NIRLON 2023-24 Annual Report Analysis

Tue, 3 Sep

NIRLON 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.

NIRLON Income Statement Analysis

• Operating income during the year rose 5.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 4.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 79.1% in FY24 as against 80.0% in FY23.
• Depreciation charges decreased by 45.1% and finance costs decreased by 1.7% YoY, respectively.
• Other income grew by 43.1% YoY.
• Net profit for the year grew by 30.2% YoY.
• Net profit margins during the year grew from 27.6% in FY23 to 34.1% in FY24.

NIRLON Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	5,726	6,031	5.3%
Other income	Rs m	30	42	43.1%
Total Revenues	Rs m	5,756	6,074	5.5%
Gross profit	Rs m	4,580	4,772	4.2%
Depreciation	Rs m	1,028	564	-45.1%
Interest	Rs m	1,257	1,235	-1.7%
Profit before tax	Rs m	2,325	3,015	29.7%
Tax	Rs m	746	960	28.6%
Profit after tax	Rs m	1,579	2,056	30.2%
Gross profit margin	%	80.0	79.1
Effective tax rate	%	32.1	31.8
Net profit margin	%	27.6	34.1

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NIRLON Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 2 billion as compared to Rs 2 billion in FY23, thereby witnessing an decrease of -3.7%.
• Long-term debt stood at Rs 11 billion as compared to Rs 11 billion during FY23, a growth of 0.0%.
• Current assets rose 97% and stood at Rs 782 million, while fixed assets fell 1% and stood at Rs 20 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 21 billion as against Rs 21 billion during FY23, thereby witnessing a growth of 1%.

NIRLON Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	4,018	3,731	-7.2
Current Liabilities	Rs m	2,020	1,946	-3.7
Long-term Debt	Rs m	11,450	11,456	0.0
Total Liabilities	Rs m	21,012	21,262	1.2
Current assets	Rs m	398	782	96.7
Fixed Assets	Rs m	20,615	20,480	-0.7
Total Assets	Rs m	21,012	21,262	1.2

NIRLON Cash Flow Statement Analysis

• NIRLON's cash flow from operating activities (CFO) during FY24 stood at Rs 4 billion, an improvement of 12.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -507 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -3 billion, an improvement of 8% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 367 million from the Rs -790 million net cash flows seen during FY23.

NIRLON 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	3,766	4,248	12.8%
Cash Flow from Investing Activities	Rs m	-905	-507	-
Cash Flow from Financing Activities	Rs m	-3,652	-3,374	-
Net Cash Flow	Rs m	-790	367	-

Current Valuations for NIRLON

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.8, an improvement from the EPS of Rs 17.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 442.0, stands at 19.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.7 times, while the price to sales ratio stands at 6.6 times.
• The company's price to cash flow (P/CF) ratio stood at 14.4 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	63.5	66.9
TTM Earnings per share	Rs	17.5	22.8
Diluted earnings per share	Rs	17.5	22.8
Price to Cash Flow	x	13.0	14.4
TTM P/E ratio	x	21.4	19.4
Price / Book Value ratio	x	8.1	10.1
Market Cap	Rs m	32,402	37,764
Dividends per share (Unadj.)	Rs	26.0	26.0

Ratio Analysis for NIRLON

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.4x during FY24, from 0.2x 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 3.4x during FY24, from 2.9x 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 improved and stood at 55.1% during FY24, from 39.3% 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 improved and stood at 28.0% during FY24, from 23.2% 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 15.5% during FY24, from 13.5% 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	0.2	0.4
Debtors’ Days	Days	18	19
Interest coverage	x	2.9	3.4
Debt to equity ratio	x	2.8	3.1
Return on assets	%	13.5	15.5
Return on equity	%	39.3	55.1
Return on capital employed	%	23.2	28.0

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

NIRLON Share Price Performance

Over the last one year, NIRLON share price has moved down from Rs 450.8 to Rs 442.0, registering a loss of Rs 8.8 or around 1.9%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 73,330.7 (up 1.0%). Over the last one year it has moved up from 45,406.6 to 73,330.7, a gain of 27,924 points (up 61.5%).

Overall, the S&P BSE SENSEX is up 26.8% over the year.

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