DEEP INDUSTRIES 2023-24 Annual Report Analysis

Fri, 21 Jun

DEEP INDUSTRIES 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.

DEEP INDUSTRIES Income Statement Analysis

• Operating income during the year rose 11.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 39.3% in FY24 as against 51.3% in FY23.
• Depreciation charges increased by 8.8% and finance costs increased by 30.3% YoY, respectively.
• Other income grew by 130.8% YoY.
• Net profit for the year declined by 16.8% YoY.
• Net profit margins during the year declined from 36.7% in FY23 to 27.3% in FY24.

DEEP INDUSTRIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	3,413	3,819	11.9%
Other income	Rs m	112	260	130.8%
Total Revenues	Rs m	3,526	4,079	15.7%
Gross profit	Rs m	1,752	1,503	-14.3%
Depreciation	Rs m	296	322	8.8%
Interest	Rs m	52	68	30.3%
Profit before tax	Rs m	1,517	1,372	-9.5%
Tax	Rs m	264	329	25.0%
Profit after tax	Rs m	1,253	1,043	-16.8%
Gross profit margin	%	51.3	39.3
Effective tax rate	%	17.4	24.0
Net profit margin	%	36.7	27.3

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DEEP INDUSTRIES Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 2 billion as compared to Rs 1 billion in FY23, thereby witnessing an increase of 97.6%.
• Long-term debt stood at Rs 791 million as compared to Rs 376 million during FY23, a growth of 110.3%.
• Current assets rose 4% and stood at Rs 5 billion, while fixed assets rose 1% and stood at Rs 11 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 16 billion as against Rs 16 billion during FY23, thereby witnessing a growth of 2%.

DEEP INDUSTRIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	13,702	12,564	-8.3
Current Liabilities	Rs m	1,092	2,159	97.6
Long-term Debt	Rs m	376	791	110.3
Total Liabilities	Rs m	15,871	16,166	1.9
Current assets	Rs m	5,120	5,317	3.8
Fixed Assets	Rs m	10,751	10,849	0.9
Total Assets	Rs m	15,871	16,166	1.9

DEEP INDUSTRIES Cash Flow Statement Analysis

• DEEP INDUSTRIES's cash flow from operating activities (CFO) during FY24 stood at Rs 1 billion, an improvement of 28.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -2 billion, an improvement of 44.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 581 million, an improvement of 104% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 152 million from the Rs 83 million net cash flows seen during FY23.

DEEP INDUSTRIES 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	881	1,134	28.7%
Cash Flow from Investing Activities	Rs m	-1,084	-1,564	-
Cash Flow from Financing Activities	Rs m	285	581	103.7%
Net Cash Flow	Rs m	83	152	83.3%

Current Valuations for DEEP INDUSTRIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.3, an decline from the EPS of Rs 19.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 295.9, stands at 15.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 5.0 times.
• The company's price to cash flow (P/CF) ratio stood at 10.9 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	53.3	59.7
TTM Earnings per share	Rs	19.6	16.3
Diluted earnings per share	Rs	19.6	16.3
Price to Cash Flow	x	5.5	10.9
TTM P/E ratio	x	6.4	15.1
Price / Book Value ratio	x	0.6	1.2
Market Cap	Rs m	7,995	14,871
Dividends per share (Unadj.)	Rs	1.9	0.0

Ratio Analysis for DEEP INDUSTRIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY24, from 4.7x 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 21.1x during FY24, from 30.0x 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 8.3% during FY24, from 9.1% 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 10.8% during FY24, from 11.1% 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 6.9% during FY24, from 8.2% 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	4.7	2.5
Debtors’ Days	Days	2,698	1,257
Interest coverage	x	30.0	21.1
Debt to equity ratio	x	0.0	0.1
Return on assets	%	8.2	6.9
Return on equity	%	9.1	8.3
Return on capital employed	%	11.1	10.8

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

DEEP INDUSTRIES Share Price Performance

Over the last one year, DEEP INDUSTRIES share price has moved up from Rs 180.9 to Rs 295.9, registering a gain of Rs 115.1 or around 63.6%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 29,238.6 (up 0.8%). Over the last one year it has moved up from 18,362.7 to 29,238.6, a gain of 10,876 points (up 59.2%).

Overall, the S&P BSE SENSEX is up 22.7% over the year.

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