HDFC AMC 2022-23 Annual Report Analysis

Tue, 6 Jun

HDFC AMC 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.

HDFC AMC Income Statement Analysis

• Operating income during the year rose 2.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 74.6% in FY23 as against 75.6% in FY22.
• Depreciation charges decreased by 0.9% and finance costs increased by 12.2% YoY, respectively.
• Other income declined by 0.6% YoY.
• Net profit for the year grew by 2.2% YoY.
• Net profit margins during the year declined from 65.9% in FY22 to 65.7% in FY23.

HDFC AMC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	21,154	21,668	2.4%
Other income	Rs m	3,178	3,159	-0.6%
Total Revenues	Rs m	24,332	24,827	2.0%
Gross profit	Rs m	15,999	16,172	1.1%
Depreciation	Rs m	539	533	-0.9%
Interest	Rs m	86	97	12.2%
Profit before tax	Rs m	18,553	18,701	0.8%
Tax	Rs m	4,622	4,467	-3.3%
Profit after tax	Rs m	13,931	14,234	2.2%
Gross profit margin	%	75.6	74.6
Effective tax rate	%	24.9	23.9
Net profit margin	%	65.9	65.7

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HDFC AMC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 23.4%.
• Current assets rose 13% and stood at Rs 57 billion, while fixed assets fell 2% and stood at Rs 8 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 65 billion as against Rs 59 billion during FY22, thereby witnessing a growth of 11%.

HDFC AMC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	54,574	59,965	9.9
Current Liabilities	Rs m	1,778	2,193	23.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	58,804	65,361	11.2
Current assets	Rs m	50,683	57,383	13.2
Fixed Assets	Rs m	8,121	7,978	-1.8
Total Assets	Rs m	58,804	65,361	11.2

HDFC AMC Cash Flow Statement Analysis

• HDFC AMC's cash flow from operating activities (CFO) during FY23 stood at Rs 11 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 26 million from the Rs 2 million net cash flows seen during FY22.

HDFC AMC 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	12,537	11,494	-8.3%
Cash Flow from Investing Activities	Rs m	-5,080	-2,168	-
Cash Flow from Financing Activities	Rs m	-7,455	-9,299	-
Net Cash Flow	Rs m	2	26	1,263.2%

Current Valuations for HDFC AMC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 66.7, an improvement from the EPS of Rs 65.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,966.0, stands at 29.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.0 times, while the price to sales ratio stands at 19.4 times.
• The company's price to cash flow (P/CF) ratio stood at 29.4 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	99.2	101.5
TTM Earnings per share	Rs	65.3	66.7
Diluted earnings per share	Rs	65.3	66.7
Price to Cash Flow	x	31.7	29.4
TTM P/E ratio	x	32.9	29.5
Price / Book Value ratio	x	10.5	7.3
Market Cap	Rs m	570,627	434,799
Dividends per share (Unadj.)	Rs	42.0	48.0

Ratio Analysis for HDFC AMC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 26.2x during FY23, from 28.5x 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 194.0x during FY23, from 215.7x 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 declined and down at 23.7% during FY23, from 25.5% 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 31.3% during FY23, from 34.2% 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 21.9% during FY23, from 23.8% 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	28.5	26.2
Debtors’ Days	Days	1	3
Interest coverage	x	215.7	194.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	23.8	21.9
Return on equity	%	25.5	23.7
Return on capital employed	%	34.2	31.3

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

HDFC AMC Share Price Performance

Over the last one year, HDFC AMC share price has moved up from Rs 1,857.8 to Rs 1,966.0, registering a gain of Rs 108.2 or around 5.8%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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