DIGICONTENT 2021-22 Annual Report Analysis

Tue, 23 Aug

DIGICONTENT 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.

DIGICONTENT Income Statement Analysis

• Operating income during the year rose 30.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 101.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.3% in FY22 as against 10.6% in FY21.
• Depreciation charges decreased by 68.6% and finance costs decreased by 2.3% YoY, respectively.
• Other income grew by 78.6% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 17.5% in FY21 to 6.5% in FY22.

DIGICONTENT Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,489	3,241	30.2%
Other income	Rs m	50	89	78.6%
Total Revenues	Rs m	2,539	3,330	31.2%
Gross profit	Rs m	263	530	101.4%
Depreciation	Rs m	522	164	-68.6%
Interest	Rs m	121	119	-2.3%
Profit before tax	Rs m	-330	336	NA
Tax	Rs m	106	125	18.8%
Profit after tax	Rs m	-436	211	NA
Gross profit margin	%	10.6	16.3
Effective tax rate	%	-32.0	37.3
Net profit margin	%	-17.5	6.5

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DIGICONTENT Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 2 billion as compared to Rs 633 million in FY21, thereby witnessing an increase of 165.0%.
• Current assets fell 8% and stood at Rs 971 million, while fixed assets rose 78% and stood at Rs 712 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 2 billion as against Rs 1 billion during FY21, thereby witnessing a growth of 16%.

DIGICONTENT Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	-136	56	NA
Current Liabilities	Rs m	633	1,677	165.0
Long-term Debt	Rs m	800	0	-100.0
Total Liabilities	Rs m	1,454	1,684	15.8
Current assets	Rs m	1,055	971	-7.9
Fixed Assets	Rs m	400	712	78.3
Total Assets	Rs m	1,454	1,684	15.8

DIGICONTENT Cash Flow Statement Analysis

• DIGICONTENT's cash flow from operating activities (CFO) during FY22 stood at Rs 389 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -217 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -355 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -183 million from the Rs 105 million net cash flows seen during FY21.

DIGICONTENT 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	670	389	-41.9%
Cash Flow from Investing Activities	Rs m	-405	-217	-
Cash Flow from Financing Activities	Rs m	-159	-355	-
Net Cash Flow	Rs m	105	-183	-

Current Valuations for DIGICONTENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.6, an improvement from the EPS of Rs -7.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 16.2, stands at 6.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.9 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 2.4 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	42.8	55.7
TTM Earnings per share	Rs	-7.5	3.6
Diluted earnings per share	Rs	-7.5	3.6
Price to Cash Flow	x	4.9	2.4
TTM P/E ratio	x	-1.0	6.4
Price / Book Value ratio	x	-4.5	16.1
Market Cap	Rs m	611	902
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DIGICONTENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY22, from 1.7x 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 3.8x during FY22, from -1.7x 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 improved and stood at 376.6% during FY22, from 321.5% 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 812.9% during FY22, from -31.5% 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 19.5% during FY22, from -21.6% 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	1.7	0.6
Debtors’ Days	Days	686	643
Interest coverage	x	-1.7	3.8
Debt to equity ratio	x	-5.9	0.0
Return on assets	%	-21.6	19.5
Return on equity	%	321.5	376.6
Return on capital employed	%	-31.5	812.9

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

DIGICONTENT Share Price Performance

Over the last one year, DIGICONTENT share price has moved up from Rs 12.1 to Rs 16.2, registering a gain of Rs 4.2 or around 34.4%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 13,556.8 (down 1.2%). Over the last one year it has moved down from 14,743.5 to 13,556.8, a loss of 1,187 points (down 8.0%).

Overall, the S&P BSE SENSEX is up 6.7% over the year.

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