HFCL 2023-24 Annual Report Analysis

Wed, 11 Sep

HFCL 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.

HFCL Income Statement Analysis

• Operating income during the year fell 5.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 5.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.0% in FY24 as against 13.0% in FY23.
• Depreciation charges decreased by 1.5% and finance costs decreased by 3.2% YoY, respectively.
• Other income grew by 113.2% YoY.
• Net profit for the year grew by 6.2% YoY.
• Net profit margins during the year grew from 6.7% in FY23 to 7.6% in FY24.

HFCL Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	47,433	44,651	-5.9%
Other income	Rs m	472	1,006	113.2%
Total Revenues	Rs m	47,905	45,656	-4.7%
Gross profit	Rs m	6,186	5,825	-5.8%
Depreciation	Rs m	830	818	-1.5%
Interest	Rs m	1,522	1,473	-3.2%
Profit before tax	Rs m	4,306	4,540	5.4%
Tax	Rs m	1,129	1,165	3.2%
Profit after tax	Rs m	3,177	3,375	6.2%
Gross profit margin	%	13.0	13.0
Effective tax rate	%	26.2	25.7
Net profit margin	%	6.7	7.6

Don't Miss: Key Information for Long-term Investors

HFCL Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 22 billion as compared to Rs 21 billion in FY23, thereby witnessing an increase of 2.0%.
• Long-term debt stood at Rs 2 billion as compared to Rs 1 billion during FY23, a growth of 53.3%.
• Current assets rose 11% and stood at Rs 45 billion, while fixed assets rose 40% and stood at Rs 20 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 65 billion as against Rs 55 billion during FY23, thereby witnessing a growth of 19%.

HFCL Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	30,777	39,507	28.4
Current Liabilities	Rs m	21,422	21,840	2.0
Long-term Debt	Rs m	1,104	1,692	53.3
Total Liabilities	Rs m	54,726	64,868	18.5
Current assets	Rs m	40,822	45,335	11.1
Fixed Assets	Rs m	13,904	19,533	40.5
Total Assets	Rs m	54,726	64,868	18.5

HFCL Cash Flow Statement Analysis

• HFCL's cash flow from operating activities (CFO) during FY24 stood at Rs -449 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -4 billion, an improvement of 917.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 5 billion, an improvement of 414% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -396 million from the Rs 462 million net cash flows seen during FY23.

HFCL 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	2,351	-449	-
Cash Flow from Investing Activities	Rs m	-441	-4,487	-
Cash Flow from Financing Activities	Rs m	-1,448	4,540	-
Net Cash Flow	Rs m	462	-396	-

Current Valuations for HFCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.3, an improvement from the EPS of Rs 2.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 153.4, stands at 59.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 30.6 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	34.5	31.0
TTM Earnings per share	Rs	2.3	2.3
Diluted earnings per share	Rs	2.2	2.3
Price to Cash Flow	x	22.0	30.6
TTM P/E ratio	x	27.7	59.5
Price / Book Value ratio	x	3.1	3.2
Market Cap	Rs m	96,587	128,273
Dividends per share (Unadj.)	Rs	0.2	0.2

Ratio Analysis for HFCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY24, from 1.9x 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 4.1x during FY24, from 3.8x 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 8.5% during FY24, from 10.3% 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 14.6% during FY24, from 18.3% 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 7.5% during FY24, from 8.6% 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	1.9	2.1
Debtors’ Days	Days	15	18
Interest coverage	x	3.8	4.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.6	7.5
Return on equity	%	10.3	8.5
Return on capital employed	%	18.3	14.6

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

HFCL Share Price Performance

Over the last one year, HFCL share price has moved up from Rs 77.2 to Rs 153.4, registering a gain of Rs 76.2 or around 98.8%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 19,803.6 (up 0.1%). Over the last one year it has moved up from 14,664.4 to 19,803.6, a gain of 5,139 points (up 35.0%).

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

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