SINDHU TRADE LINKS 2021-22 Annual Report Analysis

Thu, 31 Mar

SINDHU TRADE LINKS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during the year 2021-22.

SINDHU TRADE LINKS Income Statement Analysis

• Interest income during the year rose 12.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 10.4% YoY during the same period.
• Operating expenses increased by 4.8% YoY during the year.
• The company's net interest income (NII) increased by 13.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 112.6% in FY22 as against 95.2% in FY21.
• Other income declined by 33.3% YoY during the year.
• Net profit for the year increased by 61.9% YoY.
• Net profit margins during the year increased to -1.0% in FY22 from -2.8% in FY21.

SINDHU TRADE LINKS Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	8,932	10,070	12.7%
Other Income	Rs m	678	452	-33.3%
Interest Expense	Rs m	1,553	1,713	10.4%
Net Interest Income	Rs m	7,379	8,357	13.2%
Operating Expense	Rs m	8,498	8,904	4.8%
Pre-provision Operating Profit	Rs m	-441	-95	78.4%
Provisions & Contingencies	Rs m	828	1,442	74.2%
Profit before tax	Rs m	-670	-387	42.2%
Tax	Rs m	151	140	-7.1%
Profit after tax	Rs m	-252	-96	61.9%
Minority Interest	Rs m	569	432	-24.1%
Net Interest Margin	%	95.2	112.6
Net profit margin	%	-2.8	-1.0

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SINDHU TRADE LINKS Balance Sheet Analysis

• The company's deposits during FY22 stood at Rs 0 m as compared to Rs 0 m in FY21, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY21, a rise of 0.0%.
• Cost of deposits for SINDHU TRADE LINKS rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 7.4 bn during the year from Rs 7.8 bn in FY21.
• Borrowing stood at Rs 835 m, a fall of 71.4% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 46.2 bn as against Rs 44.7 bn during FY21, thereby witnessing a rise of 3.3%.

SINDHU TRADE LINKS Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	11,651	11,628	-0.2%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	7,755	7,422	-4.3%
Borrowings	Rs m	2,920	835	-71.4%
Total Assets	Rs m	44,734	46,215	3.3%

Current Valuations for SINDHU TRADE LINKS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.2, a decline from the EPS of Rs -4.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18.3, stands at -3,001.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.4 times, while the price to income ratio stands at 28.7 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	173.8	19.6
Earnings per share (Unadj.)	Rs	-4.9	-0.2
Diluted earnings per share	Rs	-0.2	-0.1
Avg P/E ratio	Rs	-13.9	-3,001.8
Avg P/ABV ratio	Rs	5.8	2.4
Avg Market Cap	Rs	3,512	288,611
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for SINDHU TRADE LINKS

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY22, from 0.0x during FY21. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio decreased and stood at 0.08x during FY22, from 0.26x during FY21. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): SINDHU TRADE LINKS's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2022 as compared to 0.0% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at -0.8% during FY22, from -2.2% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at -0.21% during FY22, from -0.56% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 5.35% during FY22, from 4.38% during FY21. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. SINDHU TRADE LINKS's gross NPA ratio stood at 0.0% as of 31 March 2022 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of SINDHU TRADE LINKS was 0.0% in financial year 2022. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.3	0.1
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	0.0
Return on Equity	%	-2.2	-0.8
Return on Assets	%	-0.6	-0.2
Return on Capital Employed	%	4.4	5.3
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how SINDHU TRADE LINKS has performed over the last 5 years, please visit here.

SINDHU TRADE LINKS Share Price Performance

Over the last one year, SINDHU TRADE LINKS share price has moved down from Rs 43.7 to Rs 18.3, registering a loss of Rs 25.4 or around 58.2%.

Overall, the S&P BSE SENSEX is up 7.7% over the year.

(To know more, you can check out historical annual results for SINDHU TRADE LINKS here and quarterly results for SINDHU TRADE LINKS here)