ZEN TECHNOLOGIES 2022-23 Annual Report Analysis

Tue, 12 Sep

ZEN TECHNOLOGIES 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.

ZEN TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 213.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1639.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 34.1% in FY23 as against 6.1% in FY22.
• Depreciation charges increased by 25.3% and finance costs increased by 166.2% YoY, respectively.
• Other income grew by 34.8% YoY.
• Net profit for the year grew by 1814.5% YoY.
• Net profit margins during the year grew from 3.7% in FY22 to 22.8% in FY23.

ZEN TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	698	2,188	213.7%
Other income	Rs m	54	72	34.8%
Total Revenues	Rs m	751	2,261	200.9%
Gross profit	Rs m	43	746	1,639.6%
Depreciation	Rs m	48	61	25.3%
Interest	Rs m	15	41	166.2%
Profit before tax	Rs m	33	717	2,071.6%
Tax	Rs m	7	218	3,035.2%
Profit after tax	Rs m	26	500	1,814.5%
Gross profit margin	%	6.1	34.1
Effective tax rate	%	21.0	30.3
Net profit margin	%	3.7	22.8

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ZEN TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1 billion as compared to Rs 720 million in FY22, thereby witnessing an increase of 94.8%.
• Current assets rose 37% and stood at Rs 4 billion, while fixed assets rose 13% and stood at Rs 831 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 5 billion as against Rs 3 billion during FY22, thereby witnessing a growth of 32%.

ZEN TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,805	3,233	15.3
Current Liabilities	Rs m	720	1,402	94.8
Long-term Debt	Rs m	42	0	-100.0
Total Liabilities	Rs m	3,487	4,596	31.8
Current assets	Rs m	2,751	3,765	36.9
Fixed Assets	Rs m	737	831	12.8
Total Assets	Rs m	3,487	4,596	31.8

ZEN TECHNOLOGIES Cash Flow Statement Analysis

• ZEN TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -37 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -219 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 908 million from the Rs 1 million net cash flows seen during FY22.

ZEN TECHNOLOGIES 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	-443	1,164	-
Cash Flow from Investing Activities	Rs m	-436	-37	-
Cash Flow from Financing Activities	Rs m	880	-219	-
Net Cash Flow	Rs m	1	908	76,192.4%

Current Valuations for ZEN TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.3, 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 783.7, stands at 72.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 20.4 times, while the price to sales ratio stands at 28.5 times.
• The company's price to cash flow (P/CF) ratio stood at 33.8 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	8.8	27.5
TTM Earnings per share	Rs	0.3	6.3
Diluted earnings per share	Rs	0.3	5.9
Price to Cash Flow	x	231.2	33.8
TTM P/E ratio	x	659.3	72.1
Price / Book Value ratio	x	4.6	5.9
Market Cap	Rs m	12,829	18,927
Dividends per share (Unadj.)	Rs	0.1	0.2

Ratio Analysis for ZEN TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY23, from 3.8x 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 18.6x during FY23, from 3.2x 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 15.5% during FY23, from 0.9% 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 23.4% during FY23, from 1.7% 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 improved and stood at 11.8% during FY23, from 1.2% 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	3.8	2.7
Debtors’ Days	Days	1,658	1,424
Interest coverage	x	3.2	18.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	1.2	11.8
Return on equity	%	0.9	15.5
Return on capital employed	%	1.7	23.4

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

ZEN TECHNOLOGIES Share Price Performance

Over the last one year, ZEN TECHNOLOGIES share price has moved up from Rs 214.4 to Rs 783.7, registering a gain of Rs 569.4 or around 265.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 32,978.4 (up 0.2%). Over the last one year it has moved up from 29,667.4 to 32,978.4, a gain of 3,311 points (up 11.2%).

Overall, the S&P BSE SENSEX is up 12.5% over the year.

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