GHCL 2023-24 Annual Report Analysis

Tue, 18 Jun

GHCL 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.

GHCL Income Statement Analysis

• Operating income during the year fell 24.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 31.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.0% in FY24 as against 34.3% in FY23.
• Depreciation charges increased by 8.4% and finance costs decreased by 31.1% YoY, respectively.
• Other income grew by 55.4% YoY.
• Net profit for the year declined by 28.8% YoY.
• Net profit margins during the year declined from 24.5% in FY23 to 23.0% in FY24.

GHCL Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	45,509	34,465	-24.3%
Other income	Rs m	336	523	55.4%
Total Revenues	Rs m	45,845	34,988	-23.7%
Gross profit	Rs m	15,623	10,679	-31.6%
Depreciation	Rs m	942	1,021	8.4%
Interest	Rs m	387	266	-31.1%
Profit before tax	Rs m	14,630	9,915	-32.2%
Tax	Rs m	3,472	1,976	-43.1%
Profit after tax	Rs m	11,158	7,939	-28.8%
Gross profit margin	%	34.3	31.0
Effective tax rate	%	23.7	19.9
Net profit margin	%	24.5	23.0

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GHCL Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 4 billion as compared to Rs 4 billion in FY23, thereby witnessing an decrease of -0.2%.
• Long-term debt down at Rs 1 billion as compared to Rs 2 billion during FY23, a fall of 52.6%.
• Current assets rose 16% and stood at Rs 18 billion, while fixed assets rose 1% and stood at Rs 20 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 38 billion as against Rs 51 billion during FY23, thereby witnessing a fall of 27%.

GHCL Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	39,413	29,655	-24.8
Current Liabilities	Rs m	4,147	4,139	-0.2
Long-term Debt	Rs m	2,426	1,150	-52.6
Total Liabilities	Rs m	51,334	37,696	-26.6
Current assets	Rs m	15,394	17,794	15.6
Fixed Assets	Rs m	19,761	19,901	0.7
Total Assets	Rs m	51,334	37,696	-26.6

GHCL Cash Flow Statement Analysis

• GHCL's cash flow from operating activities (CFO) during FY24 stood at Rs 8 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -5 billion, an improvement of 30.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -3 billion, an improvement of 36% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -1 billion from the Rs -825 million net cash flows seen during FY23.

GHCL 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	8,562	7,970	-6.9%
Cash Flow from Investing Activities	Rs m	-4,088	-5,340	-
Cash Flow from Financing Activities	Rs m	-5,299	-3,377	-
Net Cash Flow	Rs m	-825	-1,119	-

Current Valuations for GHCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 82.9, an decline from the EPS of Rs 116.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 510.7, stands at 6.2 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 1.4 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-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	476.1	360.1
TTM Earnings per share	Rs	116.7	82.9
Diluted earnings per share	Rs	116.5	82.9
Price to Cash Flow	x	4.0	5.8
TTM P/E ratio	x	4.3	6.2
Price / Book Value ratio	x	1.4	1.8
Market Cap	Rs m	56,104	52,359
Dividends per share (Unadj.)	Rs	17.5	12.0

Ratio Analysis for GHCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.3x during FY24, from 3.7x 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 38.2x during FY24, from 38.8x 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 26.8% during FY24, from 28.3% 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 33.0% during FY24, from 35.9% 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 21.8% during FY24, from 22.5% 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	3.7	4.3
Debtors’ Days	Days	2	2
Interest coverage	x	38.8	38.2
Debt to equity ratio	x	0.1	0.0
Return on assets	%	22.5	21.8
Return on equity	%	28.3	26.8
Return on capital employed	%	35.9	33.0

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

GHCL Share Price Performance

Over the last one year, GHCL share price has moved up from Rs 503.1 to Rs 510.7, registering a gain of Rs 7.6 or around 1.5%.

Overall, the S&P BSE SENSEX is up 22.2% over the year.

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