IIFL WEALTH MANAGEMENT 2020-21 Annual Report Analysis

Wed, 31 Mar

IIFL WEALTH MANAGEMENT has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

IIFL WEALTH MANAGEMENT Income Statement Analysis

• Operating income during the year rose 4.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 49.4% in FY21 as against 45.9% in FY20.
• Depreciation charges increased by 4.7% and finance costs decreased by 17.6% YoY, respectively.
• Other income grew by 54.9% YoY.
• Net profit for the year grew by 83.5% YoY.
• Net profit margins during the year grew from 11.6% in FY20 to 20.4% in FY21.

IIFL WEALTH MANAGEMENT Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	17,392	18,102	4.1%
Other income	Rs m	306	474	54.9%
Total Revenues	Rs m	17,698	18,576	5.0%
Gross profit	Rs m	7,984	8,940	12.0%
Depreciation	Rs m	410	430	4.7%
Interest	Rs m	5,016	4,135	-17.6%
Profit before tax	Rs m	2,864	4,849	69.3%
Tax	Rs m	853	1,157	35.7%
Profit after tax	Rs m	2,012	3,692	83.5%
Gross profit margin	%	45.9	49.4
Effective tax rate	%	29.8	23.9
Net profit margin	%	11.6	20.4

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IIFL WEALTH MANAGEMENT Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 12 billion as compared to Rs 37 billion in FY20, thereby witnessing an decrease of -66.6%.
• Long-term debt down at Rs 42 billion as compared to Rs 60 billion during FY20, a fall of 29.8%.
• Current assets fell 16% and stood at Rs 66 billion, while fixed assets fell 59% and stood at Rs 21 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 87 billion as against Rs 130 billion during FY20, thereby witnessing a fall of 33%.

IIFL WEALTH MANAGEMENT Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	29,660	27,640	-6.8
Current Liabilities	Rs m	37,129	12,392	-66.6
Long-term Debt	Rs m	59,519	41,763	-29.8
Total Liabilities	Rs m	130,210	87,388	-32.9
Current assets	Rs m	78,734	66,453	-15.6
Fixed Assets	Rs m	51,477	20,935	-59.3
Total Assets	Rs m	130,210	87,388	-32.9

IIFL WEALTH MANAGEMENT Cash Flow Statement Analysis

• IIFL WEALTH MANAGEMENT's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 41 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -48 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -3 billion from the Rs 6 billion net cash flows seen during FY20.

IIFL WEALTH MANAGEMENT Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	16,281	4,122	-74.7%
Cash Flow from Investing Activities	Rs m	-33,607	41,289	-
Cash Flow from Financing Activities	Rs m	22,897	-48,356	-
Net Cash Flow	Rs m	5,571	-2,945	-

Current Valuations for IIFL WEALTH MANAGEMENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.0, an improvement from the EPS of Rs 23.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,240.0, stands at 29.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 6.0 times.
• The company's price to cash flow (P/CF) ratio stood at 23.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	199.6	206.1
TTM Earnings per share	Rs	23.1	42.0
Diluted earnings per share	Rs	22.7	41.6
Price to Cash Flow	x	36.2	23.0
TTM P/E ratio	x	43.5	29.8
Price / Book Value ratio	x	3.5	3.4
Market Cap	Rs m	103,204	94,714
Dividends per share (Unadj.)	Rs	20.0	70.0

Ratio Analysis for IIFL WEALTH MANAGEMENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.4x during FY21, from 2.1x during FY20. 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 2.2x during FY21, from 1.6x during FY20. 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 13.4% during FY21, from 6.8% during FY21. 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 12.9% during FY21, from 8.8% during FY20. 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 9.0% during FY21, from 5.4% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	2.1	5.4
Debtors’ Days	Days	76	69
Interest coverage	x	1.6	2.2
Debt to equity ratio	x	2.0	1.5
Return on assets	%	5.4	9.0
Return on equity	%	6.8	13.4
Return on capital employed	%	8.8	12.9

To see how IIFL WEALTH MANAGEMENT has performed over the last 5 years, please visit here.

IIFL WEALTH MANAGEMENT Share Price Performance

Over the last one year, IIFL WEALTH MANAGEMENT share price has moved up from Rs 987.2 to Rs 1,240.0, registering a gain of Rs 252.8 or around 25.6%.

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for IIFL WEALTH MANAGEMENT and quarterly results for IIFL WEALTH MANAGEMENT)

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