FAZE THREE 2022-23 Annual Report Analysis

Tue, 5 Sep

FAZE THREE 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.

FAZE THREE Income Statement Analysis

• Operating income during the year rose 10.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 23.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.2% in FY23 as against 16.3% in FY22.
• Depreciation charges increased by 42.0% and finance costs increased by 94.4% YoY, respectively.
• Other income declined by 20.1% YoY.
• Net profit for the year grew by 14.1% YoY.
• Net profit margins during the year grew from 10.1% in FY22 to 10.4% in FY23.

FAZE THREE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	5,045	5,582	10.6%
Other income	Rs m	70	56	-20.1%
Total Revenues	Rs m	5,114	5,638	10.2%
Gross profit	Rs m	824	1,016	23.3%
Depreciation	Rs m	102	145	42.0%
Interest	Rs m	77	151	94.4%
Profit before tax	Rs m	714	776	8.7%
Tax	Rs m	203	193	-4.9%
Profit after tax	Rs m	511	583	14.1%
Gross profit margin	%	16.3	18.2
Effective tax rate	%	28.5	24.9
Net profit margin	%	10.1	10.4

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FAZE THREE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 2.3%.
• Current assets rose 5% and stood at Rs 4 billion, while fixed assets rose 27% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 6 billion as against Rs 5 billion during FY22, thereby witnessing a growth of 13%.

FAZE THREE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,783	3,346	20.2
Current Liabilities	Rs m	2,298	2,351	2.3
Long-term Debt	Rs m	3	0	-100.0
Total Liabilities	Rs m	5,211	5,874	12.7
Current assets	Rs m	3,408	3,588	5.3
Fixed Assets	Rs m	1,803	2,287	26.8
Total Assets	Rs m	5,211	5,874	12.7

FAZE THREE Cash Flow Statement Analysis

• FAZE THREE's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -438 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -60 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 596 million from the Rs 35 million net cash flows seen during FY22.

FAZE THREE 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	-65	1,100	-
Cash Flow from Investing Activities	Rs m	-508	-438	-
Cash Flow from Financing Activities	Rs m	608	-60	-
Net Cash Flow	Rs m	35	596	1,608.9%

Current Valuations for FAZE THREE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.0, an improvement from the EPS of Rs 21.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 405.0, stands at 17.6 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 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 11.5 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	207.4	229.5
TTM Earnings per share	Rs	21.0	24.0
Diluted earnings per share	Rs	21.0	24.0
Price to Cash Flow	x	12.5	11.5
TTM P/E ratio	x	15.0	17.6
Price / Book Value ratio	x	2.1	2.5
Market Cap	Rs m	5,812	8,338
Dividends per share (Unadj.)	Rs	0.0	0.5

Ratio Analysis for FAZE THREE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY23, from 1.5x 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 6.2x during FY23, from 10.2x 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 17.4% during FY23, from 18.4% 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 27.7% during FY23, from 28.4% 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 12.5% during FY23, from 11.3% 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	1.5	1.5
Debtors’ Days	Days	6	6
Interest coverage	x	10.2	6.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.3	12.5
Return on equity	%	18.4	17.4
Return on capital employed	%	28.4	27.7

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

FAZE THREE Share Price Performance

Over the last one year, FAZE THREE share price has moved up from Rs 347.1 to Rs 405.0, registering a gain of Rs 57.9 or around 16.7%.

Overall, the S&P BSE SENSEX is up 11.9% over the year.

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