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NAZARA TECHNOLOGIES 2022-23 Annual Report Analysis

Thu, 21 Sep

NAZARA TECHNOLOGIES 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.

NAZARA TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 75.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 19.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.4% in FY23 as against 13.8% in FY22.
• Depreciation charges increased by 46.4% and finance costs increased by 391.7% YoY, respectively.
• Other income grew by 105.4% YoY.
• Net profit for the year grew by 25.0% YoY.
• Net profit margins during the year declined from 8.2% in FY22 to 5.8% in FY23.

NAZARA TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	6,217	10,910	75.5%
Other income	Rs m	241	495	105.4%
Total Revenues	Rs m	6,458	11,405	76.6%
Gross profit	Rs m	860	1,023	19.0%
Depreciation	Rs m	390	571	46.4%
Interest	Rs m	12	59	391.7%
Profit before tax	Rs m	699	888	27.0%
Tax	Rs m	192	254	32.3%
Profit after tax	Rs m	507	634	25.0%
Gross profit margin	%	13.8	9.4
Effective tax rate	%	27.5	28.6
Net profit margin	%	8.2	5.8

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NAZARA TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 3 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 93.2%.
• Current assets rose 9% and stood at Rs 10 billion, while fixed assets rose 43% and stood at Rs 7 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 17 billion as against Rs 14 billion during FY22, thereby witnessing a growth of 21%.

NAZARA TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	10,292	11,049	7.4
Current Liabilities	Rs m	1,731	3,344	93.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	14,039	16,981	21.0
Current assets	Rs m	9,154	9,974	9.0
Fixed Assets	Rs m	4,885	7,007	43.4
Total Assets	Rs m	14,039	16,981	21.0

NAZARA TECHNOLOGIES Cash Flow Statement Analysis

• NAZARA TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 81 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -952 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 148 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -660 million from the Rs 681 million net cash flows seen during FY22.

NAZARA TECHNOLOGIES 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	621	81	-87.0%
Cash Flow from Investing Activities	Rs m	-3,336	-952	-
Cash Flow from Financing Activities	Rs m	3,348	148	-95.6%
Net Cash Flow	Rs m	681	-660	-

Current Valuations for NAZARA TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.6, an decline from the EPS of Rs 15.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 855.2, stands at 78.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.1 times, while the price to sales ratio stands at 5.2 times.
• The company's price to cash flow (P/CF) ratio stood at 37.5 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	190.6	164.9
TTM Earnings per share	Rs	15.5	9.6
Diluted earnings per share	Rs	7.7	9.6
Price to Cash Flow	x	60.4	37.5
TTM P/E ratio	x	105.6	78.5
Price / Book Value ratio	x	3.8	4.1
Market Cap	Rs m	38,876	45,212
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for NAZARA TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY23, from 5.3x 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 16.1x during FY23, from 59.3x 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 5.7% during FY23, from 4.9% 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 8.6% during FY23, from 6.9% 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 4.1% during FY23, from 3.7% 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	5.3	3.0
Debtors’ Days	Days	50	51
Interest coverage	x	59.3	16.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	3.7	4.1
Return on equity	%	4.9	5.7
Return on capital employed	%	6.9	8.6

To see how NAZARA TECHNOLOGIES has performed over the last 5 years, please visit here.

NAZARA TECHNOLOGIES Share Price Performance

Over the last one year, NAZARA TECHNOLOGIES share price has moved up from Rs 734.9 to Rs 855.2, registering a gain of Rs 120.3 or around 16.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 33,044.9 (down 0.0%). Over the last one year it has moved up from 27,354.3 to 33,044.9, a gain of 5,691 points (up 20.8%).

Overall, the S&P BSE SENSEX is up 10.9% over the year.

(To know more, check out historical annual results for NAZARA TECHNOLOGIES and quarterly results for NAZARA TECHNOLOGIES)