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AVANTEL 2023-24 Annual Report Analysis

Thu, 9 May

AVANTEL has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

AVANTEL Income Statement Analysis

• Operating income during the year rose 44.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 74.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 41.4% in FY24 as against 34.3% in FY23.
• Depreciation charges increased by 30.0% and finance costs decreased by 14.1% YoY, respectively.
• Other income grew by 196.9% YoY.
• Net profit for the year grew by 95.8% YoY.
• Net profit margins during the year grew from 19.7% in FY23 to 26.6% in FY24.

AVANTEL Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,364	1,976	44.9%
Other income	Rs m	5	14	196.9%
Total Revenues	Rs m	1,369	1,990	45.4%
Gross profit	Rs m	468	818	74.7%
Depreciation	Rs m	58	75	30.0%
Interest	Rs m	49	42	-14.1%
Profit before tax	Rs m	367	715	95.1%
Tax	Rs m	98	190	93.2%
Profit after tax	Rs m	268	526	95.8%
Gross profit margin	%	34.3	41.4
Effective tax rate	%	26.8	26.5
Net profit margin	%	19.7	26.6

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AVANTEL Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 451 million as compared to Rs 385 million in FY23, thereby witnessing an increase of 17.3%.
• Current assets rose 36% and stood at Rs 1 billion, while fixed assets rose 66% and stood at Rs 693 million in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 2 billion as against Rs 1 billion during FY23, thereby witnessing a growth of 44%.

AVANTEL Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,075	1,580	47.0
Current Liabilities	Rs m	385	451	17.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,495	2,156	44.2
Current assets	Rs m	1,078	1,463	35.8
Fixed Assets	Rs m	417	693	66.1
Total Assets	Rs m	1,495	2,156	44.2

AVANTEL Cash Flow Statement Analysis

• AVANTEL's cash flow from operating activities (CFO) during FY24 stood at Rs 652 million, an improvement of 3,793.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -416 million, an improvement of 309.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -227 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 9 million from the Rs -3 million net cash flows seen during FY23.

AVANTEL Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	17	652	3,793.6%
Cash Flow from Investing Activities	Rs m	-102	-416	-
Cash Flow from Financing Activities	Rs m	82	-227	-
Net Cash Flow	Rs m	-3	9	-

Current Valuations for AVANTEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.2, an decline from the EPS of Rs 16.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 108.9, stands at 50.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.8 times, while the price to sales ratio stands at 13.4 times.
• The company's price to cash flow (P/CF) ratio stood at 33.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	84.1	8.1
TTM Earnings per share	Rs	16.5	2.2
Diluted earnings per share	Rs	1.1	2.2
Price to Cash Flow	x	20.1	33.9
TTM P/E ratio	x	24.4	50.4
Price / Book Value ratio	x	5.4	12.9
Market Cap	Rs m	5,765	20,349
Dividends per share (Unadj.)	Rs	0.2	0.2

Ratio Analysis for AVANTEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY24, from 2.8x during FY23. 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 18.1x during FY24, from 8.5x during FY23. 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 33.3% during FY24, from 25.0% during FY24. 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 47.9% during FY24, from 38.6% during FY23. 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 26.3% during FY24, from 21.2% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.8	3.2
Debtors’ Days	Days	1,066	1,185
Interest coverage	x	8.5	18.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	21.2	26.3
Return on equity	%	25.0	33.3
Return on capital employed	%	38.6	47.9

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

AVANTEL Share Price Performance

Over the last one year, AVANTEL share price has moved up from Rs 31.2 to Rs 108.9, registering a gain of Rs 77.7 or around 248.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 34,114.4 (down 0.6%). Over the last one year it has moved up from 27,964.6 to 34,114.4, a gain of 6,150 points (up 22.0%).

Overall, the S&P BSE SENSEX is up 18.9% over the year.

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