Overview #
Detailed Analysis #
This analysis examines PIX Transmissions Limited’s Annual Report for the fiscal year ended March 31, 2024, covering financial performance, business segments, risks, and ESG (Environmental, Social, and Governance) initiatives.
I. Financial Performance:
The report highlights strong financial results for FY2024, exceeding consolidated annual revenues of ₹511 crore (approximately $62 million USD based on an average exchange rate of ₹82 per USD for FY2024) and achieving a record Profit Before Tax (PBT) exceeding ₹110 crore (approximately $13.4 million USD). However, the standalone financial statements provide more detailed figures:
- Standalone Revenue: ₹454.79 crore (approximately $55.4 million USD) - a slight increase compared to the previous year’s ₹450.14 crore.
- Standalone PBT: ₹1044.24 crore (approximately $12.7 million USD) - a significant improvement over the previous year’s ₹740.46 crore.
- Standalone Profit After Tax (PAT): ₹792.10 crore (approximately $9.6 million USD) - a substantial increase from ₹553.92 crore in FY2023.
- Dividend Recommendation: ₹7.00 per equity share (FY2023: ₹6.00).
Key Financial Ratios (Standalone): Precise calculations require the full financial statements, but some key ratios can be approximated from the provided data:
- Gross Profit Margin: Cannot be precisely calculated without Cost of Goods Sold (COGS) details, but appears healthy based on the significant increase in PBT.
- Operating Profit Margin: Improved significantly in FY2024 compared to FY2023, indicating improved operational efficiency.
- Net Profit Margin: Substantially improved in FY2024, signifying better profitability.
- Debt-to-Equity Ratio: Decreased from 0.19 in FY2023 to 0.10 in FY2024, demonstrating improved financial health.
- Current Ratio: Improved from 3.58 in FY2023 to 4.98 in FY2024. This indicates a stronger liquidity position.
II. Business Segments:
PIX Transmissions primarily operates in the manufacturing and trading of power transmission belts. The report breaks down the revenue contribution as follows:
- V-Belts Manufacturing: 98% of turnover. This is the core business and the primary driver of revenue.
- Trading of Powerware Products: 2% of turnover. This segment is a smaller contributor to overall revenue.
The Company serves both domestic and international markets, with exports contributing over 50% of total turnover. The report mentions subsidiaries in the UAE, UK, and Germany, expanding the reach into Middle Eastern and European markets.
III. Risks:
The report identifies many key risk factors impacting the business:
- Geopolitical Tensions: Global instability and conflicts (specifically mentioned conflicts in the Red Sea) affect freight rates and container availability, potentially disrupting supply chains.
- High Borrowing Costs: Increased interest rates in key export markets (Western Europe and North America) have led to demand normalization in these regions.
- Cooling of Pent-Up Demand: Post-pandemic demand normalization is impacting sales, necessitating a shift towards the domestic market.
- Commodity Price Risk and Foreign Exchange Risk: The report mentions foreign exchange risk, primarily due to foreign currency borrowings, trade receivables, and payables. They employ hedging strategies (forward contracts) to mitigate this risk.
IV. ESG Initiatives:
The Business Responsibility and Sustainability Report (BRSR) details PIX Transmissions’ ESG initiatives:
- Environmental: The company focuses on energy conservation (electricity, fuel, and water), waste management (plastic, E-waste, hazardous, and other waste), and compliance with environmental regulations (EPR norms). They’ve implemented a sewage treatment plant and an effluent treatment plant to reduce water consumption and environmental impact. However, significant opportunities exist for further improvement in their environmental performance, as highlighted by their ongoing pursuit of LCA and greener technologies.
- Social: The company emphasizes employee well-being, providing health insurance and other benefits. They mention efforts in skill development and have undertaken CSR initiatives focusing on education (blind children, underprivileged children) and healthcare for underprivileged communities. The company has a low turnover rate, indicating a positive employee retention environment. However, there’s limited disclosure regarding aspects such as diversity and inclusion in leadership roles.
- Governance: The report extensively covers corporate governance practices, including Board composition, committee structures (Audit, Nomination & Remuneration, Stakeholder Relationship, CSR & Governance, Risk Management), code of conduct, whistleblower policy, and investor grievance redressal mechanisms. The company emphasizes transparency and compliance with regulations. However, further improvements could be made by disclosing the diversity composition of their employees and implementing a robust, detailed diversity and inclusion policy.
V. Overall Assessment:
PIX Transmissions Limited demonstrates strong financial performance in FY2024, driven by its core V-belt manufacturing business and a successful pivot towards the domestic market. While the company shows positive trends in ESG, there’s considerable room for enhancement in their environmental performance and broader social responsibility. The detailed disclosure on corporate governance is a strong point. Future reports should include more quantitative data on ESG targets and progress. The limited detailed explanation around the significant increase in profit margins compared to the previous year should also be further clarified.
Detailed Analysis #
Balance Sheet #
Asset Analysis #
The values for PIX Transmissions Limited’s assets, as of March 31, 2024, are presented in Indian Rupees (INR) in lacs (1 lac = 100,000). To convert to USD, you’d need to use an appropriate exchange rate for the period. I’ll provide the INR figures and then an approximate USD equivalent using an average exchange rate of ₹82 per USD for the fiscal year. Remember, this is an approximation, and the actual USD value may vary depending on the specific exchange rate used.
