ADITYA BIRLA CAPITAL 2021-22 Annual Report Analysis

Thu, 31 Mar

ADITYA BIRLA CAPITAL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during the year 2021-22.

ADITYA BIRLA CAPITAL Income Statement Analysis

• Interest income during the year rose 15.6% on a year-on-year (YoY) basis.
• Interest expenses were down by 11.1% YoY during the same period.
• Operating expenses increased by 20.0% YoY during the year.
• The company's net interest income (NII) increased by 22.3% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 14.1% in FY22 as against 13.1% in FY21.
• Other income increased by 38.5% YoY during the year.
• Net profit for the year increased by 51.4% YoY.
• Net profit margins during the year increased to 7.5% in FY22 from 5.8% in FY21.

ADITYA BIRLA CAPITAL Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	195,537	226,076	15.6%
Other Income	Rs m	1,734	2,401	38.5%
Interest Expense	Rs m	39,187	34,820	-11.1%
Net Interest Income	Rs m	156,350	191,256	22.3%
Operating Expense	Rs m	143,817	172,597	20.0%
Pre-provision Operating Profit	Rs m	14,267	21,060	47.6%
Provisions & Contingencies	Rs m	316	349	10.3%
Profit before tax	Rs m	12,773	19,458	52.3%
Tax	Rs m	4,400	6,267	42.4%
Profit after tax	Rs m	11,265	17,060	51.4%
Minority Interest	Rs m	209	459	119.7%
Net Interest Margin	%	13.1	14.1
Net profit margin	%	5.8	7.5

ADITYA BIRLA CAPITAL Balance Sheet Analysis

• The company's deposits during FY22 stood at Rs 0 m as compared to Rs 0 m in FY21, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 655.2 bn as compared to Rs 594.3 bn during FY21, a rise of 10.2%.
• Cost of deposits for ADITYA BIRLA CAPITAL rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 697.7 bn during the year from Rs 595.2 bn in FY21.
• Borrowing stood at Rs 97.3 bn, a growth of 56.1% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,408.2 bn as against Rs 1,244.8 bn during FY21, thereby witnessing a rise of 13.1%.

ADITYA BIRLA CAPITAL Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	135,674	152,998	12.8%
Advances	Rs m	594,332	655,236	10.2%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	595,193	697,699	17.2%
Borrowings	Rs m	62,327	97,281	56.1%
Total Assets	Rs m	1,244,846	1,408,151	13.1%

Current Valuations for ADITYA BIRLA CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.1, an improvement from the EPS of Rs 4.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 107.7, stands at 16.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.7 times, while the price to income ratio stands at 1.3 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	81.0	93.6
Earnings per share (Unadj.)	Rs	4.7	7.1
Diluted earnings per share	Rs	4.7	7.1
Avg P/E ratio	Rs	19.4	16.7
Avg P/ABV ratio	Rs	2.1	1.7
Avg Market Cap	Rs	218,281	284,521
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for ADITYA BIRLA CAPITAL

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 65,523,590.0x during FY22, from 59,433,220.0x during FY21. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.64x during FY22, from 0.46x during FY21. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): ADITYA BIRLA CAPITAL's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2022 as compared to 0.0% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 11.2% during FY22, from 8.3% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 1.21% during FY22, from 0.90% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 7.76% during FY22, from 7.72% during FY21. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. ADITYA BIRLA CAPITAL's gross NPA ratio stood at 0.0% as of 31 March 2022 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of ADITYA BIRLA CAPITAL was 0.0% in financial year 2022. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	59,433,220.0	65,523,590.0
Debt to Equity Ratio	x	0.5	0.6
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	0.0
Return on Equity	%	8.3	11.2
Return on Assets	%	0.9	1.2
Return on Capital Employed	%	7.7	7.8
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how ADITYA BIRLA CAPITAL has performed over the last 5 years, please visit here.

ADITYA BIRLA CAPITAL Share Price Performance

Over the last one year, ADITYA BIRLA CAPITAL share price has moved down from Rs 119.4 to Rs 107.7, registering a loss of Rs 11.7 or around 9.8%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

(To know more, you can check out historical annual results for ADITYA BIRLA CAPITAL here and quarterly results for ADITYA BIRLA CAPITAL here)

Read: Latest Annual Report Analysis of ADITYA BIRLA CAPITAL