In my view, if we want to compare gross block with EV for understanding valuation, then we need to take into account the accumulated depreciation adjustment done in FY16.
Accordingly, we should add ~825cr (accumulated depreciation till FY16) back to the current reported gross block, to get a better picture.
As of 30’Sept’22:
Net block reported = Rs. 852cr (vs 766cr in Mar’22)
Reported Accumulated depreciation as of Mar’22 = Rs. 797cr
Adding 6 months depreciation = ~Rs. 55cr
Adding FY16 adjustment = Rs. 825cr
Adjusted gross block (as on Sept’22) = ~2500cr
(compared to current EV of ~1750cr)
Few details of what happened in FY16-17 (annual report):
Opening gross block of plant & machinery for PY was adjusted stating deemed cost as of 1 April 2015 to 839cr, which actually as per the previous annual report was 1637cr.
This was an adjustment done in FY16 for following IndAS and is not at all anything wrongdoing.
But I think, to assess companies value based on its gross block, we need to adjust this in other companies too.
Let me know, if I am thinking along the wrong lines. Happy to be corrected & learn.