price has moved up from Rs 104.1 to Rs 316.0, registering a gain of Rs 211.9 or around 203.6%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 75,400.7 (down 0.1%). Over the last one year it has moved up from 44,045.9 to 75,400.7, a gain of 31,355 points (up 71.2%).

Overall, the S&P BSE SENSEX is up 22.8% over the year.

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