Standalone Financial Statements (as reported in the annual report):
- Total Assets: ₹5,993,731,000 (approximately $73 million USD)
- Total Current Assets: ₹3,164,632,000 (approximately $38.6 million USD)
- Cash and Cash Equivalents: ₹334,492,000 (approximately $4.1 million USD)
- Trade Receivables: ₹1,038,100,000 (approximately $12.6 million USD)
- Inventories: ₹841,197,000 (approximately $10.3 million USD)
Consolidated Financial Statements (as reported in the annual report):
- Total Assets: ₹6,368,618,000 (approximately $77.6 million USD)
- Total Current Assets: ₹3,531,753,000 (approximately $43 million USD)
- Cash and Cash Equivalents: ₹485,273,000 (approximately $5.9 million USD)
- Trade Receivables: ₹1,100,352,000 (approximately $13.4 million USD)
- Inventories: ₹979,385,000 (approximately $11.9 million USD)
Important Note: These are approximate USD conversions based on a single average exchange rate. The actual USD values may differ slightly depending on the specific exchange rate used for each transaction during the fiscal year. For precise figures, consult the report’s financial statements and use the reported exchange rates provided therein for conversion to USD.
Liability Analysis #
The liability figures for PIX Transmissions Limited, as of March 31, 2024, are presented in Indian Rupees (INR) in lacs (1 lac = 100,000). Again, for USD equivalents, I’ll provide an approximation using an average exchange rate of ₹82 per USD for the fiscal year. Remember that this is an approximation, and the actual USD value may vary based on the specific exchange rate used.
Standalone Financial Statements:
- Total Liabilities: ₹7,330,380,000 + ₹6,630,310,000 = ₹13,960,690,000 (approximately $170 million USD)
- Total Current Liabilities: ₹6,630,310,000 (approximately $80.9 million USD)
- Long-Term Debt: ₹7,330,380,000 (approximately $89.4 million USD)
- Trade Payables (Accounts Payable): ₹3,019,060,000 (approximately $36.8 million USD)
Consolidated Financial Statements:
- Total Liabilities: ₹7,330,370,000 + ₹7,086,490,000 = ₹14,416,860,000 (approximately $176 million USD)
- Total Current Liabilities: ₹7,086,490,000 (approximately $86.4 million USD)
- Long-Term Debt: ₹7,330,370,000 (approximately $89.4 million USD)
- Trade Payables (Accounts Payable): ₹3,114,540,000 (approximately $38 million USD)
Important Note: These are approximate USD conversions using a single average exchange rate. The actual USD values might slightly differ depending on the specific exchange rates used for each transaction during the fiscal year. Consult the report’s financial statements and utilize the reported exchange rates for precise USD conversions.
Equity Analysis #
Here’s a breakdown of the shareholders’ equity, retained earnings, and share capital values for PIX Transmissions Limited, as of March 31, 2024, in Indian Rupees (INR) in lacs (1 lac = 100,000). USD equivalents are approximate, using an average exchange rate of ₹82 per USD for the fiscal year. Remember this is an approximation; the actual USD value may vary depending on the specific exchange rate used.
Standalone Financial Statements:
- Shareholders’ Equity: ₹4,597,660,000 (approximately $56 million USD)
- Retained Earnings: ₹4,141,956,000 (approximately $50.5 million USD)
- Share Capital: ₹136,241,000 (approximately $1.7 million USD)
Consolidated Financial Statements:
- Shareholders’ Equity: ₹4,926,932,000 (approximately $60 million USD)
- Retained Earnings: ₹4,453,676,000 (approximately $54.3 million USD)
- Share Capital: ₹136,241,000 (approximately $1.7 million USD)
Important Note: These USD values are approximations. The actual USD equivalent might be slightly different depending on the precise exchange rate used for each transaction during the fiscal year. The financial statements in the annual report should be consulted for the accurate INR amounts and any reported exchange rates for more precise USD conversions.
Income Statement #
Operating Performance #
The income statement data for PIX Transmissions Limited for the fiscal year ended March 31, 2024, is presented in Indian Rupees (INR) in lacs (1 lac = 100,000). I will provide approximate USD equivalents using an average exchange rate of ₹82 per USD for the fiscal year. Remember that these are approximations, and the actual USD values may vary depending on the specific exchange rate used.
Standalone Financial Statements:
- Revenue: ₹4,547,886,000 (approximately $55.4 million USD)
- Cost of Revenue: ₹3,691,142,000 (approximately $45 million USD) (This is a calculation combining Cost of Materials Consumed, Purchases of Stock-in-Trade, and Changes in Inventories.)
- Gross Profit: ₹856,744,000 (approximately $10.4 million USD) (Revenue - Cost of Revenue)
- Operating Expenses: Cannot be directly calculated from the provided excerpts. The report shows various expense categories (employee benefits, finance costs, depreciation, other expenses) totaling ₹3,691,142,000. However, some of these, like finance costs, are not strictly operating expenses. To obtain a true operating expense figure, you need the complete standalone statement of profit and loss.
- Operating Income: ₹1,044,235,000 - 476,630,000 = ₹567,605,000 (approximately $6.9 million USD) (This is an approximation. It takes Profit Before Tax (PBT) and subtracts finance costs. To get the true operating income, you need to isolate operating expenses from other non-operating expenses in the full income statement.)
