KENNAMETAL INDIA 2023-24 Annual Report Analysis

Tue, 5 Nov

KENNAMETAL INDIA has announced its results for the year ended June 2024. Let us have a look at the detailed performance review of the company during FY23-24.

KENNAMETAL INDIA Income Statement Analysis

• Operating income during the year rose 2.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.6% in FY as against 14.0% in FY.
• Depreciation charges increased by 12.1% and finance costs increased by 200.0% YoY, respectively.
• Other income grew by 141.8% YoY.
• Net profit for the year grew by 26.0% YoY.
• Net profit margins during the year grew from 8.1% in FY to 10.0% in FY.

KENNAMETAL INDIA Income Statement 2023-24

No. of Mths Year Ending		12 Jun-23*	12 Jun-24*	% Change
Net Sales	Rs m	10,771	10,999	2.1%
Other income	Rs m	55	133	141.8%
Total Revenues	Rs m	10,826	11,132	2.8%
Gross profit	Rs m	1,512	1,822	20.5%
Depreciation	Rs m	389	436	12.1%
Interest	Rs m	2	6	200.0%
Profit before tax	Rs m	1,176	1,513	28.7%
Tax	Rs m	299	408	36.5%
Profit after tax	Rs m	877	1,105	26.0%
Gross profit margin	%	14.0	16.6
Effective tax rate	%	25.4	27.0
Net profit margin	%	8.1	10.0

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KENNAMETAL INDIA Balance Sheet Analysis

• The company's current liabilities during FY stood at Rs 2 billion as compared to Rs 2 billion in FY, thereby witnessing an increase of 24.7%.
• Current assets rose 25% and stood at Rs 6 billion, while fixed assets fell 15% and stood at Rs 6 billion in FY.
• Overall, the total assets and liabilities for FY stood at Rs 12 billion as against Rs 12 billion during FY, thereby witnessing a growth of 1%.

KENNAMETAL INDIA Balance Sheet as on June 2024

No. of Mths Year Ending		12 Jun-23*	12 Jun-24*	% Change
Networth	Rs m	6,874	7,323	6.5
Current Liabilities	Rs m	1,531	1,909	24.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	11,833	12,008	1.5
Current assets	Rs m	4,847	6,080	25.4
Fixed Assets	Rs m	6,986	5,928	-15.1
Total Assets	Rs m	11,833	12,008	1.5

KENNAMETAL INDIA Cash Flow Statement Analysis

• KENNAMETAL INDIA's cash flow from operating activities (CFO) during FY stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY stood at Rs -234 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY stood at Rs -673 million on a YoY basis.
• Overall, net cash flows for the company during FY stood at Rs 236 million from the Rs 258 million net cash flows seen during FY.

KENNAMETAL INDIA Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Jun-23	Jun-24
Cash Flow from Operating Activities	Rs m	1,158	1,143	-1.3%
Cash Flow from Investing Activities	Rs m	-453	-234	-
Cash Flow from Financing Activities	Rs m	-447	-673	-
Net Cash Flow	Rs m	258	236	-8.5%

Current Valuations for KENNAMETAL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 50.3, an improvement from the EPS of Rs 39.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,982.0, stands at 59.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.9 times, while the price to sales ratio stands at 6.0 times.
• The company's price to cash flow (P/CF) ratio stood at 42.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Jun-23*	12 Jun-24*
Sales per share (Unadj.)	Rs	490.0	500.4
TTM Earnings per share	Rs	39.9	50.3
Diluted earnings per share	Rs	39.9	50.3
Price to Cash Flow	x	46.0	42.7
TTM P/E ratio	x	66.3	59.3
Price / Book Value ratio	x	7.5	9.0
Market Cap	Rs m	51,679	65,814
Dividends per share (Unadj.)	Rs	20.0	30.0

Ratio Analysis for KENNAMETAL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY, from 3.2x during FY. 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 253.2x during FY, from 589.0x during FY. 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 15.1% during FY, from 12.8% during FY. 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 20.7% during FY, from 17.1% during FY. 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 9.3% during FY, from 7.4% during FY. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Jun-23*	12 Jun-24*
Current ratio	x	3.2	3.2
Debtors’ Days	Days	48	59
Interest coverage	x	589.0	253.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.4	9.3
Return on equity	%	12.8	15.1
Return on capital employed	%	17.1	20.7

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

KENNAMETAL INDIA Share Price Performance

Over the last one year, KENNAMETAL INDIA share price has moved up from Rs 2,476.0 to Rs 2,982.0, registering a gain of Rs 506.0 or around 20.4%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 68,635.3 (up 0.2%). Over the last one year it has moved up from 46,225.7 to 68,635.3, a gain of 22,410 points (up 48.5%).

Overall, the S&P BSE SENSEX is up 25.0% over the year.

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