ARIHANT CAPITAL 2021-22 Annual Report Analysis

Wed, 13 Jul

ARIHANT 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 FY21-22.

ARIHANT CAPITAL Income Statement Analysis

• Operating income during the year rose 46.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 49.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 42.8% in FY22 as against 42.0% in FY21.
• Depreciation charges decreased by 6.2% and finance costs increased by 73.4% YoY, respectively.
• Other income declined by 38.3% YoY.
• Net profit for the year grew by 43.4% YoY.
• Net profit margins during the year declined from 29.9% in FY21 to 29.2% in FY22.

ARIHANT CAPITAL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,157	1,697	46.7%
Other income	Rs m	5	3	-38.3%
Total Revenues	Rs m	1,162	1,700	46.3%
Gross profit	Rs m	485	726	49.5%
Depreciation	Rs m	13	12	-6.2%
Interest	Rs m	42	73	73.4%
Profit before tax	Rs m	436	644	47.7%
Tax	Rs m	91	149	64.3%
Profit after tax	Rs m	345	495	43.4%
Gross profit margin	%	42.0	42.8
Effective tax rate	%	20.8	23.1
Net profit margin	%	29.9	29.2

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ARIHANT CAPITAL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 3 billion as compared to Rs 3 billion in FY21, thereby witnessing an increase of 24.9%.
• Current assets rose 28% and stood at Rs 5 billion, while fixed assets rose 4% and stood at Rs 376 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 6 billion as against Rs 5 billion during FY21, thereby witnessing a growth of 26%.

ARIHANT CAPITAL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,821	2,289	25.7
Current Liabilities	Rs m	2,790	3,484	24.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	4,603	5,786	25.7
Current assets	Rs m	4,241	5,410	27.6
Fixed Assets	Rs m	362	376	3.9
Total Assets	Rs m	4,603	5,786	25.7

ARIHANT CAPITAL Cash Flow Statement Analysis

• ARIHANT CAPITAL's cash flow from operating activities (CFO) during FY22 stood at Rs -181 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 130 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 178 million, an improvement of 74% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 128 million from the Rs -283 million net cash flows seen during FY21.

ARIHANT CAPITAL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	-317	-181	-
Cash Flow from Investing Activities	Rs m	-68	130	-
Cash Flow from Financing Activities	Rs m	102	178	74.0%
Net Cash Flow	Rs m	-283	128	-

Current Valuations for ARIHANT CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.8, an improvement from the EPS of Rs 16.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 80.3, stands at 16.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.7 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 11.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	55.6	81.5
TTM Earnings per share	Rs	16.6	23.8
Diluted earnings per share	Rs	3.3	4.8
Price to Cash Flow	x	20.5	11.1
TTM P/E ratio	x	21.2	16.9
Price / Book Value ratio	x	0.7	2.5
Market Cap	Rs m	1,208	5,633
Dividends per share (Unadj.)	Rs	0.2	0.2

Ratio Analysis for ARIHANT CAPITAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.5x during FY21. 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 9.8x during FY22, from 11.4x during FY21. 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 21.6% during FY22, from 19.0% during FY22. 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 31.3% during FY22, from 26.2% during FY21. 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 9.8% during FY22, from 8.4% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.5	1.6
Debtors’ Days	Days	4,799	5,136
Interest coverage	x	11.4	9.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.4	9.8
Return on equity	%	19.0	21.6
Return on capital employed	%	26.2	31.3

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

ARIHANT CAPITAL Share Price Performance

Over the last one year, ARIHANT CAPITAL share price has moved down from Rs 147.8 to Rs 80.3, registering a loss of Rs 67.5 or around 45.7%.

Overall, the S&P BSE SENSEX is up 2.9% over the year.

(To know more, check out historical annual results for ARIHANT CAPITAL and quarterly results for ARIHANT CAPITAL)

Read: Latest Annual Report Analysis of ARIHANT CAPITAL