Consolidated Financial Statements:
- Revenue: ₹4,930,647,000 (approximately $60.1 million USD)
- Cost of Revenue: ₹4,010,525,000 (approximately $48.9 million USD) (This is a calculation combining Cost of Materials Consumed, Purchases of Stock-in-Trade, and Changes in Inventories.)
- Gross Profit: ₹920,122,000 (approximately $11.2 million USD) (Revenue - Cost of Revenue)
- Operating Expenses: Cannot be directly calculated from the provided excerpts. Similar to the standalone statements, the full consolidated income statement is needed to determine the precise operating expense figure.
- Operating Income: ₹11,070,510,000 - ₹476,630,000 = ₹10,593,880,000 (approximately $129 million USD) (This is an approximation. It takes Profit Before Tax (PBT) and subtracts finance costs. A precise operating income requires isolating operating expenses in the complete consolidated income statement.)
Important Note: These USD figures are approximations based on a single average exchange rate. For precise figures and a complete picture of operating income and expenses, you must refer to the complete standalone and consolidated statements of profit and loss included in the annual report.
Bottom Line Metrics #
Here’s a summary of the net income, EBITDA, basic EPS, and diluted EPS values for PIX Transmissions Limited for the fiscal year ended March 31, 2024. Values are in Indian Rupees (INR) in lacs (1 lac = 100,000), with approximate USD equivalents using an average exchange rate of ₹82 per USD for FY2024. Remember these USD conversions are approximations; the actual USD values may vary based on the precise exchange rate used for each transaction.
Standalone Financial Statements:
- Net Income: ₹792,103,000 (approximately $9.6 million USD)
- EBITDA: Cannot be precisely calculated from the provided excerpts. The complete standalone statement of profit and loss is needed to determine EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by adding back depreciation and amortization and interest expense to the profit before tax figure.
- Basic EPS: ₹58.14 (approximately $0.71 USD)
- Diluted EPS: ₹58.14 (approximately $0.71 USD)
Consolidated Financial Statements:
- Net Income: ₹8,298,770,000 (approximately $101 million USD)
- EBITDA: Cannot be precisely calculated from the provided excerpts. You need the complete consolidated statement of profit and loss to calculate EBITDA (by adding back depreciation and amortization, and interest expense to the profit before tax).
- Basic EPS: ₹60.91 (approximately $0.74 USD)
- Diluted EPS: ₹60.91 (approximately $0.74 USD)
Important Note: These USD values are approximations based on an average exchange rate. To obtain precise figures, consult the complete standalone and consolidated statements of profit and loss from the annual report, and utilize the exchange rates they provide for accurate USD conversions. Also, remember that EBITDA is a non-GAAP measure and its calculation needs specific line items from the income statement.
Cash Flow #
Cash Flow Components #
The cash flow statement data for PIX Transmissions Limited for the fiscal year ended March 31, 2024, is presented in Indian Rupees (INR) in lacs (1 lac = 100,000). I’ll provide approximate USD equivalents using an average exchange rate of ₹82 per USD for the fiscal year. Remember that these are approximations, and the actual USD values may vary depending on the specific exchange rate used.
Standalone Cash Flow Statement:
- Operating Cash Flow: ₹1,330,355,000 (approximately $16.2 million USD)
- Investing Cash Flow: ₹(853,083,000) (approximately -$10.4 million USD) Note the negative sign indicating net cash outflow.
- Financing Cash Flow: ₹(4,586,350,000) (approximately -$55.9 million USD) Note the negative sign indicating net cash outflow.
Consolidated Cash Flow Statement:
- Operating Cash Flow: ₹1,368,581,000 (approximately $16.7 million USD)
- Investing Cash Flow: ₹(8,785,210,000) (approximately -$107 million USD) Note the negative sign indicating net cash outflow.
- Financing Cash Flow: ₹(4,586,340,000) (approximately -$55.9 million USD) Note the negative sign indicating net cash outflow.
Important Note: These USD values are approximations based on an average exchange rate. For precise figures, consult the complete standalone and consolidated statements of cash flow from the annual report and use the reported exchange rates provided therein for accurate USD conversions. The negative values for investing and financing cash flows highlight significant capital expenditures and financing activities during the year.
Cash Flow Metrics #
Calculating free cash flow (FCF), capital expenditure (CAPEX), and dividends paid requires information from multiple sections of the financial statements. Unfortunately, the provided excerpts don’t give all the necessary data for a completely precise calculation of FCF. We can make approximations, but these will be subject to the limitations of the data provided. All values are in INR in lacs (1 lac = 100,000). USD equivalents are approximate using an average exchange rate of ₹82 per USD for FY2024.
Standalone Financial Statements:
Capital Expenditure (CAPEX): This isn’t directly stated but can be approximated from the investing cash flows. The purchase of Property, Plant, and Equipment (PP&E), including capital advances and work-in-progress, totaled ₹2,022.04 lac + ₹459.49 lac = ₹2,481.53 lac (approximately $30.3 million USD). This represents a significant CAPEX for the year.
Dividends Paid: ₹815.56 lac (approximately $9.9 million USD)
Free Cash Flow (FCF): A precise calculation requires Operating Cash Flow minus CAPEX and changes in working capital. While we have a figure for operating cash flow (₹1,330.35 lac), a complete picture of changes in working capital is missing from the provided excerpts. Therefore, a precise FCF cannot be calculated. A rough estimate would subtract the CAPEX from the operating cash flow, resulting in a positive FCF but an inaccurate one.
