CHOLAMANDALAM FINANCIAL HOLDINGS 2022-23 Annual Report Analysis

Mon, 24 Jul

CHOLAMANDALAM FINANCIAL HOLDINGS 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.

CHOLAMANDALAM FINANCIAL HOLDINGS Income Statement Analysis

• Operating income during the year rose 23.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 29.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 52.5% in FY23 as against 50.1% in FY22.
• Depreciation charges increased by 14.2% and finance costs increased by 33.5% YoY, respectively.
• Other income grew by 34.0% YoY.
• Net profit for the year grew by 25.7% YoY.
• Net profit margins during the year grew from 15.3% in FY22 to 15.5% in FY23.

CHOLAMANDALAM FINANCIAL HOLDINGS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	146,436	181,459	23.9%
Other income	Rs m	1,831	2,453	34.0%
Total Revenues	Rs m	148,267	183,912	24.0%
Gross profit	Rs m	73,425	95,332	29.8%
Depreciation	Rs m	1,542	1,761	14.2%
Interest	Rs m	43,279	57,780	33.5%
Profit before tax	Rs m	30,436	38,244	25.7%
Tax	Rs m	8,013	10,061	25.6%
Profit after tax	Rs m	22,422	28,183	25.7%
Gross profit margin	%	50.1	52.5
Effective tax rate	%	26.3	26.3
Net profit margin	%	15.3	15.5

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CHOLAMANDALAM FINANCIAL HOLDINGS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 341 billion as compared to Rs 207 billion in FY22, thereby witnessing an increase of 64.8%.
• Long-term debt stood at Rs 749 billion as compared to Rs 589 billion during FY22, a growth of 27.2%.
• Current assets fell 29% and stood at Rs 53 billion, while fixed assets rose 40% and stood at Rs 1,248 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,301 billion as against Rs 969 billion during FY22, thereby witnessing a growth of 34%.

CHOLAMANDALAM FINANCIAL HOLDINGS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	63,924	75,788	18.6
Current Liabilities	Rs m	206,677	340,662	64.8
Long-term Debt	Rs m	588,928	749,022	27.2
Total Liabilities	Rs m	969,023	1,301,365	34.3
Current assets	Rs m	75,190	53,125	-29.3
Fixed Assets	Rs m	893,832	1,248,015	39.6
Total Assets	Rs m	969,023	1,301,365	34.3

CHOLAMANDALAM FINANCIAL HOLDINGS Cash Flow Statement Analysis

• CHOLAMANDALAM FINANCIAL HOLDINGS's cash flow from operating activities (CFO) during FY23 stood at Rs -293 billion, an improvement of 411.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -3 billion, an improvement of 89.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 278 billion, an improvement of 294% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -17 billion from the Rs 12 billion net cash flows seen during FY22.

CHOLAMANDALAM FINANCIAL HOLDINGS 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	-57,385	-293,287	-
Cash Flow from Investing Activities	Rs m	-1,355	-2,570	-
Cash Flow from Financing Activities	Rs m	70,729	278,398	293.6%
Net Cash Flow	Rs m	11,989	-17,460	-

Current Valuations for CHOLAMANDALAM FINANCIAL HOLDINGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 150.1, an improvement from the EPS of Rs 119.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 920.7, stands at 6.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 3.8 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	780.0	966.3
TTM Earnings per share	Rs	119.4	150.1
Diluted earnings per share	Rs	119.4	150.1
Price to Cash Flow	x	4.8	3.8
TTM P/E ratio	x	5.2	6.1
Price / Book Value ratio	x	1.9	1.5
Market Cap	Rs m	122,789	113,605
Dividends per share (Unadj.)	Rs	0.6	0.6

Ratio Analysis for CHOLAMANDALAM FINANCIAL HOLDINGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.2x during FY23, from 0.4x 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 1.7x during FY23, from 1.7x 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 37.2% during FY23, from 35.1% 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 11.6% during FY23, from 11.3% 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 6.6% during FY23, from 6.8% 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	0.4	0.2
Debtors’ Days	Days	0	0
Interest coverage	x	1.7	1.7
Debt to equity ratio	x	9.2	9.9
Return on assets	%	6.8	6.6
Return on equity	%	35.1	37.2
Return on capital employed	%	11.3	11.6

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

CHOLAMANDALAM FINANCIAL HOLDINGS Share Price Performance

Over the last one year, CHOLAMANDALAM FINANCIAL HOLDINGS share price has moved up from Rs 635.3 to Rs 920.7, registering a gain of Rs 285.4 or around 44.9%.

Overall, the S&P BSE SENSEX is up 19.8% over the year.

(To know more, check out historical annual results for CHOLAMANDALAM FINANCIAL HOLDINGS and quarterly results for CHOLAMANDALAM FINANCIAL HOLDINGS)