HCC 2023-24 Annual Report Analysis

Wed, 28 Aug

HCC 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.

HCC Income Statement Analysis

• Operating income during the year fell 15.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 61.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.3% in FY24 as against 11.7% in FY23.
• Depreciation charges decreased by 17.7% and finance costs decreased by 19.7% YoY, respectively.
• Other income grew by 149.5% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 0.6% in FY23 to 7.6% in FY24.

HCC Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	82,699	70,067	-15.3%
Other income	Rs m	532	1,327	149.5%
Total Revenues	Rs m	83,230	71,394	-14.2%
Gross profit	Rs m	9,676	15,633	61.6%
Depreciation	Rs m	1,276	1,051	-17.7%
Interest	Rs m	10,123	8,133	-19.7%
Profit before tax	Rs m	-1,192	7,776	NA
Tax	Rs m	-666	2,482	NA
Profit after tax	Rs m	-525	5,294	NA
Gross profit margin	%	11.7	22.3
Effective tax rate	%	55.9	31.9
Net profit margin	%	-0.6	7.6

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HCC Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 59 billion as compared to Rs 70 billion in FY23, thereby witnessing an decrease of -15.9%.
• Long-term debt down at Rs 17 billion as compared to Rs 49 billion during FY23, a fall of 65.5%.
• Current assets fell 10% and stood at Rs 68 billion, while fixed assets fell 66% and stood at Rs 16 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 84 billion as against Rs 124 billion during FY23, thereby witnessing a fall of 32%.

HCC Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	-7,144	-1,687	NA
Current Liabilities	Rs m	70,203	59,022	-15.9
Long-term Debt	Rs m	48,511	16,715	-65.5
Total Liabilities	Rs m	123,961	84,360	-31.9
Current assets	Rs m	76,259	68,288	-10.5
Fixed Assets	Rs m	47,680	16,071	-66.3
Total Assets	Rs m	123,961	84,360	-31.9

HCC Cash Flow Statement Analysis

• HCC's cash flow from operating activities (CFO) during FY24 stood at Rs 907 million, an improvement of 466.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 8 billion, an improvement of 93.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -8 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -2 billion from the Rs -1 billion net cash flows seen during FY23.

HCC 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	160	907	466.8%
Cash Flow from Investing Activities	Rs m	4,256	8,249	93.8%
Cash Flow from Financing Activities	Rs m	-6,031	-8,098	-
Net Cash Flow	Rs m	-1,391	-1,832	-

Current Valuations for HCC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.5, an improvement from the EPS of Rs -0.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 48.4, stands at 18.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at -48.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 7.3 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	54.7	46.3
TTM Earnings per share	Rs	-0.3	3.5
Diluted earnings per share	Rs	-0.3	3.2
Price to Cash Flow	x	30.6	7.3
TTM P/E ratio	x	-91.1	18.8
Price / Book Value ratio	x	-3.5	-27.6
Market Cap	Rs m	25,146	46,585
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for HCC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY24, from 1.1x 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 2.0x during FY24, from 0.9x 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 -313.9% during FY24, from 7.4% 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 improved and stood at 105.9% during FY24, from 21.6% 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 improved and stood at 15.9% during FY24, from 7.7% 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	1.1	1.2
Debtors’ Days	Days	12	11
Interest coverage	x	0.9	2.0
Debt to equity ratio	x	-6.8	-9.9
Return on assets	%	7.7	15.9
Return on equity	%	7.4	-313.9
Return on capital employed	%	21.6	105.9

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

HCC Share Price Performance

Over the last one year, HCC share price has moved up from Rs 28.2 to Rs 48.4, registering a gain of Rs 20.2 or around 71.6%.

Meanwhile, the S&P BSE REALTY Index is trading at Rs 8,075.8 (down 0.4%). Over the last one year it has moved up from 4,308.5 to 8,075.8, a gain of 3,767 points (up 87.4%).

Overall, the S&P BSE SENSEX is up 26.1% over the year.

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