Consolidated Financial Statements:
Capital Expenditure (CAPEX): Similar to the standalone figures, we can approximate CAPEX from the investing cash flows. The purchase of PP&E (including capital advances and work-in-progress) was ₹2,191.06 lac + ₹459.49 lac = ₹2,650.55 lac (approximately $32.3 million USD).
Dividends Paid: ₹815.57 lac (approximately $9.9 million USD)
Free Cash Flow (FCF): As with the standalone statements, a precise FCF calculation requires the complete statement of cash flows to account for changes in working capital. Thus, an exact calculation is not possible with the provided information. A rough estimate (operating cash flow - CAPEX) would result in a positive FCF but would be inaccurate.
Important Note: These USD values are approximations based on an average exchange rate. For a precise calculation of FCF, one needs the complete statement of cash flows and a full breakdown of changes in working capital from the annual report. The provided excerpts only offer partial information, so the FCF values above are rough estimates. Use the actual exchange rates reported in the financial statements for more accurate USD conversions.
Profitability Ratios #
Calculating profitability ratios requires many key figures from the income statement and balance sheet. The provided excerpts don’t contain all necessary data for precise calculations. We can offer estimations, but these will be subject to the limitations of the available information. All values will be expressed as percentages.
Standalone Financial Statements (Approximations):
Gross Profit Margin: This requires the Cost of Goods Sold (COGS), which is not explicitly stated but can be approximated from the cost of materials consumed, purchases of stock-in-trade, and changes in inventories (₹3,691.14 lac). Therefore, Gross Profit Margin ≈ (Revenue - Cost of Revenue)/Revenue ≈ (4547.89 - 3691.14)/4547.89 ≈ 18.8%.
Operating Margin: This needs the Operating Income, which we cannot accurately calculate from the provided extracts (see previous analysis). An approximation can be made by subtracting only finance costs from PBT: (1044.24 - 476.63)/4547.89 ≈ 12.4%. However, this is only a rough estimate.
Net Profit Margin: Net Profit Margin ≈ Net Income/Revenue ≈ 792.10/4547.89 ≈ 17.4%.
Return on Equity (ROE): ROE ≈ Net Income/Average Shareholder’s Equity. The annual report provides the shareholder’s equity at the beginning and end of the year. To approximate the average, we’ll add them and divide by 2: Average Shareholder’s Equity ≈ (3889.39 + 4597.66)/2 ≈ 4243.52. Therefore, ROE ≈ 792.10/4243.52 ≈ 18.6%.
Return on Assets (ROA): ROA ≈ Net Income/Average Total Assets. Similarly, we’ll approximate the average total assets: Average Total Assets ≈ (5432.16 + 5993.73)/2 ≈ 5712.95. Therefore, ROA ≈ 792.10/5712.95 ≈ 13.9%.
Consolidated Financial Statements (Approximations):
Gross Profit Margin: Similar to the standalone calculation, we’ll approximate COGS. Consolidated Gross Profit Margin ≈ (Revenue - Cost of Revenue)/Revenue ≈ (4930.65 - 4010.52)/4930.65 ≈ 18.6%.
Operating Margin: An approximation using PBT minus finance costs: (11070.51 - 476.63)/4930.65 ≈ 21.3%. This is only a rough estimate; the true operating margin requires a complete breakdown of operating expenses.
Net Profit Margin: Net Profit Margin ≈ Net Income/Revenue ≈ 8298.77/4930.65 ≈ 16.8%.
Return on Equity (ROE): Average Shareholder’s Equity ≈ (41799.34 + 49269.32)/2 ≈ 45534.33. Therefore, ROE ≈ 8298.77/45534.33 ≈ 18.2%.
Return on Assets (ROA): Average Total Assets ≈ (57851.05 + 63686.18)/2 ≈ 60768.62. Therefore, ROA ≈ 8298.77/60768.62 ≈ 13.7%.
Important Note: These are rough estimates due to the limited data available in the provided excerpts. For precise calculations of these ratios, you must consult the complete standalone and consolidated income statements and balance sheets from the annual report. Using the data within the full statements will produce more accurate results. Also remember that the calculation of operating margin is critically dependent on the correct identification of operating expenses from non-operating ones.
Liquidity Ratios #
Calculating liquidity ratios requires data from the balance sheet. Here are the approximations for PIX Transmissions Limited’s liquidity ratios as of March 31, 2024, using the data provided earlier. Remember that these calculations are based on the partial data from the annual report and will not be precise. All ratios will be expressed as a decimal.
Standalone Financial Statements (Approximations):
Current Ratio: Current Ratio = Current Assets / Current Liabilities ≈ 3164.63/6630.31 ≈ 0.48
Quick Ratio: Quick Ratio = (Current Assets - Inventories) / Current Liabilities ≈ (3164.63 - 841.197)/6630.31 ≈ 0.35
Cash Ratio: Cash Ratio = (Cash and Cash Equivalents) / Current Liabilities ≈ 334.492/6630.31 ≈ 0.05
Consolidated Financial Statements (Approximations):
Current Ratio: Current Ratio = Current Assets / Current Liabilities ≈ 3531.75/7086.49 ≈ 0.50
Quick Ratio: Quick Ratio = (Current Assets - Inventories) / Current Liabilities ≈ (3531.75 - 979.39)/7086.49 ≈ 0.36
Cash Ratio: Cash Ratio = (Cash and Cash Equivalents) / Current Liabilities ≈ 485.273/7086.49 ≈ 0.07
Important Note: These are approximations due to the incomplete data in the excerpts. For precise calculations, consult the full standalone and consolidated balance sheets within the annual report. These will provide the most accurate data for calculating the liquidity ratios. Using data from the complete financial statements will produce more accurate and reliable results.
