Exchange: BSE | Sector: Consumer Defensive | Industry: Food Distribution
Q3 2023
Published: Dec 31, 2023
Earnings Highlights
Revenue of $463.15M up 0% year-over-year
EPS of $0.46 increased by 0% from previous year
Gross margin of 4.8%
Net income of 10.40M
"N/A" - N/A
Healthy Life Agritec Ltd (HEALTHYLIFE.BO) QQ3 2023 Results Analysis — Modest Margin, Strong Liquidity, and Early Top-Line Momentum in Food Distribution
Executive Summary
Healthy Life Agritec Ltd reported Q3 2023 revenue of INR 463.15 crore with a gross margin of 4.83% and a net margin of 2.25%, delivering net income of INR 10.40 crore and EBITDA of INR 14.42 crore. The quarter shows a notable QoQ revenue uplift from the prior quarter (Q2 2023 revenue of INR 201.59 crore), suggesting initial momentum in the company’s food distribution business within Maharashtra and Karnataka. Operating leverage appears limited by thin gross margins; however, the company benefits from a solid liquidity position (current ratio 4.91, quick ratio 4.23) and a conservative balance sheet (debt ratio 0.0747, debt/equity 0.0935).
Despite positive earnings, cash flow metrics signal limited cash generation: operating cash flow per share is negative at INR -0.00588 and free cash flow per share is likewise negative, while cash per share stands at INR 0.164. The stock trades at a subdued multiple (P/E 2.31, P/B 0.358), reflecting a cheap valuation but also signaling execution risk given thin margins and limited visibility on continued top-line growth. Management commentary is not included in the provided data, limiting qualitative alignment with the quarter’s financials. Investors should monitor margin progression, working capital management, and capacity to sustain revenue growth beyond a single-quarter spike.
Overall stance: the quarter demonstrates potential for margin stabilization alongside top-line expansion, supported by strong liquidity and low leverage. The key question for investors is whether the Q3 revenue spike can be replicated and whether gross margins can be meaningfully expanded through operating efficiencies and procurement optimization.
Key Performance Indicators
Revenue
463.15M
QoQ: N/A | YoY:N/A
Gross Profit
22.38M
4.83% margin
QoQ: N/A | YoY:N/A
Operating Income
14.06M
QoQ: N/A | YoY:N/A
Net Income
10.40M
QoQ: N/A | YoY:N/A
EPS
0.46
QoQ: N/A | YoY:N/A
Revenue Trend
Margin Analysis
Key Insights
Revenue (Q3 2023): INR 463,152,500; QoQ growth from Q2 2023: INR 201,588,500 -> INR 463,152,500 (~129% QoQ). YoY data not provided.
Net Income: INR 10,404,500; Net Margin: 2.25% (Net Income / Revenue).
Financial Highlights
Revenue, Margin, and Leverage
- Revenue (Q3 2023): INR 463,152,500; QoQ growth from Q2 2023: INR 201,588,500 -> INR 463,152,500 (~129% QoQ). YoY data not provided.
- Gross Profit: INR 22,377,500; Gross Margin: 4.83% (Gross Profit / Revenue).
- EBITDA: INR 14,423,500; EBITDA Margin: 3.12% (EBITDA / Revenue).
- Operating Income: INR 14,055,500; Operating Margin: 3.03% (Operating Income / Revenue).
- Net Income: INR 10,404,500; Net Margin: 2.25% (Net Income / Revenue).
- Earnings per Share (EPS): INR 0.46; Diluted EPS: INR 0.46; Weighted Avg Shares: 22,378,947.
- Income Tax: INR 3,439,000; Pretax Profit: INR 13,843,500; Effective Tax Rate: 24.8%.
Liquidity and Balance Sheet
- Current Ratio: 4.91; Quick Ratio: 4.23; Cash Ratio: 0.0574 (low cash cushion).
- Days Sales Outstanding (DSO): 48.24; Days Inventory Outstanding (DIO): 8.91; Days Payables Outstanding (DPO): 5.48; Cash Conversion Cycle (CCC): 51.67 days.
- Debt Ratios: Debt Ratio 0.0747; Debt to Equity 0.0935; Long-Term Debt to Capitalization 1.0%; Total Debt to Capitalization 8.55%.
- Asset Utilization: Asset Turnover 1.377; Inventory Turnover 10.10; Receivables Turnover 1.866; Fixed Asset Turnover 21.29.
- Cash Flow: Operating Cash Flow per Share (OCFPS) -0.00588; Free Cash Flow per Share (FCFPS) -0.00588; Cash per Share 0.164.
Valuation and Market Metrics
- Price/Earnings (P/E): 2.31; Price/Book (P/B): 0.358; Price/Sales (P/S): 0.208; Price/Operating Cash Flows: negative; EV/EBITDA: 8.16.
