GEOJIT FINANCIAL SERVICES 2019-20 Annual Report Analysis

Tue, 31 Mar

GEOJIT FINANCIAL SERVICES has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

GEOJIT FINANCIAL SERVICES Income Statement Analysis

• Operating income during the year fell 0.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 21.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.6% in FY20 as against 25.7% in FY19.
• Depreciation charges increased by 19.5% and finance costs increased by 16.5% YoY, respectively.
• Other income declined by 46.5% YoY.
• Net profit for the year grew by 70.0% YoY.
• Net profit margins during the year grew from 9.7% in FY19 to 16.7% in FY20.

GEOJIT FINANCIAL SERVICES Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	3,081	3,054	-0.9%
Other income	Rs m	19	10	-46.5%
Total Revenues	Rs m	3,100	3,065	-1.1%
Gross profit	Rs m	793	964	21.7%
Depreciation	Rs m	209	250	19.5%
Interest	Rs m	25	29	16.5%
Profit before tax	Rs m	578	696	20.4%
Tax	Rs m	279	187	-32.8%
Profit after tax	Rs m	300	509	70.0%
Gross profit margin	%	25.7	31.6
Effective tax rate	%	48.2	26.9
Net profit margin	%	9.7	16.7

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GEOJIT FINANCIAL SERVICES Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 3 billion as compared to Rs 3 billion in FY19, thereby witnessing an increase of 6.6%.
• Current assets rose 13% and stood at Rs 7 billion, while fixed assets fell 28% and stood at Rs 2 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 9 billion as against Rs 9 billion during FY19, thereby witnessing a growth of 0%.

GEOJIT FINANCIAL SERVICES Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	5,232	4,985	-4.7
Current Liabilities	Rs m	3,166	3,375	6.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	9,010	9,027	0.2
Current assets	Rs m	6,225	7,027	12.9
Fixed Assets	Rs m	2,785	2,000	-28.2
Total Assets	Rs m	9,010	9,027	0.2

GEOJIT FINANCIAL SERVICES Cash Flow Statement Analysis

• GEOJIT FINANCIAL SERVICES's cash flow from operating activities (CFO) during FY20 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -304 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -821 million on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 244 million from the Rs 113 million net cash flows seen during FY19.

GEOJIT FINANCIAL SERVICES Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	-242	1,368	-
Cash Flow from Investing Activities	Rs m	990	-304	-
Cash Flow from Financing Activities	Rs m	-636	-821	-
Net Cash Flow	Rs m	113	244	115.3%

Current Valuations for GEOJIT FINANCIAL SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.1, an improvement from the EPS of Rs 1.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18.2, stands at 8.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 9.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	12.9	12.8
TTM Earnings per share	Rs	1.3	2.1
Diluted earnings per share	Rs	1.3	2.1
Price to Cash Flow	x	19.4	9.0
TTM P/E ratio	x	26.9	8.5
Price / Book Value ratio	x	3.3	1.4
Market Cap	Rs m	17,181	6,863
Dividends per share (Unadj.)	Rs	1.0	1.5

Ratio Analysis for GEOJIT FINANCIAL SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.1x during FY20, from 2.0x during FY19. 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 25.1x during FY20, from 24.3x during FY19. 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 10.2% during FY20, from 5.7% during FY20. 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 14.5% during FY20, from 11.5% during FY19. 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 6.0% during FY20, from 3.6% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	2.0	2.1
Debtors’ Days	Days	1,550	909
Interest coverage	x	24.3	25.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.6	6.0
Return on equity	%	5.7	10.2
Return on capital employed	%	11.5	14.5

To see how GEOJIT FINANCIAL SERVICES has performed over the last 5 years, please visit here.

GEOJIT FINANCIAL SERVICES Share Price Performance

Over the last one year, GEOJIT FINANCIAL SERVICES share price has moved down from Rs 41.3 to Rs 18.2, registering a loss of Rs 23.1 or around 55.9%.

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for GEOJIT FINANCIAL SERVICES and quarterly results for GEOJIT FINANCIAL SERVICES)

Read: Latest Annual Report Analysis of GEOJIT FINANCIAL SERVICES