Efficiency Ratios #
Calculating efficiency ratios requires data from both the income statement and the balance sheet. Because we only have partial data from the annual report, the calculations below are approximations, and the results should be considered estimates. All ratios will be expressed as a decimal.
Standalone Financial Statements (Approximations):
Asset Turnover: Asset Turnover = Revenue / Average Total Assets. Approximating average total assets as (5432.16 + 5993.73)/2 ≈ 5712.95. Therefore, Asset Turnover ≈ 4547.89/5712.95 ≈ 0.796
Inventory Turnover: Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory. We approximated COGS previously as ₹3,691.14 lac. Approximating average inventory as (8503.11 + 8411.97)/2 ≈ 8457.54. Therefore, Inventory Turnover ≈ 3691.14/8457.54 ≈ 0.436
Receivables Turnover: Receivables Turnover = Revenue / Average Accounts Receivable. Approximating average accounts receivable as (10493.65 + 10381.00)/2 ≈ 10437.32. Therefore, Receivables Turnover ≈ 4547.89/10437.32 ≈ 0.436
Consolidated Financial Statements (Approximations):
Asset Turnover: Approximating average total assets as (57851.05 + 63686.18)/2 ≈ 60768.62. Therefore, Asset Turnover ≈ 4930.65/60768.62 ≈ 0.081
Inventory Turnover: Approximating average inventory as (10545.14 + 9793.85)/2 ≈ 10169.50. Therefore, Inventory Turnover ≈ 4010.52/10169.50 ≈ 0.394
Receivables Turnover: Approximating average accounts receivable as (10544.30 + 11003.52)/2 ≈ 10773.91. Therefore, Receivables Turnover ≈ 4930.65/10773.91 ≈ 0.457
Important Note: These are rough estimates. For accurate calculations, consult the complete standalone and consolidated income statements and balance sheets within the annual report. These will provide the necessary figures for more precise and reliable results. The approximations here are subject to the limitations of the data provided and the estimations made for COGS and average asset/inventory values. Using the full financial data will greatly improve the accuracy of these calculations.
Leverage Ratios #
Leverage ratios assess a company’s financial risk by examining the proportion of debt in its capital structure. Here are the approximations for PIX Transmissions Limited’s use ratios as of March 31, 2024, based on the data previously extracted from the annual report. Keep in mind that these calculations are based on limited information and should be viewed as estimates. All ratios are expressed as decimals.
Standalone Financial Statements (Approximations):
Debt-to-Equity Ratio: Debt-to-Equity Ratio = Total Debt / Total Shareholders’ Equity. Approximating total debt as the sum of long-term and short-term debt (7330.38 + 1144.71 = 8475.09) and using the previously calculated average shareholder’s equity of 4243.52, Debt-to-Equity Ratio ≈ 8475.09/4243.52 ≈ 1.998
Debt-to-Assets Ratio: Debt-to-Assets Ratio = Total Debt / Total Assets. Using the approximated average total assets of 5712.95, Debt-to-Assets Ratio ≈ 8475.09/5712.95 ≈ 1.483
Interest Coverage Ratio: Interest Coverage Ratio = Earnings Before Interest and Taxes (EBIT) / Interest Expense. The interest expense is provided (476.63 lac), but EBIT needs to be calculated from the full income statement as it is not directly available. This makes a precise calculation of interest coverage impossible with the limited data.
Consolidated Financial Statements (Approximations):
Debt-to-Equity Ratio: Approximating total debt as (7330.37 + 1144.71 = 8475.08) and using the approximated average shareholder’s equity of 45534.33, Debt-to-Equity Ratio ≈ 8475.08/45534.33 ≈ 0.186
Debt-to-Assets Ratio: Using the approximated average total assets of 60768.62, Debt-to-Assets Ratio ≈ 8475.08/60768.62 ≈ 0.139
Interest Coverage Ratio: Similar to the standalone case, a precise calculation is not possible without the complete income statement to determine EBIT. Therefore, an accurate interest coverage cannot be computed with the given limited data.
Important Note: These are approximations. The precise values require the full standalone and consolidated balance sheets (for debt and equity figures) and the full income statement (for EBIT) from the annual report. Using the complete financial data will generate far more accurate results for these use ratios. The approximation of average values for assets and equity are also subject to error. The provided figures only give a very rough idea of the company’s leverage.
Market Analysis #
Market Metrics #
Calculating these market-related metrics requires information not fully available in the provided excerpts. We can make estimations, but they will be imprecise. All values will be expressed as decimals.
Market Cap (Approximation):
Market capitalization (market cap) is calculated by multiplying the current share price by the number of outstanding shares. The annual report provides the number of outstanding shares (136.25 lac), but the current share price is needed from a financial data source (such as a stock exchange website) as of the date you are doing this calculation. Let’s assume, for illustrative purposes only, a share price of ₹1,000. Then:
- Approximated Market Cap: 136.25 lac shares * ₹1,000/share = ₹13,625,000,000 (approximately $166 million USD based on an average exchange rate).
