FAIRCHEM ORGANICS 2023-24 Annual Report Analysis

Thu, 11 Jul

FAIRCHEM ORGANICS 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.

FAIRCHEM ORGANICS Income Statement Analysis

• Operating income during the year fell 4.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.8% in FY24 as against 11.2% in FY23.
• Depreciation charges increased by 13.8% and finance costs decreased by 32.3% YoY, respectively.
• Other income grew by 67.8% YoY.
• Net profit for the year declined by 6.9% YoY.
• Net profit margins during the year declined from 6.7% in FY23 to 6.5% in FY24.

FAIRCHEM ORGANICS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	6,480	6,215	-4.1%
Other income	Rs m	7	11	67.8%
Total Revenues	Rs m	6,487	6,226	-4.0%
Gross profit	Rs m	723	670	-7.4%
Depreciation	Rs m	82	93	13.8%
Interest	Rs m	63	42	-32.3%
Profit before tax	Rs m	586	546	-6.8%
Tax	Rs m	151	141	-6.6%
Profit after tax	Rs m	435	405	-6.9%
Gross profit margin	%	11.2	10.8
Effective tax rate	%	25.8	25.8
Net profit margin	%	6.7	6.5

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FAIRCHEM ORGANICS Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 261 million as compared to Rs 668 million in FY23, thereby witnessing an decrease of -61.0%.
• Current assets fell 11% and stood at Rs 1 billion, while fixed assets rose 4% and stood at Rs 2 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 3 billion as against Rs 3 billion during FY23, thereby witnessing a fall of 2%.

FAIRCHEM ORGANICS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	2,593	2,899	11.8
Current Liabilities	Rs m	668	261	-61.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,424	3,343	-2.4
Current assets	Rs m	1,486	1,329	-10.6
Fixed Assets	Rs m	1,938	2,015	3.9
Total Assets	Rs m	3,424	3,343	-2.4

FAIRCHEM ORGANICS Cash Flow Statement Analysis

• FAIRCHEM ORGANICS's cash flow from operating activities (CFO) during FY24 stood at Rs 745 million, an improvement of 50.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -176 million, an improvement of 21.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -569 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 0 million from the Rs 0 million net cash flows seen during FY23.

FAIRCHEM ORGANICS 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	496	745	50.1%
Cash Flow from Investing Activities	Rs m	-145	-176	-
Cash Flow from Financing Activities	Rs m	-351	-569	-
Net Cash Flow	Rs m	0	0	-200.0%

Current Valuations for FAIRCHEM ORGANICS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.1, an decline from the EPS of Rs 33.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,367.1, stands at 44.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.1 times, while the price to sales ratio stands at 2.9 times.
• The company's price to cash flow (P/CF) ratio stood at 31.9 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	497.7	477.3
TTM Earnings per share	Rs	33.4	31.1
Diluted earnings per share	Rs	33.4	31.1
Price to Cash Flow	x	23.0	31.9
TTM P/E ratio	x	27.4	44.0
Price / Book Value ratio	x	8.4	5.5
Market Cap	Rs m	21,835	15,868
Dividends per share (Unadj.)	Rs	7.5	7.5

Ratio Analysis for FAIRCHEM ORGANICS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.1x during FY24, from 2.2x 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 improved and stood at 13.9x during FY24, from 10.4x 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 14.0% during FY24, from 16.8% 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 20.3% during FY24, from 25.0% 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 13.4% during FY24, from 14.5% 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	2.2	5.1
Debtors’ Days	Days	352	334
Interest coverage	x	10.4	13.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.5	13.4
Return on equity	%	16.8	14.0
Return on capital employed	%	25.0	20.3

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

FAIRCHEM ORGANICS Share Price Performance

Over the last one year, FAIRCHEM ORGANICS share price has moved up from Rs 1,245.3 to Rs 1,367.1, registering a gain of Rs 121.9 or around 9.8%.

Overall, the S&P BSE SENSEX is up 22.0% over the year.

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