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FIRSTSOURCE SOLUTIONS 2022-23 Annual Report Analysis

Mon, 17 Jul

FIRSTSOURCE SOLUTIONS 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.

FIRSTSOURCE SOLUTIONS Income Statement Analysis

• Operating income during the year rose 1.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.7% in FY23 as against 16.2% in FY22.
• Depreciation charges increased by 5.5% and finance costs increased by 23.5% YoY, respectively.
• Other income grew by 3641.7% YoY.
• Net profit for the year declined by 4.3% YoY.
• Net profit margins during the year declined from 9.1% in FY22 to 8.5% in FY23.

FIRSTSOURCE SOLUTIONS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	59,212	60,223	1.7%
Other income	Rs m	36	1,343	3,641.7%
Total Revenues	Rs m	59,247	61,566	3.9%
Gross profit	Rs m	9,568	8,231	-14.0%
Depreciation	Rs m	2,494	2,632	5.5%
Interest	Rs m	639	790	23.5%
Profit before tax	Rs m	6,471	6,152	-4.9%
Tax	Rs m	1,106	1,015	-8.2%
Profit after tax	Rs m	5,365	5,137	-4.3%
Gross profit margin	%	16.2	13.7
Effective tax rate	%	17.1	16.5
Net profit margin	%	9.1	8.5

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FIRSTSOURCE SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 16 billion as compared to Rs 15 billion in FY22, thereby witnessing an increase of 1.7%.
• Long-term debt down at Rs 1 billion as compared to Rs 3 billion during FY22, a fall of 49.0%.
• Current assets fell 1% and stood at Rs 14 billion, while fixed assets fell 1% and stood at Rs 40 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 54 billion as against Rs 54 billion during FY22, thereby witnessing a fall of 1%.

FIRSTSOURCE SOLUTIONS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	29,815	33,017	10.7
Current Liabilities	Rs m	15,343	15,597	1.7
Long-term Debt	Rs m	2,733	1,394	-49.0
Total Liabilities	Rs m	54,269	53,696	-1.1
Current assets	Rs m	14,212	14,082	-0.9
Fixed Assets	Rs m	40,057	39,613	-1.1
Total Assets	Rs m	54,269	53,696	-1.1

FIRSTSOURCE SOLUTIONS Cash Flow Statement Analysis

• FIRSTSOURCE SOLUTIONS's cash flow from operating activities (CFO) during FY23 stood at Rs 8 billion, an improvement of 13.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 164 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 687 million from the Rs -488 million net cash flows seen during FY22.

FIRSTSOURCE SOLUTIONS 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	7,036	7,950	13.0%
Cash Flow from Investing Activities	Rs m	-5,946	164	-
Cash Flow from Financing Activities	Rs m	-1,580	-7,434	-
Net Cash Flow	Rs m	-488	687	-

Current Valuations for FIRSTSOURCE SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.4, an decline from the EPS of Rs 7.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 139.1, stands at 18.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 10.4 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	85.0	86.4
TTM Earnings per share	Rs	7.7	7.4
Diluted earnings per share	Rs	7.7	7.4
Price to Cash Flow	x	11.1	10.4
TTM P/E ratio	x	16.3	18.9
Price / Book Value ratio	x	4.1	2.5
Market Cap	Rs m	122,618	81,182
Dividends per share (Unadj.)	Rs	3.5	3.5

Ratio Analysis for FIRSTSOURCE SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.9x during FY23, from 0.9x 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 deteriorated and stood at 8.8x during FY23, from 11.1x 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 declined and down at 15.6% during FY23, from 18.0% 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 20.2% during FY23, from 21.8% 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 declined and down at 11.0% during FY23, from 11.1% 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	0.9	0.9
Debtors’ Days	Days	59	63
Interest coverage	x	11.1	8.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	11.1	11.0
Return on equity	%	18.0	15.6
Return on capital employed	%	21.8	20.2

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

FIRSTSOURCE SOLUTIONS Share Price Performance

Over the last one year, FIRSTSOURCE SOLUTIONS share price has moved up from Rs 102.8 to Rs 139.1, registering a gain of Rs 36.4 or around 35.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 31,378.2 (up 0.3%). Over the last one year it has moved up from 27,122.9 to 31,378.2, a gain of 4,255 points (up 15.7%).

Overall, the S&P BSE SENSEX is up 24.4% over the year.

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