PE Ratio (Approximation):
The Price-to-Earnings (PE) ratio compares the market price per share to the earnings per share (EPS). We have the basic and diluted EPS (approximately ₹60.91 from the consolidated income statement). To calculate the PE ratio, you need the current market price per share from a financial data provider (not provided in the report). Again, let’s assume a current market price of ₹1,000. Then:
- Approximated PE Ratio: ₹1,000 / ₹60.91 ≈ 16.4
PB Ratio (Approximation):
The Price-to-Book (PB) ratio compares the market price per share to the book value per share. Book value per share can be calculated using the total shareholder’s equity and the number of outstanding shares.
- Approximated Book Value per Share (Consolidated): 4926.93 lac / 136.25 lac shares ≈ ₹361.45
- Approximated PB Ratio (Consolidated): ₹1,000 / ₹361.45 ≈ 2.8
Dividend Yield (Approximation):
Dividend yield is the annual dividend per share divided by the current market price per share. The annual dividend was ₹7.00 per share. Using our assumed market price of ₹1,000:
- Approximated Dividend Yield: ₹7.00 / ₹1,000 ≈ 0.007
Dividend Payout Ratio (Approximation):
Dividend payout ratio is the percentage of net income paid out as dividends.
- Approximated Dividend Payout Ratio (Consolidated): (817.51 lac * 100) / 8298.77 lac ≈ 9.8%
Important Note: These figures are rough estimates only. The actual market cap, PE ratio, PB ratio, dividend yield, and dividend payout ratio will vary based on the current market price per share, which is not included in the annual report, and the actual values reported in the financial statements, which were incomplete in the provided data. To obtain accurate calculations, one must obtain the current market price per share from a financial data provider and use the complete, audited financial statements. The accuracy of these estimations heavily relies on the assumed share price.
Business Analysis #
Segment Analysis #
The provided annual report offers limited detail on segment performance beyond a high-level overview. Precise figures for growth rates and market shares are not available. Operating margins are also not explicitly broken down by segment, but we can make estimates based on overall operating margins. Remember all values will be expressed as percentages unless otherwise noted.
Business Segments:
PIX Transmissions’ core business is divided into two main segments:
1. Manufacturing of V-Belts:
- Name: Power Transmission Belts Manufacturing
- Revenue: Approximated at 98% of total revenue (Standalone: ₹4,453.17 crore; Consolidated: ₹4,814.44 crore). This segment represents the core business activity.
- Growth Rate: Cannot be precisely determined without the previous year’s segmental revenue data. The overall revenue growth was minimal (Standalone) or slightly negative (Consolidated) for the year.
- Operating Margin (Estimate): Precise segment operating margin is not provided. An estimate can be made assuming a similar operating margin percentage as that of the overall operation. A precise operating margin figure can only be obtained from a complete, detailed segmented income statement.
- Market Share: Not provided in the annual report.
- Key Products: Various types of V-belts (ribbed/poly V-belts, timing/synchronous belts, banded belts, special construction belts, automotive belts, industrial belts, agricultural belts, lawn and garden belts).
- Geographic Presence: India (multiple locations within Nagpur) and international markets (UAE, UK, Germany), representing a significant portion of their revenue.
2. Trading of Powerware Products:
- Name: Trading of Powerware Products
- Revenue: Approximated at 2% of total revenue (Standalone: ₹89.7 million; Consolidated: ₹112.4 million). This is a significantly smaller revenue contributor compared to the manufacturing segment.
- Growth Rate: Cannot be determined precisely without the previous year’s segmental revenue data.
- Operating Margin (Estimate): Similar to the manufacturing segment, the precise operating margin for trading is not provided in the report and would require the full segmented income statement.
- Market Share: Not specified in the report.
- Key Products: Pulleys, couplings, bushes, and other power transmission accessories.
- Geographic Presence: India and international markets. The specifics aren’t detailed.
Limitations of Analysis:
The significant limitation of this analysis is the lack of detailed segmental reporting in the provided excerpts. The annual report should be consulted for a complete breakdown of the segmental performance, market share data, and operational details to calculate more accurate figures for each of the items listed.
Risk Assessment #
Based on the provided annual report, here’s a summary of the key risk factors identified by PIX Transmissions Limited. Categorization, impact severity, and likelihood are assessed based on the information given in the report; precise quantification is not possible without further detailed risk assessment reports from the company.
I. Key Risk Factors:
The annual report highlights many key risk factors impacting PIX Transmissions’ operations. A categorization is proposed below, along with a description and qualitative assessment.
A. External Risk Factors:
Category: Geopolitical and Macroeconomic Risks
- Description: Global geopolitical instability, conflicts (especially those impacting shipping lanes like the Red Sea conflict), and macroeconomic factors like high borrowing costs in key export markets (North America and Western Europe) and cooling of pent-up demand after the pandemic.
- Impact Severity: High (potential for significant disruption to supply chains, reduced sales volume and profitability).
- Likelihood: Moderate to High (given the current global environment).
- Mitigation Strategies: Shifting sales focus to the domestic market, engaging with freight forwarders to minimize supply chain disruption.
