CHOICE INT. 2021-22 Annual Report Analysis

Thu, 31 Mar

CHOICE INT. 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.

CHOICE INT. Income Statement Analysis

• Operating income during the year rose 61.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 126.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 28.5% in FY22 as against 20.3% in FY21.
• Depreciation charges increased by 9.4% and finance costs decreased by 0.9% YoY, respectively.
• Other income grew by 109.1% YoY.
• Net profit for the year grew by 220.8% YoY.
• Net profit margins during the year grew from 9.9% in FY21 to 19.7% in FY22.

CHOICE INT. Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,687	2,718	61.1%
Other income	Rs m	71	148	109.1%
Total Revenues	Rs m	1,758	2,866	63.0%
Gross profit	Rs m	343	776	126.0%
Depreciation	Rs m	31	34	9.4%
Interest	Rs m	155	153	-0.9%
Profit before tax	Rs m	228	736	222.7%
Tax	Rs m	61	200	228.1%
Profit after tax	Rs m	167	536	220.8%
Gross profit margin	%	20.3	28.5
Effective tax rate	%	26.8	27.2
Net profit margin	%	9.9	19.7

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CHOICE INT. Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 5 billion as compared to Rs 4 billion in FY21, thereby witnessing an increase of 45.0%.
• Long-term debt stood at Rs 365 million as compared to Rs 262 million during FY21, a growth of 39.3%.
• Current assets rose 54% and stood at Rs 9 billion, while fixed assets rose 23% and stood at Rs 1 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 10 billion as against Rs 7 billion during FY21, thereby witnessing a growth of 49%.

CHOICE INT. Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,487	4,100	64.9
Current Liabilities	Rs m	3,571	5,179	45.0
Long-term Debt	Rs m	262	365	39.3
Total Liabilities	Rs m	6,546	9,762	49.1
Current assets	Rs m	5,544	8,530	53.9
Fixed Assets	Rs m	1,002	1,232	22.9
Total Assets	Rs m	6,546	9,762	49.1

CHOICE INT. Cash Flow Statement Analysis

• CHOICE INT.'s cash flow from operating activities (CFO) during FY22 stood at Rs -518 million, an improvement of 15.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 1 billion, an improvement of 544% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -46 million from the Rs -71 million net cash flows seen during FY21.

CHOICE INT. 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	-448	-518	-
Cash Flow from Investing Activities	Rs m	150	-1,017	-
Cash Flow from Financing Activities	Rs m	226	1,458	544.1%
Net Cash Flow	Rs m	-71	-46	-

Current Valuations for CHOICE INT.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.8, an improvement from the EPS of Rs 5.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 114.2, stands at 21.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 17.9 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	59.1	54.6
TTM Earnings per share	Rs	5.8	10.8
Diluted earnings per share	Rs	1.7	5.4
Price to Cash Flow	x	25.8	17.9
TTM P/E ratio	x	30.6	21.2
Price / Book Value ratio	x	1.3	2.5
Market Cap	Rs m	3,158	10,175
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for CHOICE INT.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY22, from 1.6x 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 5.8x during FY22, from 2.5x 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 13.1% during FY22, from 6.7% 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 19.9% during FY22, from 13.9% 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 7.1% during FY22, from 4.9% 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	1.6	1.6
Debtors’ Days	Days	1,647	1,096
Interest coverage	x	2.5	5.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	4.9	7.1
Return on equity	%	6.7	13.1
Return on capital employed	%	13.9	19.9

To see how CHOICE INT. has performed over the last 5 years, please visit here.

CHOICE INT. Share Price Performance

Over the last one year, CHOICE INT. share price has moved up from Rs 51.3 to Rs 114.2, registering a gain of Rs 62.8 or around 122.4%.

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

(To know more, check out historical annual results for CHOICE INT. and quarterly results for CHOICE INT.)