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MONARCH NETWORTH CAPITAL 2021-22 Annual Report Analysis

Thu, 31 Mar

MONARCH NETWORTH CAPITAL has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

MONARCH NETWORTH CAPITAL Income Statement Analysis

• Operating income during the year rose 41.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 74.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 44.9% in FY22 as against 36.3% in FY21.
• Depreciation charges increased by 8.8% and finance costs decreased by 12.8% YoY, respectively.
• Other income grew by 1040.8% YoY.
• Net profit for the year grew by 122.0% YoY.
• Net profit margins during the year grew from 23.8% in FY21 to 37.4% in FY22.

MONARCH NETWORTH CAPITAL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,023	1,445	41.2%
Other income	Rs m	9	103	1,040.8%
Total Revenues	Rs m	1,032	1,547	49.9%
Gross profit	Rs m	372	649	74.6%
Depreciation	Rs m	9	10	8.8%
Interest	Rs m	24	20	-12.8%
Profit before tax	Rs m	348	722	107.2%
Tax	Rs m	105	181	72.8%
Profit after tax	Rs m	243	541	122.0%
Gross profit margin	%	36.3	44.9
Effective tax rate	%	30.1	25.1
Net profit margin	%	23.8	37.4

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MONARCH NETWORTH CAPITAL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 5 billion as compared to Rs 3 billion in FY21, thereby witnessing an increase of 59.8%.
• Long-term debt down at Rs 25 million as compared to Rs 28 million during FY21, a fall of 8.6%.
• Current assets rose 63% and stood at Rs 6 billion, while fixed assets rose 7% and stood at Rs 330 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 6 billion as against Rs 4 billion during FY21, thereby witnessing a growth of 58%.

MONARCH NETWORTH CAPITAL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,078	1,626	50.8
Current Liabilities	Rs m	2,972	4,749	59.8
Long-term Debt	Rs m	28	25	-8.6
Total Liabilities	Rs m	4,079	6,462	58.4
Current assets	Rs m	3,772	6,132	62.6
Fixed Assets	Rs m	307	330	7.4
Total Assets	Rs m	4,079	6,462	58.4

MONARCH NETWORTH CAPITAL Cash Flow Statement Analysis

• MONARCH NETWORTH CAPITAL's cash flow from operating activities (CFO) during FY22 stood at Rs 451 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -3 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 137 million, an improvement of 232% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 584 million from the Rs -1 billion net cash flows seen during FY21.

MONARCH NETWORTH CAPITAL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	-2,350	451	-
Cash Flow from Investing Activities	Rs m	1,260	-3	-
Cash Flow from Financing Activities	Rs m	-104	137	-
Net Cash Flow	Rs m	-1,194	584	-

Current Valuations for MONARCH NETWORTH CAPITAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.4, an improvement from the EPS of Rs 7.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 192.4, stands at 12.1 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 4.1 times.
• The company's price to cash flow (P/CF) ratio stood at 7.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	33.0	46.5
TTM Earnings per share	Rs	7.8	17.4
Diluted earnings per share	Rs	7.2	16.0
Price to Cash Flow	x	8.4	7.6
TTM P/E ratio	x	8.8	12.1
Price / Book Value ratio	x	1.2	2.6
Market Cap	Rs m	1,315	4,191
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for MONARCH NETWORTH CAPITAL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY22, from 1.3x during FY21. 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 36.2x during FY22, from 15.8x during FY21. 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 33.3% during FY22, from 22.6% during FY22. 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 44.9% during FY22, from 33.6% during FY21. 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 8.7% during FY22, from 6.5% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.3	1.3
Debtors’ Days	Days	1,120	1,069
Interest coverage	x	15.8	36.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.5	8.7
Return on equity	%	22.6	33.3
Return on capital employed	%	33.6	44.9

To see how MONARCH NETWORTH CAPITAL has performed over the last 5 years, please visit here.

MONARCH NETWORTH CAPITAL Share Price Performance

Over the last one year, MONARCH NETWORTH CAPITAL share price has moved up from Rs 63.0 to Rs 192.4, registering a gain of Rs 129.4 or around 205.5%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

(To know more, check out historical annual results for MONARCH NETWORTH CAPITAL and quarterly results for MONARCH NETWORTH CAPITAL)