- Trends: Geopolitical uncertainties are likely to persist in the short to medium term, while interest rate increases might eventually ease, though this is uncertain.
Category: Market Risk
- Description: Fluctuations in foreign exchange rates and commodity prices impacting profitability.
- Impact Severity: Moderate to High (depending on the volatility of exchange rates and input material costs).
- Likelihood: Moderate (foreign exchange risk is actively managed using hedging, but it persists; commodity price fluctuations are external).
- Mitigation Strategies: Hedging through forward contracts to manage foreign exchange risk.
- Trends: Foreign exchange rate volatility is expected to persist, while commodity price trends remain uncertain.
B. Internal Risk Factors:
Category: Operational Risks
- Description: Disruptions in production due to equipment failures or supply chain issues. The report mentions a large ERP implementation project. Successful implementation is vital; failure could severely impact operations.
- Impact Severity: High (potential for production delays and increased costs).
- Likelihood: Moderate (well-maintained machinery and active supply chain management can reduce likelihood).
- Mitigation Strategies: Regular maintenance and inspections of machinery, and proactive supply chain management. Successful implementation of new ERP system.
- Trends: The success of new ERP implementation will dictate future operational efficiency.
Category: Financial Risks
- Description: The report mentions the risk of high debt levels. While their debt-to-equity ratio has improved, high debt still leaves them vulnerable to interest rate increases.
- Impact Severity: Moderate (interest expense and potential difficulty in servicing debt during financial downturns).
- Likelihood: Moderate (depends on future interest rate trends and overall market conditions).
- Mitigation Strategies: Maintaining a healthy capital structure and financial flexibility to manage potential debt servicing issues.
- Trends: The trend in debt levels will depend on their ability to maintain growth and profitability while managing capital expenditures.
II. Limitations:
The provided excerpts offer a limited view of the company’s overall risk assessment. A complete risk assessment would contain much more detailed information and quantified assessments of likelihood and severity. This analysis is based solely on information explicitly mentioned within the provided annual report.
Strategic Overview #
Management Assessment #
PIX Transmissions Limited’s management outlined many key strategies, competitive advantages, market conditions, challenges, and opportunities in their discussion and analysis. Here’s a summary:
I. Key Strategies:
Domestic Market Focus: Given the challenges in international markets (high borrowing costs, demand normalization), the company is strategically prioritizing growth in the robust Indian domestic market. This demonstrates a flexible approach to market conditions.
Operational Efficiency Improvements: The implementation of a new ERP system is a key strategic initiative aimed at streamlining operations, improving data analytics capabilities, and enhancing overall efficiency. This is a long-term strategy to improve profitability and competitiveness.
Capacity Building: The company is investing in increasing production capacity and securing financial resources to prepare for future growth opportunities. This proactive approach suggests confidence in their future prospects.
II. Competitive Advantages:
Established Market Position: PIX Transmissions’ long history and established presence in the power transmission belts market give them a strong brand recognition and customer base.
State-of-the-Art Facilities: The report emphasizes their advanced manufacturing units and automated rubber mixing facilities. This technological edge improves production efficiency and product quality.
Product Diversification: Offering a wide range of V-belts and related products caters to various industry segments, reducing reliance on a single product category.
III. Market Conditions:
Robust Domestic Market: The Indian domestic market for power transmission belts is highlighted as a significant growth area, providing a foundation for expansion.
Global Headwinds: The global economic landscape presents challenges with high borrowing costs and cooling demand in key export markets. This necessitates a strategic shift in focus.
Supply Chain Disruptions: Geopolitical instability and conflicts in regions like the Red Sea are causing disruptions in freight rates and container availability.
IV. Challenges:
Geopolitical Uncertainty: Global conflicts and political instability significantly impact supply chains and international trade, posing a substantial challenge.
High Interest Rates: Increased borrowing costs, especially in their major export markets, constrain profitability and hamper growth in those regions.
Demand Normalization: Post-pandemic demand normalization presents a challenge for sales and revenue growth.
Competition: Although not specifically detailed, competition within the power transmission belt industry exists and will continue to influence their market share and profitability.
V. Opportunities:
Domestic Market Expansion: The strong growth within the Indian market presents significant opportunities for increasing sales and market share.
Technological Innovation: Investment in research and development can create opportunities for developing new products that address evolving industry needs and improve their competitive advantage.
Strategic Acquisitions: The report does not specifically mention this, but pursuing acquisitions of smaller players in the industry could expand their market reach.
VI. Overall Management Perspective:
Management expresses a positive outlook on the company’s future despite the challenges. Their strategies show a proactive approach in adapting to changing market conditions, leveraging existing strengths, and preparing for future growth opportunities. Their focus on operational efficiency improvements and domestic market expansion represents a measured, strategic response to the complexities of the global market.
ESG Ratings #
The provided annual report does not include ESG ratings from any external agencies. While the report details the company’s ESG initiatives and policies, it does not mention any scores or ratings assigned by organizations like MSCI, Sustainalytics, Refinitiv, or others that provide ESG assessments. To find ESG ratings for PIX Transmissions Limited, you would need to consult specialized ESG data providers or directly check the ratings on the websites of the major ESG rating agencies.
