HONEYWELL AUTOMATION 2023-24 Annual Report Analysis

Tue, 16 Jul

HONEYWELL AUTOMATION 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.

HONEYWELL AUTOMATION Income Statement Analysis

• Operating income during the year rose 17.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.6% in FY24 as against 15.1% in FY23.
• Depreciation charges increased by 3.5% and finance costs increased by 38.5% YoY, respectively.
• Other income grew by 9.7% YoY.
• Net profit for the year grew by 14.5% YoY.
• Net profit margins during the year declined from 12.7% in FY23 to 12.4% in FY24.

HONEYWELL AUTOMATION Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	34,476	40,582	17.7%
Other income	Rs m	1,305	1,432	9.7%
Total Revenues	Rs m	35,781	42,014	17.4%
Gross profit	Rs m	5,192	5,944	14.5%
Depreciation	Rs m	519	537	3.5%
Interest	Rs m	65	90	38.5%
Profit before tax	Rs m	5,913	6,749	14.1%
Tax	Rs m	1,533	1,735	13.2%
Profit after tax	Rs m	4,380	5,014	14.5%
Gross profit margin	%	15.1	14.6
Effective tax rate	%	25.9	25.7
Net profit margin	%	12.7	12.4

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HONEYWELL AUTOMATION Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 21 billion as compared to Rs 18 billion in FY23, thereby witnessing an increase of 14.1%.
• Current assets rose 15% and stood at Rs 54 billion, while fixed assets fell 10% and stood at Rs 11 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 65 billion as against Rs 59 billion during FY23, thereby witnessing a growth of 10%.

HONEYWELL AUTOMATION Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	31,755	35,896	13.0
Current Liabilities	Rs m	18,338	20,915	14.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	58,805	64,687	10.0
Current assets	Rs m	47,035	54,112	15.0
Fixed Assets	Rs m	11,770	10,575	-10.2
Total Assets	Rs m	58,805	64,687	10.0

HONEYWELL AUTOMATION Cash Flow Statement Analysis

• HONEYWELL AUTOMATION's cash flow from operating activities (CFO) during FY24 stood at Rs 4 billion, an improvement of 7.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 20 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 23 billion from the Rs 2 billion net cash flows seen during FY23.

HONEYWELL AUTOMATION 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	4,099	4,387	7.0%
Cash Flow from Investing Activities	Rs m	-1,293	20,056	-
Cash Flow from Financing Activities	Rs m	-1,021	-1,055	-
Net Cash Flow	Rs m	1,902	23,415	1,131.1%

Current Valuations for HONEYWELL AUTOMATION

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 567.2, an improvement from the EPS of Rs 495.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 56,453.1, stands at 99.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.9 times, while the price to sales ratio stands at 12.3 times.
• The company's price to cash flow (P/CF) ratio stood at 62.7 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	3,900.0	4,590.7
TTM Earnings per share	Rs	495.5	567.2
Diluted earnings per share	Rs	495.4	567.1
Price to Cash Flow	x	65.8	62.7
TTM P/E ratio	x	73.5	99.5
Price / Book Value ratio	x	10.4	9.7
Market Cap	Rs m	329,278	347,997
Dividends per share (Unadj.)	Rs	95.0	100.0

Ratio Analysis for HONEYWELL AUTOMATION

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY24, from 2.6x 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 76.0x during FY24, from 92.0x 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 14.0% during FY24, from 13.8% 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 19.1% during FY24, from 18.8% 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 7.9% during FY24, from 7.6% 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	2.6	2.6
Debtors’ Days	Days	99	83
Interest coverage	x	92.0	76.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.6	7.9
Return on equity	%	13.8	14.0
Return on capital employed	%	18.8	19.1

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

HONEYWELL AUTOMATION Share Price Performance

Over the last one year, HONEYWELL AUTOMATION share price has moved up from Rs 43,178.8 to Rs 56,453.1, registering a gain of Rs 13,274.3 or around 30.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 74,425.9 (down 0.6%). Over the last one year it has moved up from 41,347.4 to 74,425.9, a gain of 33,078 points (up 80.0%).

Overall, the S&P BSE SENSEX is up 23.4% over the year.

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