RITES 2023-24 Annual Report Analysis

Thu, 22 Aug

RITES 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.

RITES Income Statement Analysis

• Operating income during the year fell 8.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 12.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.6% in FY24 as against 33.1% in FY23.
• Depreciation charges decreased by 9.0% and finance costs decreased by 33.0% YoY, respectively.
• Other income declined by 15.4% YoY.
• Net profit for the year declined by 13.3% YoY.
• Net profit margins during the year declined from 25.3% in FY23 to 24.1% in FY24.

RITES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	22,557	20,580	-8.8%
Other income	Rs m	1,018	861	-15.4%
Total Revenues	Rs m	23,574	21,441	-9.0%
Gross profit	Rs m	7,459	6,496	-12.9%
Depreciation	Rs m	667	607	-9.0%
Interest	Rs m	70	47	-33.0%
Profit before tax	Rs m	7,739	6,704	-13.4%
Tax	Rs m	2,030	1,752	-13.7%
Profit after tax	Rs m	5,710	4,952	-13.3%
Gross profit margin	%	33.1	31.6
Effective tax rate	%	26.2	26.1
Net profit margin	%	25.3	24.1

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RITES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 27 billion as compared to Rs 30 billion in FY23, thereby witnessing an decrease of -7.3%.
• Current assets fell 7% and stood at Rs 45 billion, while fixed assets rose 1% and stood at Rs 11 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 56 billion as against Rs 59 billion during FY23, thereby witnessing a fall of 5%.

RITES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	26,038	26,090	0.2
Current Liabilities	Rs m	29,539	27,370	-7.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	59,411	56,348	-5.2
Current assets	Rs m	48,320	45,109	-6.6
Fixed Assets	Rs m	11,091	11,238	1.3
Total Assets	Rs m	59,411	56,348	-5.2

RITES Cash Flow Statement Analysis

• RITES's cash flow from operating activities (CFO) during FY24 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 111 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -4 billion from the Rs 2 billion net cash flows seen during FY23.

RITES 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	5,598	4,316	-22.9%
Cash Flow from Investing Activities	Rs m	-150	111	-
Cash Flow from Financing Activities	Rs m	-4,832	-5,041	-
Net Cash Flow	Rs m	2,395	-3,873	-

Current Valuations for RITES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.6, an decline from the EPS of Rs 23.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 658.7, stands at 34.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.1 times, while the price to sales ratio stands at 7.7 times.
• The company's price to cash flow (P/CF) ratio stood at 25.0 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	93.9	85.6
TTM Earnings per share	Rs	23.8	20.6
Diluted earnings per share	Rs	23.8	20.6
Price to Cash Flow	x	13.4	25.0
TTM P/E ratio	x	15.0	34.5
Price / Book Value ratio	x	3.0	5.3
Market Cap	Rs m	79,210	138,913
Dividends per share (Unadj.)	Rs	20.5	18.0

Ratio Analysis for RITES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY24, from 1.6x 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 143.3x during FY24, from 111.1x 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 19.0% during FY24, from 21.9% 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 25.9% during FY24, from 30.0% 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 8.9% during FY24, from 9.7% 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	1.6	1.6
Debtors’ Days	Days	15	16
Interest coverage	x	111.1	143.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.7	8.9
Return on equity	%	21.9	19.0
Return on capital employed	%	30.0	25.9

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

RITES Share Price Performance

Over the last one year, RITES share price has moved up from Rs 473.8 to Rs 658.7, registering a gain of Rs 184.9 or around 39.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 73,370.8 (up 0.3%). Over the last one year it has moved up from 44,186.9 to 73,370.8, a gain of 29,184 points (up 66.0%).

Overall, the S&P BSE SENSEX is up 24.3% over the year.

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