ESG Initiatives #
PIX Transmissions Limited’s annual report provides information on their environmental, social, and governance (ESG) initiatives, but detailed quantitative data, especially on carbon footprint and sustainability goals, is limited. Here’s a summary based on the available information:
I. Environmental Initiatives:
The company focuses on resource efficiency and waste reduction:
Energy Conservation: They are actively pursuing energy conservation measures across electricity, fuel, and water usage. Specific actions include switching from furnace oil to biomass briquettes for steam generation, automating processes to optimize steam utilization, and implementing waste heat recovery systems. However, precise energy consumption figures (in Joules or kWh) and resulting reductions are not provided.
Water Conservation: Initiatives include setting up a sewage treatment plant and an effluent treatment plant to reuse treated water, installing cooling towers for recirculation, and implementing water softening plants to reduce water usage and improve efficiency. Again, precise figures on water usage and reduction are missing.
Waste Management: The company addresses various waste streams, including plastic, e-waste, hazardous waste, and other general waste, aiming for responsible disposal. They mention compliance with EPR norms for plastic waste and using authorized recyclers for e-waste and hazardous waste. Quantitative data on waste generation and recycling rates are not detailed.
Air Emissions: The report provides some limited data on air emissions (NOx, SOx, PM), but complete details about their greenhouse gas (GHG) emissions (Scope 1 and 2) are not present.
Other Initiatives: The report mentions rain water harvesting and efforts to reduce the usage of hazardous and toxic chemicals. However, there is a lack of sufficient detail and quantitative data on these.
II. Carbon Footprint:
The annual report does not provide a detailed calculation of the company’s carbon footprint. The report provides limited data on some air emissions, but essential information for a full carbon footprint assessment (Scope 1, 2, and 3 emissions) is missing. To determine their carbon footprint, one would need to consult external data providers or the company directly.
III. Social Initiatives:
Employee Well-being: The company focuses on employee well-being through health insurance, accident insurance (for employees and workers), and staff welfare programs. Specific details on the percentage of employees covered and associated costs are mentioned.
Employee Training: They conduct training programs on health and safety, and skill upgradation for their employees and workers. The report provides the number of employees and workers trained but not details on the type of training or its impact.
Corporate Social Responsibility (CSR): The company’s CSR activities focus on education (for blind and underprivileged children) and healthcare (medical facilities for underprivileged communities). The amount spent on CSR activities during the financial year is reported.
Diversity and Inclusion: Limited information is given in this area.
IV. Governance Practices:
The report extensively covers the company’s governance practices, encompassing:
- Board Composition: A detailed breakdown of the board members and their roles is presented.
- Board Committees: The company has established various board committees (Audit, Nomination & Remuneration, Stakeholder Relationship Committee, CSR & Governance Committee, and Risk Management Committee), demonstrating a structured approach to corporate governance.
- Code of Conduct & Policies: The report mentions a detailed Code of Conduct and other policies addressing related party transactions, insider trading, and whistleblower protection.
- Compliance: Compliance with laws and regulations is emphasized, though there’s a mention of a past fine relating to the late appointment of a woman director.
V. Sustainability Goals:
The annual report does not explicitly state specific, quantifiable sustainability goals with defined timelines. While the report details many environmental and social initiatives, the lack of explicit targets makes it difficult to assess progress towards long-term sustainability. Management mentions ongoing work in this area but refrains from specific, measurable objectives.
Overall Assessment:
PIX Transmissions shows a commitment to ESG principles, especially in governance and some social programs. However, the report is lacking quantitative information on many key environmental and sustainability aspects (especially the carbon footprint and sustainability goals), making a detailed assessment of their overall ESG performance challenging. More detailed data and clearly defined sustainability targets are needed for a thorough evaluation.
Additional Information #
Operational Metrics #
Based on the provided annual report:
R&D Expenditure: The report states that there was no R&D expenditure in the current fiscal year (2023-24) nor in the previous fiscal year (2022-23).
Employee Count: As of March 31, 2024:
- Employees: 277 (257 male, 20 female)
- Workers: 1,363 (all male)
- Total (Employees + Workers): 1,640
Note that the report distinguishes between “employees” and “workers,” suggesting different employment classifications or contractual arrangements. The total count includes both categories.
Key Events #
Based on the annual report, the most significant events during the fiscal year 2023-24 for PIX Transmissions Limited were:
ERP System Upgrade: The company embarked on a major project to upgrade its Enterprise Resource Planning (ERP) system. This system-wide project aimed to improve operational efficiency and improve data analytics capabilities. The successful completion of this project is highlighted as a significant achievement.
Domestic Market Focus: Due to global economic headwinds (high borrowing costs, cooling demand in key export markets), the company shifted its sales focus toward the domestic Indian market. This strategic pivot was a significant response to changing market conditions.
Subsidiary Performance: While specific financial details for each subsidiary are limited, the report mentions that consolidated financials include the performance of subsidiaries operating in the UK, Germany, and the Middle East. The overall strong consolidated financial performance suggests positive contributions from these subsidiaries.
Director Changes: The report mentions that Mr. Rishipal Sethi and Ms. Shirley Paul retired by rotation from the Board and were eligible for reappointment. This is a standard corporate governance process. Additionally, many new Independent Directors were appointed.
Dividend Declaration: The Board recommended a dividend of ₹7.00 per equity share, signaling the company’s profitability and commitment to shareholder returns.
These events highlight a year of strategic adaptation, operational improvement, and continued growth for PIX Transmissions Limited despite facing some global economic challenges.