DANLAW TECHNOLOGIES 2022-23 Annual Report Analysis

Wed, 7 Feb

DANLAW TECHNOLOGIES has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

DANLAW TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 37.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 235.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.2% in FY23 as against 5.0% in FY22.
• Depreciation charges increased by 72.7% and finance costs increased by 94.7% YoY, respectively.
• Other income declined by 83.9% YoY.
• Net profit for the year grew by 74.4% YoY.
• Net profit margins during the year grew from 3.4% in FY22 to 4.3% in FY23.

DANLAW TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,216	1,671	37.5%
Other income	Rs m	47	8	-83.9%
Total Revenues	Rs m	1,263	1,679	32.9%
Gross profit	Rs m	61	204	235.2%
Depreciation	Rs m	41	71	72.7%
Interest	Rs m	18	36	94.7%
Profit before tax	Rs m	49	105	115.3%
Tax	Rs m	7	32	356.9%
Profit after tax	Rs m	42	73	74.4%
Gross profit margin	%	5.0	12.2
Effective tax rate	%	14.5	30.7
Net profit margin	%	3.4	4.3

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DANLAW TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 402 million as compared to Rs 307 million in FY22, thereby witnessing an increase of 30.9%.
• Long-term debt stood at Rs 243 million as compared to Rs 41 million during FY22, a growth of 486.9%.
• Current assets rose 42% and stood at Rs 790 million, while fixed assets rose 10% and stood at Rs 339 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1 billion as against Rs 865 million during FY22, thereby witnessing a growth of 31%.

DANLAW TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	229	359	57.0
Current Liabilities	Rs m	307	402	30.9
Long-term Debt	Rs m	41	243	486.9
Total Liabilities	Rs m	865	1,129	30.5
Current assets	Rs m	556	790	42.1
Fixed Assets	Rs m	309	339	9.7
Total Assets	Rs m	865	1,129	30.5

DANLAW TECHNOLOGIES Cash Flow Statement Analysis

• DANLAW TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 70 million, an improvement of 21.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -39 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 0 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 31 million from the Rs 9 million net cash flows seen during FY22.

DANLAW TECHNOLOGIES Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	57	70	21.9%
Cash Flow from Investing Activities	Rs m	-58	-39	-
Cash Flow from Financing Activities	Rs m	41	0	-99.6%
Net Cash Flow	Rs m	9	31	240.7%

Current Valuations for DANLAW TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.9, an improvement from the EPS of Rs 11.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 443.0, stands at 29.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.0 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 10.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	327.7	343.2
TTM Earnings per share	Rs	11.2	14.9
Diluted earnings per share	Rs	8.5	14.9
Price to Cash Flow	x	9.8	10.9
TTM P/E ratio	x	19.5	29.8
Price / Book Value ratio	x	4.4	4.4
Market Cap	Rs m	1,001	1,564
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DANLAW TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY23, from 1.8x during FY22. 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 3.9x during FY23, from 3.6x during FY22. 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 20.2% during FY23, from 18.2% during FY23. 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 23.4% during FY23, from 24.8% during FY22. 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 9.6% during FY23, from 6.9% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.8	2.0
Debtors’ Days	Days	550	657
Interest coverage	x	3.6	3.9
Debt to equity ratio	x	0.2	0.7
Return on assets	%	6.9	9.6
Return on equity	%	18.2	20.2
Return on capital employed	%	24.8	23.4

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

DANLAW TECHNOLOGIES Share Price Performance

Over the last one year, DANLAW TECHNOLOGIES share price has moved up from Rs 166.8 to Rs 443.0, registering a gain of Rs 276.3 or around 165.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,479.0 (up 2.5%). Over the last one year it has moved down from 36,402.7 to 28,479.0, a loss of 7,924 points (down 21.8%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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