RACL GEARTECH 2023-24 Annual Report Analysis

Wed, 21 Aug

RACL GEARTECH 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.

RACL GEARTECH Income Statement Analysis

• Operating income during the year rose 14.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.4% in FY24 as against 22.8% in FY23.
• Depreciation charges increased by 31.3% and finance costs increased by 14.4% YoY, respectively.
• Other income declined by 37.1% YoY.
• Net profit for the year grew by 5.3% YoY.
• Net profit margins during the year declined from 10.4% in FY23 to 9.6% in FY24.

RACL GEARTECH Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	3,582	4,095	14.3%
Other income	Rs m	91	57	-37.1%
Total Revenues	Rs m	3,673	4,153	13.0%
Gross profit	Rs m	816	959	17.4%
Depreciation	Rs m	187	246	31.3%
Interest	Rs m	207	236	14.4%
Profit before tax	Rs m	514	534	3.9%
Tax	Rs m	140	140	0.4%
Profit after tax	Rs m	374	394	5.3%
Gross profit margin	%	22.8	23.4
Effective tax rate	%	27.2	26.3
Net profit margin	%	10.4	9.6

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RACL GEARTECH Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 3 billion as compared to Rs 2 billion in FY23, thereby witnessing an increase of 42.5%.
• Long-term debt stood at Rs 1 billion as compared to Rs 855 million during FY23, a growth of 23.1%.
• Current assets rose 36% and stood at Rs 3 billion, while fixed assets rose 28% and stood at Rs 3 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 6 billion as against Rs 5 billion during FY23, thereby witnessing a growth of 32%.

RACL GEARTECH Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,675	2,048	22.3
Current Liabilities	Rs m	1,812	2,583	42.5
Long-term Debt	Rs m	855	1,052	23.1
Total Liabilities	Rs m	4,517	5,949	31.7
Current assets	Rs m	2,055	2,803	36.4
Fixed Assets	Rs m	2,462	3,146	27.8
Total Assets	Rs m	4,517	5,949	31.7

RACL GEARTECH Cash Flow Statement Analysis

• RACL GEARTECH's cash flow from operating activities (CFO) during FY24 stood at Rs 352 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -926 million, an improvement of 22.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 552 million, an improvement of 211% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -22 million from the Rs 20 million net cash flows seen during FY23.

RACL GEARTECH 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	600	352	-41.4%
Cash Flow from Investing Activities	Rs m	-758	-926	-
Cash Flow from Financing Activities	Rs m	177	552	211.5%
Net Cash Flow	Rs m	20	-22	-

Current Valuations for RACL GEARTECH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 36.6, an improvement from the EPS of Rs 34.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,060.0, stands at 32.8 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 2.8 times.
• The company's price to cash flow (P/CF) ratio stood at 20.1 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	332.3	379.9
TTM Earnings per share	Rs	34.7	36.6
Diluted earnings per share	Rs	34.7	36.5
Price to Cash Flow	x	17.5	20.1
TTM P/E ratio	x	26.2	32.8
Price / Book Value ratio	x	4.5	6.3
Market Cap	Rs m	7,539	12,841
Dividends per share (Unadj.)	Rs	1.5	1.5

Ratio Analysis for RACL GEARTECH

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x 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 deteriorated and stood at 3.3x during FY24, from 3.5x 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 19.2% during FY24, from 22.3% 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 24.9% during FY24, from 28.5% 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 10.6% during FY24, from 12.9% 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	1.1
Debtors’ Days	Days	861	956
Interest coverage	x	3.5	3.3
Debt to equity ratio	x	0.5	0.5
Return on assets	%	12.9	10.6
Return on equity	%	22.3	19.2
Return on capital employed	%	28.5	24.9

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

RACL GEARTECH Share Price Performance

Over the last one year, RACL GEARTECH share price has moved down from Rs 1,355.7 to Rs 1,060.0, registering a loss of Rs 295.7 or around 21.8%.

Overall, the S&P BSE SENSEX is up 23.8% over the year.

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