UNITED DRILLING TOOLS 2023-24 Annual Report Analysis

Tue, 24 Sep

UNITED DRILLING 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.

UNITED DRILLING TOOLS Income Statement Analysis

• Operating income during the year rose 8.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 11.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.4% in FY24 as against 16.0% in FY23.
• Depreciation charges increased by 25.6% and finance costs increased by 261.5% YoY, respectively.
• Other income declined by 0.2% YoY.
• Net profit for the year declined by 8.7% YoY.
• Net profit margins during the year declined from 8.6% in FY23 to 7.2% in FY24.

UNITED DRILLING TOOLS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,198	1,300	8.5%
Other income	Rs m	6	6	-0.2%
Total Revenues	Rs m	1,204	1,306	8.4%
Gross profit	Rs m	192	214	11.5%
Depreciation	Rs m	41	52	25.6%
Interest	Rs m	8	30	261.5%
Profit before tax	Rs m	148	138	-6.9%
Tax	Rs m	45	44	-2.8%
Profit after tax	Rs m	103	94	-8.7%
Gross profit margin	%	16.0	16.4
Effective tax rate	%	30.6	32.0
Net profit margin	%	8.6	7.2

Dear Reader: If You Invest in Midcap Stocks, this is for You

UNITED DRILLING TOOLS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 966 million as compared to Rs 286 million in FY23, thereby witnessing an increase of 237.9%.
• Long-term debt stood at Rs 12 million as compared to Rs 0 million during FY23, a growth of 3311.1%.
• Current assets rose 39% and stood at Rs 3 billion, while fixed assets rose 0% and stood at Rs 885 million in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 4 billion as against Rs 3 billion during FY23, thereby witnessing a growth of 27%.

UNITED DRILLING TOOLS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	2,471	2,529	2.4
Current Liabilities	Rs m	286	966	237.9
Long-term Debt	Rs m	0	12	3,311.1
Total Liabilities	Rs m	2,816	3,569	26.7
Current assets	Rs m	1,936	2,684	38.7
Fixed Assets	Rs m	881	885	0.5
Total Assets	Rs m	2,816	3,569	26.7

UNITED DRILLING TOOLS Cash Flow Statement Analysis

• UNITED DRILLING TOOLS's cash flow from operating activities (CFO) during FY24 stood at Rs -163 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -77 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 244 million, an improvement of 249% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 3 million from the Rs 0 million net cash flows seen during FY23.

UNITED DRILLING 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	257	-163	-
Cash Flow from Investing Activities	Rs m	-93	-77	-
Cash Flow from Financing Activities	Rs m	-164	244	-
Net Cash Flow	Rs m	0	3	7,025.0%

Current Valuations for UNITED DRILLING TOOLS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.6, an decline from the EPS of Rs 5.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 252.7, stands at 40.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.0 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 33.9 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	59.0	64.0
TTM Earnings per share	Rs	5.1	4.6
Diluted earnings per share	Rs	5.1	4.6
Price to Cash Flow	x	27.2	33.9
TTM P/E ratio	x	38.0	40.1
Price / Book Value ratio	x	3.1	2.0
Market Cap	Rs m	7,778	4,944
Dividends per share (Unadj.)	Rs	1.8	1.8

Ratio Analysis for UNITED DRILLING TOOLS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.8x during FY24, from 6.8x 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 deteriorated and stood at 5.6x during FY24, from 18.9x 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 3.7% during FY24, from 4.2% 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 6.6% during FY24, from 6.3% 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 3.5% during FY24, from 3.9% 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	6.8	2.8
Debtors’ Days	Days	1,038	1,528
Interest coverage	x	18.9	5.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.9	3.5
Return on equity	%	4.2	3.7
Return on capital employed	%	6.3	6.6

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

UNITED DRILLING TOOLS Share Price Performance

Over the last one year, UNITED DRILLING TOOLS share price has moved down from Rs 257.1 to Rs 252.7, registering a loss of Rs 4.4 or around 1.7%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 73,950.2 (up 0.1%). Over the last one year it has moved up from 46,719.8 to 73,950.2, a gain of 27,230 points (up 58.3%).

Overall, the S&P BSE SENSEX is up 27.2% over the year.

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