MAX FINANCIAL SERVICES 2022-23 Annual Report Analysis

Tue, 15 Aug

MAX FINANCIAL SERVICES 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.

MAX FINANCIAL SERVICES Income Statement Analysis

• Operating income during the year rose 0.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 18.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 2.3% in FY23 as against 1.9% in FY22.
• Depreciation charges decreased by 1.4% and finance costs decreased by 14.6% YoY, respectively.
• Other income grew by 42.2% YoY.
• Net profit for the year grew by 41.9% YoY.
• Net profit margins during the year grew from 1.0% in FY22 to 1.4% in FY23.

MAX FINANCIAL SERVICES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	311,565	313,840	0.7%
Other income	Rs m	336	479	42.2%
Total Revenues	Rs m	311,901	314,319	0.8%
Gross profit	Rs m	6,022	7,144	18.6%
Depreciation	Rs m	1,802	1,778	-1.4%
Interest	Rs m	670	572	-14.6%
Profit before tax	Rs m	3,887	5,272	35.6%
Tax	Rs m	703	753	7.2%
Profit after tax	Rs m	3,184	4,519	41.9%
Gross profit margin	%	1.9	2.3
Effective tax rate	%	18.1	14.3
Net profit margin	%	1.0	1.4

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

MAX FINANCIAL SERVICES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1,270 billion as compared to Rs 1,125 billion in FY22, thereby witnessing an increase of 12.9%.
• Long-term debt stood at Rs 5 billion as compared to Rs 5 billion during FY22, a growth of 0.0%.
• Current assets rose 12% and stood at Rs 1,288 billion, while fixed assets rose 14% and stood at Rs 30 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,318 billion as against Rs 1,177 billion during FY22, thereby witnessing a growth of 12%.

MAX FINANCIAL SERVICES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	39,346	35,146	-10.7
Current Liabilities	Rs m	1,124,850	1,270,387	12.9
Long-term Debt	Rs m	5,206	5,207	0.0
Total Liabilities	Rs m	1,177,473	1,318,199	12.0
Current assets	Rs m	1,150,942	1,287,893	11.9
Fixed Assets	Rs m	26,531	30,306	14.2
Total Assets	Rs m	1,177,473	1,318,199	12.0

MAX FINANCIAL SERVICES Cash Flow Statement Analysis

• MAX FINANCIAL SERVICES's cash flow from operating activities (CFO) during FY23 stood at Rs 99 billion, an improvement of 16.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -92 billion, an improvement of 4.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 5 billion from the Rs 485 million net cash flows seen during FY22.

MAX FINANCIAL SERVICES 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	84,959	99,223	16.8%
Cash Flow from Investing Activities	Rs m	-88,354	-92,276	-
Cash Flow from Financing Activities	Rs m	3,880	-2,328	-
Net Cash Flow	Rs m	485	4,619	853.2%

Current Valuations for MAX FINANCIAL SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.2, an improvement from the EPS of Rs 9.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 844.8, stands at 60.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.3 times, while the price to sales ratio stands at 0.9 times.
• The company's price to cash flow (P/CF) ratio stood at 40.6 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	902.8	913.4
TTM Earnings per share	Rs	9.2	13.2
Diluted earnings per share	Rs	9.2	13.1
Price to Cash Flow	x	52.2	40.6
TTM P/E ratio	x	81.7	60.2
Price / Book Value ratio	x	8.1	7.3
Market Cap	Rs m	318,886	255,835
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for MAX FINANCIAL SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.0x during FY23, from 1.0x 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 improved and stood at 10.2x during FY23, from 6.8x 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 improved and stood at 12.9% during FY23, from 8.1% 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 improved and stood at 14.5% during FY23, from 10.2% 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 0.4% during FY23, from 0.3% 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	1.0	1.0
Debtors’ Days	Days	79	79
Interest coverage	x	6.8	10.2
Debt to equity ratio	x	0.1	0.1
Return on assets	%	0.3	0.4
Return on equity	%	8.1	12.9
Return on capital employed	%	10.2	14.5

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

MAX FINANCIAL SERVICES Share Price Performance

Over the last one year, MAX FINANCIAL SERVICES share price has moved up from Rs 791.7 to Rs 844.8, registering a gain of Rs 53.1 or around 6.7%.

Overall, the S&P BSE SENSEX is up 10.2% over the year.

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