AAVAS FINANCIERS 2023-24 Annual Report Analysis

Tue, 16 Jul

AAVAS FINANCIERS has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

AAVAS FINANCIERS Income Statement Analysis

• Interest income during the year rose 25.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 40.0% YoY during the same period.
• Operating expenses increased by 20.8% YoY during the year.
• The company's net interest income (NII) increased by 16.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 8.4% in FY24 as against 8.8% in FY23.
• Other income increased by 35.5% YoY during the year.
• Net profit for the year increased by 14.2% YoY.
• Net profit margins during the year declined to 24.3% in FY24 from 26.7% in FY23.

AAVAS FINANCIERS Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	16,088	20,179	25.4%
Other Income	Rs m	23	31	35.5%
Interest Expense	Rs m	5,929	8,302	40.0%
Net Interest Income	Rs m	10,158	11,877	16.9%
Operating Expense	Rs m	4,409	5,327	20.8%
Pre-provision Operating Profit	Rs m	5,771	6,580	14.0%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	5,484	6,254	14.0%
Tax	Rs m	1,188	1,347	13.4%
Profit after tax	Rs m	4,296	4,907	14.2%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	8.8	8.4
Net profit margin	%	26.7	24.3

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AAVAS FINANCIERS Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 0 m as compared to Rs 0 m in FY23, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 140.0 bn as compared to Rs 114.8 bn during FY23, a rise of 22.0%.
• Cost of deposits for AAVAS FINANCIERS rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 1.9 bn during the year from Rs 1.2 bn in FY23.
• Borrowing stood at Rs 35.7 bn, a growth of 32.6% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 165.2 bn as against Rs 134.1 bn during FY23, thereby witnessing a rise of 23.2%.

AAVAS FINANCIERS Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	32,255	37,218	15.4%
Advances	Rs m	114,763	140,044	22.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	1,156	1,874	62.1%
Borrowings	Rs m	26,889	35,661	32.6%
Total Assets	Rs m	134,096	165,195	23.2%

Current Valuations for AAVAS FINANCIERS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.0, an improvement from the EPS of Rs 54.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,785.4, stands at 25.3 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 3.8 times, while the price to income ratio stands at 6.2 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	203.5	255.0
Earnings per share (Unadj.)	Rs	54.3	62.0
Diluted earnings per share	Rs	54.3	62.0
Avg P/E ratio	Rs	38.9	25.3
Avg P/ABV ratio	Rs	3.8	3.8
Avg Market Cap	Rs	166,927	124,208
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for AAVAS FINANCIERS

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 14,004,366.8x during FY24, from 11,476,274.5x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.96x during FY24, from 0.83x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): AAVAS FINANCIERS's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2024 as compared to 47.0% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company deteriorated and stood at 13.2% during FY24, from 13.3% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company deteriorated and stood at 2.97% during FY24, from 3.20% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 9.96% during FY24, from 9.56% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. AAVAS FINANCIERS's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 0.9% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of AAVAS FINANCIERS was 0.0% in financial year 2024. This compared with 0.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	11,476,274.5	14,004,366.8
Debt to Equity Ratio	x	0.8	1.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	47.0	0.0
Return on Equity	%	13.3	13.2
Return on Assets	%	3.2	3.0
Return on Capital Employed	%	9.6	10.0
% of Gross NPAs	%	0.9	0.0
% of Net NPAs	%	0.7	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

AAVAS FINANCIERS Share Price Performance

Over the last one year, AAVAS FINANCIERS share price has moved up from Rs 1,557.3 to Rs 1,785.4, registering a gain of Rs 228.1 or around 14.6%.

Overall, the S&P BSE SENSEX is up 23.4% over the year.

(To know more, you can check out historical annual results for AAVAS FINANCIERS here and quarterly results for AAVAS FINANCIERS here)