VERITAS 2022-23 Annual Report Analysis

Wed, 28 Feb

VERITAS 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.

VERITAS Income Statement Analysis

• Operating income during the year rose 1.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 8.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.6% in FY23 as against 7.3% in FY22.
• Depreciation charges increased by 7.7% and finance costs decreased by 9.8% YoY, respectively.
• Other income grew by 112.5% YoY.
• Net profit for the year declined by 9.4% YoY.
• Net profit margins during the year declined from 4.9% in FY22 to 4.4% in FY23.

VERITAS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	21,315	21,632	1.5%
Other income	Rs m	23	49	112.5%
Total Revenues	Rs m	21,338	21,682	1.6%
Gross profit	Rs m	1,546	1,423	-8.0%
Depreciation	Rs m	320	344	7.7%
Interest	Rs m	192	173	-9.8%
Profit before tax	Rs m	1,058	955	-9.7%
Tax	Rs m	11	7	-35.0%
Profit after tax	Rs m	1,047	948	-9.4%
Gross profit margin	%	7.3	6.6
Effective tax rate	%	1.0	0.7
Net profit margin	%	4.9	4.4

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VERITAS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 11 billion as compared to Rs 13 billion in FY22, thereby witnessing an decrease of -11.5%.
• Long-term debt down at Rs 363 million as compared to Rs 1 billion during FY22, a fall of 72.3%.
• Current assets rose 2% and stood at Rs 17 billion, while fixed assets rose 3% and stood at Rs 24 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 41 billion as against Rs 40 billion during FY22, thereby witnessing a growth of 3%.

VERITAS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	21,112	23,037	9.1
Current Liabilities	Rs m	12,506	11,062	-11.5
Long-term Debt	Rs m	1,308	363	-72.3
Total Liabilities	Rs m	40,010	41,207	3.0
Current assets	Rs m	16,735	17,149	2.5
Fixed Assets	Rs m	23,276	24,058	3.4
Total Assets	Rs m	40,010	41,207	3.0

VERITAS Cash Flow Statement Analysis

• VERITAS's cash flow from operating activities (CFO) during FY23 stood at Rs 806 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -34 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -759 million, an improvement of 49% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 13 million from the Rs 0 million net cash flows seen during FY22.

VERITAS 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	1,208	806	-33.3%
Cash Flow from Investing Activities	Rs m	270	-34	-
Cash Flow from Financing Activities	Rs m	-1,478	-759	-
Net Cash Flow	Rs m	0	13	-

Current Valuations for VERITAS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 35.4, an decline from the EPS of Rs 39.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 141.5, stands at 4.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.2 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 4.0 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	795.0	806.9
TTM Earnings per share	Rs	39.1	35.4
Diluted earnings per share	Rs	39.1	35.4
Price to Cash Flow	x	2.3	4.0
TTM P/E ratio	x	3.0	4.0
Price / Book Value ratio	x	0.2	0.2
Market Cap	Rs m	3,347	5,197
Dividends per share (Unadj.)	Rs	0.1	0.1

Ratio Analysis for VERITAS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.6x during FY23, from 1.3x 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 improved and stood at 6.5x during FY23, from 6.5x 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 declined and down at 4.1% during FY23, from 5.0% 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 4.8% during FY23, from 5.6% 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 2.7% during FY23, from 3.1% 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	1.3	1.6
Debtors’ Days	Days	2,695	2,783
Interest coverage	x	6.5	6.5
Debt to equity ratio	x	0.1	0.0
Return on assets	%	3.1	2.7
Return on equity	%	5.0	4.1
Return on capital employed	%	5.6	4.8

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

VERITAS Share Price Performance

Over the last one year, VERITAS share price has moved up from Rs 116.0 to Rs 141.5, registering a gain of Rs 25.5 or around 21.9%.

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

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