KSB 2022-23 Annual Report Analysis

Mon, 10 Jun

KSB has announced its results for the year ended December 2023. Let us have a look at the detailed performance review of the company during FY22-23.

KSB Income Statement Analysis

• Operating income during the year rose 23.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.5% in CY23 as against 14.0% in CY22.
• Depreciation charges increased by 9.8% and finance costs decreased by 13.6% YoY, respectively.
• Other income declined by 23.3% YoY.
• Net profit for the year grew by 14.2% YoY.
• Net profit margins during the year declined from 10.0% in CY22 to 9.3% in CY23.

KSB Income Statement 2022-23

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Net Sales	Rs m	18,220	22,472	23.3%
Other income	Rs m	422	323	-23.3%
Total Revenues	Rs m	18,641	22,796	22.3%
Gross profit	Rs m	2,545	3,030	19.1%
Depreciation	Rs m	453	497	9.8%
Interest	Rs m	61	53	-13.6%
Profit before tax	Rs m	2,453	2,803	14.3%
Tax	Rs m	625	716	14.5%
Profit after tax	Rs m	1,827	2,087	14.2%
Gross profit margin	%	14.0	13.5
Effective tax rate	%	25.5	25.5
Net profit margin	%	10.0	9.3

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KSB Balance Sheet Analysis

• The company's current liabilities during CY23 stood at Rs 7 billion as compared to Rs 6 billion in CY22, thereby witnessing an increase of 12.8%.
• Current assets rose 15% and stood at Rs 15 billion, while fixed assets rose 9% and stood at Rs 6 billion in CY23.
• Overall, the total assets and liabilities for CY23 stood at Rs 21 billion as against Rs 18 billion during CY22, thereby witnessing a growth of 13%.

KSB Balance Sheet as on December 2023

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Networth	Rs m	11,431	13,019	13.9
Current Liabilities	Rs m	6,351	7,165	12.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	18,248	20,657	13.2
Current assets	Rs m	12,738	14,661	15.1
Fixed Assets	Rs m	5,510	5,996	8.8
Total Assets	Rs m	18,248	20,657	13.2

KSB Cash Flow Statement Analysis

• KSB's cash flow from operating activities (CFO) during CY23 stood at Rs 1 billion, an improvement of 270.0% on a YoY basis.
• Cash flow from investing activities (CFI) during CY23 stood at Rs 45 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY23 stood at Rs -585 million on a YoY basis.
• Overall, net cash flows for the company during CY23 stood at Rs 876 million from the Rs -246 million net cash flows seen during CY22.

KSB Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-22	Dec-23
Cash Flow from Operating Activities	Rs m	382	1,415	270.0%
Cash Flow from Investing Activities	Rs m	-127	45	-
Cash Flow from Financing Activities	Rs m	-506	-585	-
Net Cash Flow	Rs m	-246	876	-

Current Valuations for KSB

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 60.0, an improvement from the EPS of Rs 52.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,464.2, stands at 60.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.3 times, while the price to sales ratio stands at 5.4 times.
• The company's price to cash flow (P/CF) ratio stood at 35.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Sales per share (Unadj.)	Rs	523.4	645.6
TTM Earnings per share	Rs	52.5	60.0
Diluted earnings per share	Rs	52.5	60.0
Price to Cash Flow	x	29.6	35.4
TTM P/E ratio	x	38.5	60.5
Price / Book Value ratio	x	4.8	7.0
Market Cap	Rs m	54,486	91,461
Dividends per share (Unadj.)	Rs	15.0	17.5

Ratio Analysis for KSB

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during CY23, from 2.0x during CY22. 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 54.0x during CY23, from 41.0x during CY22. 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 improved and stood at 16.0% during CY23, from 16.0% during CY23. 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 21.9% during CY23, from 22.0% during CY22. 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 10.4% during CY23, from 10.3% during CY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Current ratio	x	2.0	2.0
Debtors’ Days	Days	81	80
Interest coverage	x	41.0	54.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.3	10.4
Return on equity	%	16.0	16.0
Return on capital employed	%	22.0	21.9

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

KSB Share Price Performance

Over the last one year, KSB share price has moved up from Rs 1,314.6 to Rs 2,091.6, registering a gain of Rs 777.0 or around 59.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 34,369.7 (up 1.2%). Over the last one year it has moved up from 27,506.0 to 34,369.7, a gain of 6,864 points (up 25.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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