AVANTEL SOFT 2021-22 Annual Report Analysis

Fri, 20 May

AVANTEL SOFT 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.

AVANTEL SOFT Income Statement Analysis

• Operating income during the year rose 36.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 28.0% in FY22 as against 31.8% in FY21.
• Depreciation charges increased by 32.8% and finance costs decreased by 0.1% YoY, respectively.
• Other income grew by 56.9% YoY.
• Net profit for the year grew by 17.2% YoY.
• Net profit margins during the year declined from 22.0% in FY21 to 18.9% in FY22.

AVANTEL SOFT Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	697	950	36.3%
Other income	Rs m	9	14	56.9%
Total Revenues	Rs m	706	964	36.5%
Gross profit	Rs m	222	266	20.1%
Depreciation	Rs m	30	40	32.8%
Interest	Rs m	15	15	-0.1%
Profit before tax	Rs m	185	225	21.4%
Tax	Rs m	32	45	41.7%
Profit after tax	Rs m	153	180	17.2%
Gross profit margin	%	31.8	28.0
Effective tax rate	%	17.1	20.0
Net profit margin	%	22.0	18.9

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AVANTEL SOFT Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 225 million as compared to Rs 167 million in FY21, thereby witnessing an increase of 34.8%.
• Current assets rose 10% and stood at Rs 716 million, while fixed assets rose 70% and stood at Rs 374 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1 billion as against Rs 868 million during FY21, thereby witnessing a growth of 26%.

AVANTEL SOFT Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	662	825	24.6
Current Liabilities	Rs m	167	225	34.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	868	1,090	25.6
Current assets	Rs m	648	716	10.5
Fixed Assets	Rs m	220	374	70.3
Total Assets	Rs m	868	1,090	25.6

AVANTEL SOFT Cash Flow Statement Analysis

• AVANTEL SOFT's cash flow from operating activities (CFO) during FY22 stood at Rs -323 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 226 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 95 million, an improvement of 471% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -3 million from the Rs 4 million net cash flows seen during FY21.

AVANTEL SOFT 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	447	-323	-
Cash Flow from Investing Activities	Rs m	-417	226	-
Cash Flow from Financing Activities	Rs m	-25	95	-
Net Cash Flow	Rs m	4	-3	-

Current Valuations for AVANTEL SOFT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.4, an improvement from the EPS of Rs 37.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,154.9, stands at 26.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.7 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 13.2 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	172.2	234.6
TTM Earnings per share	Rs	37.9	44.4
Diluted earnings per share	Rs	37.8	44.3
Price to Cash Flow	x	8.4	13.2
TTM P/E ratio	x	10.0	26.0
Price / Book Value ratio	x	2.0	3.5
Market Cap	Rs m	1,297	2,901
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for AVANTEL SOFT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.2x during FY22, from 3.9x 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 improved and stood at 15.8x during FY22, from 13.2x 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 declined and down at 21.8% during FY22, from 23.1% 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 declined and down at 29.1% during FY22, from 30.2% 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 declined and down at 17.9% during FY22, from 19.4% 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	3.9	3.2
Debtors’ Days	Days	687	1,389
Interest coverage	x	13.2	15.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	19.4	17.9
Return on equity	%	23.1	21.8
Return on capital employed	%	30.2	29.1

To see how AVANTEL SOFT has performed over the last 5 years, please visit here.

AVANTEL SOFT Share Price Performance

Over the last one year, AVANTEL SOFT share price has moved up from Rs 526.3 to Rs 1,154.9, registering a gain of Rs 628.6 or around 119.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,289.9 (up 1.5%). Over the last one year it has moved up from 26,505.1 to 29,289.9, a gain of 2,785 points (up 10.5%).

Overall, the S&P BSE SENSEX is up 8.2% over the year.

(To know more, check out historical annual results for AVANTEL SOFT and quarterly results for AVANTEL SOFT)

Read: Latest Annual Report Analysis of AVANTEL