SRF 2023-24 Annual Report Analysis

Thu, 6 Jun

SRF 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.

SRF Income Statement Analysis

• Operating income during the year fell 27.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 32.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.2% in FY24 as against 23.7% in FY23.
• Depreciation charges decreased by 3.4% and finance costs increased by 15.0% YoY, respectively.
• Other income grew by 59.4% YoY.
• Net profit for the year declined by 36.5% YoY.
• Net profit margins during the year declined from 14.5% in FY23 to 12.7% in FY24.

SRF Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	148,703	107,867	-27.5%
Other income	Rs m	749	1,194	59.4%
Total Revenues	Rs m	149,452	109,061	-27.0%
Gross profit	Rs m	35,292	23,899	-32.3%
Depreciation	Rs m	5,753	5,559	-3.4%
Interest	Rs m	2,048	2,356	15.0%
Profit before tax	Rs m	28,240	17,179	-39.2%
Tax	Rs m	6,617	3,439	-48.0%
Profit after tax	Rs m	21,623	13,740	-36.5%
Gross profit margin	%	23.7	22.2
Effective tax rate	%	23.4	20.0
Net profit margin	%	14.5	12.7

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SRF Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 40 billion as compared to Rs 49 billion in FY23, thereby witnessing an decrease of -17.8%.
• Long-term debt down at Rs 17 billion as compared to Rs 23 billion during FY23, a fall of 28.1%.
• Current assets fell 14% and stood at Rs 50 billion, while fixed assets fell 5% and stood at Rs 124 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 174 billion as against Rs 187 billion during FY23, thereby witnessing a fall of 7%.

SRF Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	103,154	104,935	1.7
Current Liabilities	Rs m	49,166	40,423	-17.8
Long-term Debt	Rs m	23,115	16,621	-28.1
Total Liabilities	Rs m	187,359	173,646	-7.3
Current assets	Rs m	57,750	49,899	-13.6
Fixed Assets	Rs m	129,609	123,747	-4.5
Total Assets	Rs m	187,359	173,646	-7.3

SRF Cash Flow Statement Analysis

• SRF's cash flow from operating activities (CFO) during FY24 stood at Rs 19 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -21 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 57 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -2 billion from the Rs 2 billion net cash flows seen during FY23.

SRF 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	29,017	19,028	-34.4%
Cash Flow from Investing Activities	Rs m	-29,614	-20,740	-
Cash Flow from Financing Activities	Rs m	2,196	57	-97.4%
Net Cash Flow	Rs m	1,575	-1,655	-

Current Valuations for SRF

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 46.4, an decline from the EPS of Rs 72.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,305.1, stands at 51.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 6.3 times.
• The company's price to cash flow (P/CF) ratio stood at 36.0 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	501.7	363.9
TTM Earnings per share	Rs	72.9	46.4
Diluted earnings per share	Rs	72.9	46.4
Price to Cash Flow	x	26.1	36.0
TTM P/E ratio	x	33.0	51.2
Price / Book Value ratio	x	7.0	6.6
Market Cap	Rs m	721,328	694,620
Dividends per share (Unadj.)	Rs	7.2	7.2

Ratio Analysis for SRF

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.2x during FY24, from 1.2x 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 deteriorated and stood at 8.3x during FY24, from 14.8x 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 13.1% during FY24, from 21.0% 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 declined and down at 16.1% during FY24, from 24.0% 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 9.3% during FY24, from 12.6% 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	1.2	1.2
Debtors’ Days	Days	4	5
Interest coverage	x	14.8	8.3
Debt to equity ratio	x	0.2	0.2
Return on assets	%	12.6	9.3
Return on equity	%	21.0	13.1
Return on capital employed	%	24.0	16.1

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

SRF Share Price Performance

Over the last one year, SRF share price has moved down from Rs 2,534.5 to Rs 2,305.1, registering a loss of Rs 229.4 or around 9.1%.

Overall, the S&P BSE SENSEX is up 19.0% over the year.

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