UGRO CAPITAL 2021-22 Annual Report Analysis

Thu, 31 Mar

UGRO 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.

UGRO CAPITAL Income Statement Analysis

• Interest income during the year rose 103.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 208.3% YoY during the same period.
• Operating expenses increased by 67.0% YoY during the year.
• The company's net interest income (NII) increased by 59.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 6.7% in FY22 as against 7.9% in FY21.
• Other income increased by 74.1% YoY during the year.
• Net profit for the year declined by 49.3% YoY.
• Net profit margins during the year declined to 4.7% in FY22 from 19.0% in FY21.

UGRO CAPITAL Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	1,510	3,076	103.7%
Other Income	Rs m	35	61	74.1%
Interest Expense	Rs m	446	1,374	208.3%
Net Interest Income	Rs m	1,064	1,702	59.9%
Operating Expense	Rs m	861	1,438	67.0%
Pre-provision Operating Profit	Rs m	239	325	36.2%
Provisions & Contingencies	Rs m	1,795	4,191	133.5%
Profit before tax	Rs m	121	202	66.4%
Tax	Rs m	-166	56	133.9%
Profit after tax	Rs m	287	146	-49.3%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	7.9	6.7
Net profit margin	%	19.0	4.7

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UGRO 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 24.5 bn as compared to Rs 12.8 bn during FY21, a rise of 91.1%.
• Cost of deposits for UGRO CAPITAL rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 1.1 bn during the year from Rs 0.7 bn in FY21.
• Borrowing stood at Rs 600 m, a growth of 336.8% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 28.3 bn as against Rs 17.2 bn during FY21, thereby witnessing a rise of 64.3%.

UGRO CAPITAL Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	9,439	9,621	1.9%
Advances	Rs m	12,826	24,505	91.1%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	731	1,081	47.9%
Borrowings	Rs m	137	600	336.8%
Total Assets	Rs m	17,197	28,250	64.3%

Current Valuations for UGRO CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.1, an improvement from the EPS of Rs 4.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 167.1, stands at 74.9 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.3 times, while the price to income ratio stands at 3.5 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	21.4	43.6
Earnings per share (Unadj.)	Rs	4.1	2.1
Diluted earnings per share	Rs	3.7	1.9
Avg P/E ratio	Rs	27.6	74.9
Avg P/ABV ratio	Rs	1.0	1.3
Avg Market Cap	Rs	7,934	10,901
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for UGRO CAPITAL

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 2,450,475.2x during FY22, from 1,282,576.6x 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 0.06x during FY22, from 0.01x 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): UGRO CAPITAL's capital adequacy ratio (CAR) was at 34.4% as on 31 March 2022 as compared to 65.6% 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 deteriorated and stood at 1.5% during FY22, from 3.0% 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 deteriorated and stood at 0.52% during FY22, from 1.67% 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 7.02% during FY22, from 3.92% 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. UGRO CAPITAL's gross NPA ratio stood at 2.3% as of 31 March 2022 compared to 2.7% 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 UGRO CAPITAL was 1.7% in financial year 2022. This compared with 1.8% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	1,282,576.6	2,450,475.2
Debt to Equity Ratio	x	0.0	0.1
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	65.6	34.4
Return on Equity	%	3.0	1.5
Return on Assets	%	1.7	0.5
Return on Capital Employed	%	3.9	7.0
% of Gross NPAs	%	2.7	2.3
% of Net NPAs	%	1.8	1.7
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

UGRO CAPITAL Share Price Performance

Over the last one year, UGRO CAPITAL share price has moved up from Rs 120.8 to Rs 167.1, registering a gain of Rs 46.3 or around 38.3%.

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

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

Read: Latest Annual Report Analysis of UGRO CAPITAL