DEN NETWORKS 2021-22 Annual Report Analysis

Sat, 16 Jul

DEN NETWORKS 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.

DEN NETWORKS Income Statement Analysis

• Operating income during the year fell 11.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 37.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.5% in FY22 as against 19.1% in FY21.
• Depreciation charges decreased by 64.2% and finance costs decreased by 72.2% YoY, respectively.
• Other income declined by 36.9% YoY.
• Net profit for the year declined by 3.6% YoY.
• Net profit margins during the year grew from 15.0% in FY21 to 16.4% in FY22.

DEN NETWORKS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	13,074	11,538	-11.8%
Other income	Rs m	1,970	1,244	-36.9%
Total Revenues	Rs m	15,044	12,781	-15.0%
Gross profit	Rs m	2,501	1,558	-37.7%
Depreciation	Rs m	2,506	897	-64.2%
Interest	Rs m	33	9	-72.2%
Profit before tax	Rs m	1,931	1,895	-1.9%
Tax	Rs m	-34	0	-100.0%
Profit after tax	Rs m	1,965	1,895	-3.6%
Gross profit margin	%	19.1	13.5
Effective tax rate	%	-1.8	0.0
Net profit margin	%	15.0	16.4

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

DEN NETWORKS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 4 billion as compared to Rs 5 billion in FY21, thereby witnessing an decrease of -10.8%.
• Current assets rose 5% and stood at Rs 27 billion, while fixed assets rose 9% and stood at Rs 9 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 36 billion as against Rs 34 billion during FY21, thereby witnessing a growth of 6%.

DEN NETWORKS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	27,746	31,410	13.2
Current Liabilities	Rs m	4,878	4,350	-10.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	34,285	36,348	6.0
Current assets	Rs m	25,736	26,995	4.9
Fixed Assets	Rs m	8,549	9,353	9.4
Total Assets	Rs m	34,285	36,348	6.0

DEN NETWORKS Cash Flow Statement Analysis

• DEN NETWORKS's cash flow from operating activities (CFO) during FY22 stood at Rs 967 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 960 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -255 million from the Rs -90 million net cash flows seen during FY21.

DEN NETWORKS 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	2,177	967	-55.6%
Cash Flow from Investing Activities	Rs m	-3,612	-2,182	-
Cash Flow from Financing Activities	Rs m	1,344	960	-28.6%
Net Cash Flow	Rs m	-90	-255	-

Current Valuations for DEN NETWORKS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.0, an decline from the EPS of Rs 4.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 34.1, stands at 9.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 8.6 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	27.4	24.2
TTM Earnings per share	Rs	4.1	4.0
Diluted earnings per share	Rs	4.1	4.0
Price to Cash Flow	x	5.3	8.6
TTM P/E ratio	x	12.0	9.4
Price / Book Value ratio	x	1.2	0.8
Market Cap	Rs m	34,577	23,969
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DEN NETWORKS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 6.2x during FY22, from 5.3x 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 204.4x during FY22, from 58.7x 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 6.0% during FY22, from 7.1% 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 6.1% during FY22, from 7.1% 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 5.2% during FY22, from 5.8% 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	5.3	6.2
Debtors’ Days	Days	26	57
Interest coverage	x	58.7	204.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.8	5.2
Return on equity	%	7.1	6.0
Return on capital employed	%	7.1	6.1

To see how DEN NETWORKS has performed over the last 5 years, please visit here.

DEN NETWORKS Share Price Performance

Over the last one year, DEN NETWORKS share price has moved down from Rs 55.2 to Rs 34.1, registering a loss of Rs 21.2 or around 38.3%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 12,429.8 (up 0.1%). Over the last one year it has moved down from 13,161.0 to 12,429.8, a loss of 731 points (down 5.6%).

Overall, the S&P BSE SENSEX is up 1.6% over the year.

(To know more, check out historical annual results for DEN NETWORKS and quarterly results for DEN NETWORKS)

Read: Latest Annual Report Analysis of DEN NETWORKS