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LKP SECURITIES 2022-23 Annual Report Analysis

Wed, 31 May

LKP SECURITIES 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.

LKP SECURITIES Income Statement Analysis

• Operating income during the year fell 17.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 56.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.9% in FY23 as against 22.7% in FY22.
• Depreciation charges increased by 35.3% and finance costs increased by 9.7% YoY, respectively.
• Other income declined by 1.7% YoY.
• Net profit for the year declined by 72.3% YoY.
• Net profit margins during the year declined from 14.4% in FY22 to 4.8% in FY23.

LKP SECURITIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	936	777	-17.0%
Other income	Rs m	15	15	-1.7%
Total Revenues	Rs m	951	792	-16.7%
Gross profit	Rs m	213	93	-56.4%
Depreciation	Rs m	21	29	35.3%
Interest	Rs m	24	26	9.7%
Profit before tax	Rs m	183	52	-71.3%
Tax	Rs m	48	15	-68.6%
Profit after tax	Rs m	135	37	-72.3%
Gross profit margin	%	22.7	11.9
Effective tax rate	%	26.2	28.7
Net profit margin	%	14.4	4.8

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LKP SECURITIES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 966 million as compared to Rs 2 billion in FY22, thereby witnessing an decrease of -35.7%.
• Current assets fell 28% and stood at Rs 1 billion, while fixed assets rose 47% and stood at Rs 250 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2 billion as against Rs 2 billion during FY22, thereby witnessing a fall of 21%.

LKP SECURITIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	573	648	13.0
Current Liabilities	Rs m	1,501	966	-35.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	2,098	1,656	-21.1
Current assets	Rs m	1,861	1,338	-28.1
Fixed Assets	Rs m	170	250	47.0
Total Assets	Rs m	2,098	1,656	-21.1

LKP SECURITIES Cash Flow Statement Analysis

• LKP SECURITIES's cash flow from operating activities (CFO) during FY23 stood at Rs -721 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 124 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -10 million, an improvement of 80% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -270 million from the Rs 642 million net cash flows seen during FY22.

LKP SECURITIES 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	279	-721	-
Cash Flow from Investing Activities	Rs m	-1	124	-
Cash Flow from Financing Activities	Rs m	-50	-10	-
Net Cash Flow	Rs m	642	-270	-

Current Valuations for LKP SECURITIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.5, an decline from the EPS of Rs 1.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.3, stands at 25.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 17.6 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	12.5	9.9
TTM Earnings per share	Rs	1.8	0.5
Diluted earnings per share	Rs	1.7	0.5
Price to Cash Flow	x	7.0	17.6
TTM P/E ratio	x	8.0	25.7
Price / Book Value ratio	x	1.9	1.8
Market Cap	Rs m	1,106	1,162
Dividends per share (Unadj.)	Rs	0.3	0.1

Ratio Analysis for LKP SECURITIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.2x 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 3.0x during FY23, from 8.6x 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 declined and down at 5.8% during FY23, from 23.5% 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 12.1% during FY23, from 36.0% 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 3.8% during FY23, from 7.6% 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	1.2	1.4
Debtors’ Days	Days	839	952
Interest coverage	x	8.6	3.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.6	3.8
Return on equity	%	23.5	5.8
Return on capital employed	%	36.0	12.1

To see how LKP SECURITIES has performed over the last 5 years, please visit here.

LKP SECURITIES Share Price Performance

Over the last one year, LKP SECURITIES share price has moved down from Rs 14.9 to Rs 12.3, registering a loss of Rs 2.6 or around 17.4%.

Overall, the S&P BSE SENSEX is up 15.6% over the year.

(To know more, check out historical annual results for LKP SECURITIES and quarterly results for LKP SECURITIES)