STERLING TOOLS 2023-24 Annual Report Analysis

Tue, 27 Aug

STERLING TOOLS 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.

STERLING TOOLS Income Statement Analysis

• Operating income during the year rose 20.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.6% in FY24 as against 13.1% in FY23.
• Depreciation charges increased by 4.2% and finance costs increased by 7.1% YoY, respectively.
• Other income grew by 125.5% YoY.
• Net profit for the year grew by 15.6% YoY.
• Net profit margins during the year declined from 6.2% in FY23 to 5.9% in FY24.

STERLING TOOLS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	7,720	9,320	20.7%
Other income	Rs m	29	65	125.5%
Total Revenues	Rs m	7,749	9,385	21.1%
Gross profit	Rs m	1,010	1,082	7.1%
Depreciation	Rs m	317	331	4.2%
Interest	Rs m	88	95	7.1%
Profit before tax	Rs m	633	722	14.0%
Tax	Rs m	154	168	9.0%
Profit after tax	Rs m	479	554	15.6%
Gross profit margin	%	13.1	11.6
Effective tax rate	%	24.4	23.3
Net profit margin	%	6.2	5.9

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STERLING TOOLS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 2 billion as compared to Rs 2 billion in FY23, thereby witnessing an increase of 6.1%.
• Long-term debt down at Rs 316 million as compared to Rs 366 million during FY23, a fall of 13.8%.
• Current assets rose 18% and stood at Rs 4 billion, while fixed assets fell 2% and stood at Rs 3 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 7 billion as against Rs 7 billion during FY23, thereby witnessing a growth of 8%.

STERLING TOOLS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	4,004	4,451	11.2
Current Liabilities	Rs m	1,863	1,977	6.1
Long-term Debt	Rs m	366	316	-13.8
Total Liabilities	Rs m	6,556	7,101	8.3
Current assets	Rs m	3,432	4,041	17.7
Fixed Assets	Rs m	3,124	3,059	-2.1
Total Assets	Rs m	6,556	7,101	8.3

STERLING TOOLS Cash Flow Statement Analysis

• STERLING TOOLS's cash flow from operating activities (CFO) during FY24 stood at Rs 1 billion, an improvement of 61.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -487 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -329 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 200 million from the Rs 38 million net cash flows seen during FY23.

STERLING TOOLS 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	629	1,016	61.7%
Cash Flow from Investing Activities	Rs m	-534	-487	-
Cash Flow from Financing Activities	Rs m	-57	-329	-
Net Cash Flow	Rs m	38	200	429.5%

Current Valuations for STERLING TOOLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 15.4, an improvement from the EPS of Rs 13.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 551.6, stands at 32.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 15.5 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	214.3	258.7
TTM Earnings per share	Rs	13.3	15.4
Diluted earnings per share	Rs	13.3	15.4
Price to Cash Flow	x	18.2	15.5
TTM P/E ratio	x	30.2	32.7
Price / Book Value ratio	x	2.4	3.1
Market Cap	Rs m	9,582	13,721
Dividends per share (Unadj.)	Rs	2.0	3.3

Ratio Analysis for STERLING TOOLS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY24, from 1.8x 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 8.6x during FY24, from 8.2x 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 12.4% during FY24, from 12.0% 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 17.1% during FY24, from 16.5% 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 improved and stood at 9.1% during FY24, from 8.7% 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	1.8	2.0
Debtors’ Days	Days	385	351
Interest coverage	x	8.2	8.6
Debt to equity ratio	x	0.1	0.1
Return on assets	%	8.7	9.1
Return on equity	%	12.0	12.4
Return on capital employed	%	16.5	17.1

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

STERLING TOOLS Share Price Performance

Over the last one year, STERLING TOOLS share price has moved up from Rs 346.3 to Rs 551.6, registering a gain of Rs 205.3 or around 59.3%.

Overall, the S&P BSE SENSEX is up 24.9% over the year.

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