STEEL EXCHANGE 2023-24 Annual Report Analysis

Thu, 3 Oct

STEEL EXCHANGE 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.

STEEL EXCHANGE Income Statement Analysis

• Operating income during the year fell 21.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 2.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.5% in FY24 as against 6.9% in FY23.
• Depreciation charges decreased by 12.6% and finance costs decreased by 26.3% YoY, respectively.
• Other income grew by 17.3% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 4.3% in FY23 to 1.0% in FY24.

STEEL EXCHANGE Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	13,754	10,857	-21.1%
Other income	Rs m	72	85	17.3%
Total Revenues	Rs m	13,826	10,942	-20.9%
Gross profit	Rs m	945	920	-2.6%
Depreciation	Rs m	244	213	-12.6%
Interest	Rs m	1,056	779	-26.3%
Profit before tax	Rs m	-283	13	NA
Tax	Rs m	305	-96	NA
Profit after tax	Rs m	-589	109	NA
Gross profit margin	%	6.9	8.5
Effective tax rate	%	-107.8	-756.5
Net profit margin	%	-4.3	1.0

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STEEL EXCHANGE Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 3 billion as compared to Rs 4 billion in FY23, thereby witnessing an decrease of -31.4%.
• Long-term debt stood at Rs 3 billion as compared to Rs 2 billion during FY23, a growth of 48.9%.
• Current assets rose 19% and stood at Rs 5 billion, while fixed assets rose 6% and stood at Rs 7 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 12 billion as against Rs 11 billion during FY23, thereby witnessing a growth of 12%.

STEEL EXCHANGE Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	5,066	6,388	26.1
Current Liabilities	Rs m	3,837	2,631	-31.4
Long-term Debt	Rs m	2,288	3,405	48.9
Total Liabilities	Rs m	10,919	12,185	11.6
Current assets	Rs m	4,591	5,472	19.2
Fixed Assets	Rs m	6,210	6,574	5.9
Total Assets	Rs m	10,919	12,185	11.6

STEEL EXCHANGE Cash Flow Statement Analysis

• STEEL EXCHANGE's cash flow from operating activities (CFO) during FY24 stood at Rs -480 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -493 million, an improvement of 261.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 979 million, an improvement of 182% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 7 million from the Rs 40 million net cash flows seen during FY23.

STEEL EXCHANGE 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	1,377	-480	-
Cash Flow from Investing Activities	Rs m	-136	-493	-
Cash Flow from Financing Activities	Rs m	-1,200	979	-
Net Cash Flow	Rs m	40	7	-82.9%

Current Valuations for STEEL EXCHANGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.1, an improvement from the EPS of Rs -0.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.7, stands at 80.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 48.9 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	13.2	9.1
TTM Earnings per share	Rs	-0.6	0.1
Diluted earnings per share	Rs	-0.5	0.1
Price to Cash Flow	x	-47.2	48.9
TTM P/E ratio	x	-27.7	80.4
Price / Book Value ratio	x	3.8	2.5
Market Cap	Rs m	19,072	15,731
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for STEEL EXCHANGE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x 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 improved and stood at 1.0x during FY24, from 0.7x 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 1.7% during FY24, from -11.6% 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 8.1% during FY24, from 10.5% 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 7.3% during FY24, from 4.3% 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	2.1
Debtors’ Days	Days	298	587
Interest coverage	x	0.7	1.0
Debt to equity ratio	x	0.5	0.5
Return on assets	%	4.3	7.3
Return on equity	%	-11.6	1.7
Return on capital employed	%	10.5	8.1

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

STEEL EXCHANGE Share Price Performance

Over the last one year, STEEL EXCHANGE share price has moved up from Rs 9.5 to Rs 12.7, registering a gain of Rs 3.2 or around 33.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 34,768.6 (up 0.4%). Over the last one year it has moved up from 23,025.5 to 34,768.6, a gain of 11,743 points (up 51.0%).

Overall, the S&P BSE SENSEX is up 27.4% over the year.

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