EFC 2023-24 Annual Report Analysis

Tue, 5 Nov

EFC 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.

EFC Income Statement Analysis

• Operating income during the year rose 297.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 213.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 42.3% in FY24 as against 53.7% in FY23.
• Depreciation charges increased by 119.2% and finance costs increased by 142.4% YoY, respectively.
• Other income grew by 2084.1% YoY.
• Net profit for the year grew by 1538.7% YoY.
• Net profit margins during the year grew from 0.0% in FY23 to 15.4% in FY24.

EFC Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,032	4,103	297.5%
Other income	Rs m	8	185	2,084.1%
Total Revenues	Rs m	1,041	4,288	312.1%
Gross profit	Rs m	554	1,735	213.0%
Depreciation	Rs m	345	756	119.2%
Interest	Rs m	146	353	142.4%
Profit before tax	Rs m	72	810	1,026.3%
Tax	Rs m	33	177	431.2%
Profit after tax	Rs m	39	633	1,538.7%
Gross profit margin	%	53.7	42.3
Effective tax rate	%	46.3	21.8
Net profit margin	%	0.0	15.4

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EFC Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 1 billion as compared to Rs 1 billion in FY23, thereby witnessing an increase of 27.5%.
• Long-term debt stood at Rs 1 billion as compared to Rs 538 million during FY23, a growth of 107.7%.
• Current assets rose 375% and stood at Rs 5 billion, while fixed assets rose 33% and stood at Rs 5 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 10 billion as against Rs 5 billion during FY23, thereby witnessing a growth of 102%.

EFC Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	703	4,268	506.7
Current Liabilities	Rs m	1,055	1,345	27.5
Long-term Debt	Rs m	538	1,117	107.7
Total Liabilities	Rs m	4,744	9,563	101.6
Current assets	Rs m	947	4,503	375.3
Fixed Assets	Rs m	3,797	5,061	33.3
Total Assets	Rs m	4,744	9,563	101.6

EFC Cash Flow Statement Analysis

• EFC's cash flow from operating activities (CFO) during FY24 stood at Rs 291 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -1 billion, an improvement of 210.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 3 billion, an improvement of 197% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 2 billion from the Rs 22 million net cash flows seen during FY23.

EFC 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	-509	291	-
Cash Flow from Investing Activities	Rs m	-355	-1,101	-
Cash Flow from Financing Activities	Rs m	886	2,635	197.5%
Net Cash Flow	Rs m	22	1,824	8,275.7%

Current Valuations for EFC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.7, an improvement from the EPS of Rs 5.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 590.5, stands at 29.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.9 times, while the price to sales ratio stands at 7.2 times.
• The company's price to cash flow (P/CF) ratio stood at 11.5 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	151.1	82.4
TTM Earnings per share	Rs	5.7	12.7
Diluted earnings per share	Rs	0.8	12.7
Price to Cash Flow	x	24.5	11.5
TTM P/E ratio	x	74.1	29.0
Price / Book Value ratio	x	1.1	3.7
Market Cap	Rs m	763	15,960
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for EFC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.3x during FY24, from 0.9x 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 3.3x during FY24, from 1.5x 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 14.8% during FY24, from 5.5% 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 21.6% during FY24, from 17.5% 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 10.3% during FY24, from 3.9% 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	0.9	3.3
Debtors’ Days	Days	516	1,063
Interest coverage	x	1.5	3.3
Debt to equity ratio	x	0.8	0.3
Return on assets	%	3.9	10.3
Return on equity	%	5.5	14.8
Return on capital employed	%	17.5	21.6

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

EFC Share Price Performance

Over the last one year, EFC share price has moved up from Rs 242.0 to Rs 590.5, registering a gain of Rs 348.5 or around 144.0%.

Overall, the S&P BSE SENSEX is up 25.0% over the year.

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