SEPC 2023-24 Annual Report Analysis

Tue, 10 Sep

SEPC 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.

SEPC Income Statement Analysis

• Operating income during the year rose 48.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 56.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.1% in FY24 as against 20.8% in FY23.
• Depreciation charges decreased by 13.5% and finance costs decreased by 23.2% YoY, respectively.
• Other income grew by 127.5% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 1.3% in FY23 to 4.0% in FY24.

SEPC Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	3,788	5,610	48.1%
Other income	Rs m	200	456	127.5%
Total Revenues	Rs m	3,989	6,066	52.1%
Gross profit	Rs m	788	342	-56.7%
Depreciation	Rs m	61	53	-13.5%
Interest	Rs m	674	517	-23.2%
Profit before tax	Rs m	253	227	-10.4%
Tax	Rs m	302	0	-100.0%
Profit after tax	Rs m	-49	227	NA
Gross profit margin	%	20.8	6.1
Effective tax rate	%	119.4	0.0
Net profit margin	%	-1.3	4.0

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SEPC Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 5 billion as compared to Rs 6 billion in FY23, thereby witnessing an decrease of -19.3%.
• Long-term debt stood at Rs 3 billion as compared to Rs 3 billion during FY23, a growth of 12.1%.
• Current assets rose 4% and stood at Rs 13 billion, while fixed assets rose 3% and stood at Rs 4 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 17 billion as against Rs 17 billion during FY23, thereby witnessing a growth of 4%.

SEPC Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	10,865	12,074	11.1
Current Liabilities	Rs m	5,792	4,675	-19.3
Long-term Debt	Rs m	2,662	2,984	12.1
Total Liabilities	Rs m	16,540	17,185	3.9
Current assets	Rs m	12,735	13,278	4.3
Fixed Assets	Rs m	3,805	3,908	2.7
Total Assets	Rs m	16,540	17,185	3.9

SEPC Cash Flow Statement Analysis

• SEPC's cash flow from operating activities (CFO) during FY24 stood at Rs -1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -233 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 1 billion, an improvement of 2,172% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -147 million from the Rs 272 million net cash flows seen during FY23.

SEPC 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	209	-1,187	-
Cash Flow from Investing Activities	Rs m	125	-233	-
Cash Flow from Financing Activities	Rs m	-61	1,273	-
Net Cash Flow	Rs m	272	-147	-

Current Valuations for SEPC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an improvement from the EPS of Rs 0.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 32.3, stands at 194.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 8.1 times.
• The company's price to cash flow (P/CF) ratio stood at 88.6 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	2.9	4.0
TTM Earnings per share	Rs	0.0	0.2
Diluted earnings per share	Rs	0.0	0.1
Price to Cash Flow	x	1,314.1	88.6
TTM P/E ratio	x	-333.1	194.5
Price / Book Value ratio	x	1.3	2.1
Market Cap	Rs m	14,662	24,799
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SEPC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.8x during FY24, from 2.2x 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 1.4x during FY24, from 1.4x 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 1.9% during FY24, from -0.5% 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 4.9% during FY24, from 6.9% 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 4.3% during FY24, from 3.8% 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	2.2	2.8
Debtors’ Days	Days	2,814	1,489
Interest coverage	x	1.4	1.4
Debt to equity ratio	x	0.2	0.2
Return on assets	%	3.8	4.3
Return on equity	%	-0.5	1.9
Return on capital employed	%	6.9	4.9

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

SEPC Share Price Performance

Over the last one year, SEPC share price has moved up from Rs 13.0 to Rs 32.3, registering a gain of Rs 19.3 or around 148.3%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 71,618.2 (up 1.2%). Over the last one year it has moved up from 47,604.0 to 71,618.2, a gain of 24,014 points (up 50.4%).

Overall, the S&P BSE SENSEX is up 24.4% over the year.

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