- Dividend Payout Ratio: 0; Dividend Yield: 0%. Earnings yield and cash generation suggest a capital-allocation stance focused on working capital efficiency rather than distributions.
- Return Metrics: ROA 3.09%; ROE 3.87%; ROCE 5.16%.
- Revenue / Margin health indicates a lean-margin business with potential for margin expansion pending scale and procurement optimization.
Income Statement
Metric
Value
YoY Change
QoQ Change
Key Financial Ratios
currentRatio
4.91
grossProfitMargin
4.83%
operatingProfitMargin
3.03%
netProfitMargin
2.25%
returnOnAssets
3.09%
returnOnEquity
3.87%
debtEquityRatio
0.09
operatingCashFlowPerShare
$-0.01
freeCashFlowPerShare
$-0.01
priceToBookRatio
0.36
priceEarningsRatio
2.31
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings Transcript: Not provided in the input. No management quotes or themes are available to synthesize for QQ3 2023. If an earnings call transcript is supplied, please share to integrate themes such as margin management, input cost dynamics (milk and poultry feed), distribution strategy, and market conditions into this section.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit management guidance for the next quarter or fiscal year was provided in the input data. Given the Q3 2023 performance, the forward outlook would hinge on: (a) sustaining the revenue trajectory observed in Q3, (b) execution to improve gross margins beyond the 4.83% level through cost controls and procurement optimization, and (c) maintaining inflation-adjusted input costs in dairy and poultry segments. Risks include commodity price volatility, competitive intensity in Maharashtra and Karnataka, and potential supply chain disruptions. Investors should monitor management commentary on revenue mix (milk trading, poultry, and agro products), ongoing cost-reduction initiatives, and any capex plans that could influence cash flows.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
HEALTHYLIFE.BO Focus
4.83%
3.03%
3.87%
2.31%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Healthy Life Agritec Ltd presents a high-uncertainty, low-valuation opportunity typical of small-cap consumer defensive players. The Q3 2023 results show top-line momentum with a potential for margin improvement, supported by strong liquidity and minimal leverage. However, the business exhibits thin margins and weak cash flow generation, implying reliance on working capital efficiency and potential external funding for sustained growth. The attractive valuation (P/E ~2.3, P/B ~0.36) provides a margin of safety, but the absence of explicit guidance and the lack of peer benchmarking temper conviction. Investors with a speculative tilt may consider a position, contingent on clearer visibility into gross margin expansion, sustainable revenue growth, and positive free cash flow in upcoming quarters. Key monitorables: revenue growth trajectory beyond Q3, gross margin trajectory, working capital dynamics, capex plans, and any management commentary on strategic initiatives to scale profitability.
Key Investment Factors
Growth Potential
Potential for revenue growth through expanded distribution, entry into additional regional markets, and optimization of procurement logistics. High inventory turnover (10.10x) and a lean cost structure suggest room for margin expansion if sales mix shifts toward higher-margin products or procurement efficiencies are realized.
Profitability Risk
Thin gross margin (~4.8%) exposes the business to commodity price volatility and input cost shocks. Negative operating cash flow per share indicates limited cash generation, which could pressure liquidity if working capital needs rise. Absence of dividend policy and negative FCF may deter income-focused investors. No explicit guidance or peer data limits benchmarking and clarity on future trajectory.
Financial Position
Strong liquidity with current and quick ratios well above 1, and minimal leverage (Debt/Equity ~0.0935, Debt Ratio 0.0747). Cash per share is modest (INR 0.164) with a small negative OCF per share, implying net cash holdings can support limited near-term commitments but not robust free cash flow generation. Valuation remains attractive (P/E 2.31, P/B 0.358) relative to many peers, but earnings quality and cash flow dynamics warrant cautious positioning.
SWOT Analysis
Strengths
Low leverage and conservative balance sheet (Debt ratio 7.5%, Debt/Equity 0.09) support financial flexibility.
Healthy liquidity indicators with current ratio 4.91 and quick ratio 4.23.
Positive net income in Q3 2023 (INR 10.40 crore) and EBITDA margin around 3.12%.
Efficient inventory management (Inventory turnover 10.10) and short inventory days (8.91).
Weaknesses
Thin gross margin (4.83%) and modest EBITDA/net margins, suggesting limited cushion against cost increases.
Revenue growth appears volatile with a sharp QoQ spike in Q3 2023; sustainability of this trajectory is unconfirmed.
Negative cash flow from operations per share despite positive net income; potential working capital sensitivity.
No dividend payout and limited visibility on long-term profitability and cash generation.
Opportunities
Scale distribution footprint beyond Maharashtra and Karnataka to diversify risk and capture new demand.
Procurement optimization and cost reduction could lift gross margins over time.
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