NETWORK. 2022-23 Annual Report Analysis

Fri, 31 Mar

NETWORK. 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.

NETWORK. Income Statement Analysis

• Operating income during the year rose 134.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 179.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 5.5% in FY23 as against 4.7% in FY22.
• Depreciation charges increased by 486.8% increased by 0.0% YoY, respectively.
• Other income grew by 333.5% YoY.
• Net profit for the year grew by 124.8% YoY.
• Net profit margins during the year declined from 4.9% in FY22 to 4.8% in FY23.

NETWORK. Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	555	1,300	134.2%
Other income	Rs m	2	9	333.5%
Total Revenues	Rs m	557	1,309	135.0%
Gross profit	Rs m	26	72	179.2%
Depreciation	Rs m	0	2	486.8%
Interest	Rs m	0	0	0.0%
Profit before tax	Rs m	27	79	186.3%
Tax	Rs m	0	17	NA
Profit after tax	Rs m	27	62	124.8%
Gross profit margin	%	4.7	5.5
Effective tax rate	%	-0.1	21.4
Net profit margin	%	4.9	4.8

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NETWORK. Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 68 million as compared to Rs 101 million in FY22, thereby witnessing an decrease of -32.4%.
• Current assets rose 233% and stood at Rs 733 million, while fixed assets fell 71% and stood at Rs 14 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 746 million as against Rs 267 million during FY22, thereby witnessing a growth of 179%.

NETWORK. Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	167	678	307.4
Current Liabilities	Rs m	101	68	-32.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	267	746	179.4
Current assets	Rs m	220	733	233.1
Fixed Assets	Rs m	47	14	-71.0
Total Assets	Rs m	267	746	179.4

NETWORK. Cash Flow Statement Analysis

• NETWORK.'s cash flow from operating activities (CFO) during FY23 stood at Rs -165 million, an improvement of 82.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 0 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 375 million, an improvement of 126% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 210 million from the Rs 45 million net cash flows seen during FY22.

NETWORK. 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	-90	-165	-
Cash Flow from Investing Activities	Rs m	-30	0	-
Cash Flow from Financing Activities	Rs m	166	375	126.1%
Net Cash Flow	Rs m	45	210	361.6%

Current Valuations for NETWORK.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.3, an improvement from the EPS of Rs 0.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.9, stands at 41.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.7 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 64.8 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	5.6	6.6
TTM Earnings per share	Rs	0.3	0.3
Diluted earnings per share	Rs	0.1	0.3
Price to Cash Flow	x	110.6	64.8
TTM P/E ratio	x	126.5	41.0
Price / Book Value ratio	x	7.5	6.1
Market Cap	Rs m	1,249	4,149
Dividends per share (Unadj.)	Rs	0.0	0.2

Ratio Analysis for NETWORK.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 10.8x during FY23, from 2.2x during FY22. The current ratio measures the company's ability to pay short-term and long-term obligations.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 9.1% during FY23, from 16.5% 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 11.6% during FY23, from 16.5% 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 8.3% during FY23, from 10.3% 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	2.2	10.8
Debtors’ Days	Days	476	467
Interest coverage	x	0.0	0.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.3	8.3
Return on equity	%	16.5	9.1
Return on capital employed	%	16.5	11.6

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

NETWORK. Share Price Performance

Over the last one year, NETWORK. share price has moved down from Rs 15.7 to Rs 12.9, registering a loss of Rs 2.8 or around 17.6%.

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for NETWORK. and quarterly results for NETWORK.)