DRC SYSTEMS 2021-22 Annual Report Analysis

Thu, 16 Jun

DRC SYSTEMS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

DRC SYSTEMS Income Statement Analysis

• Operating income during the year fell 5.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.7% in FY22 as against 7.4% in FY21.
• Depreciation charges decreased by 40.3% and finance costs increased by 35.7% YoY, respectively.
• Other income grew by 169.1% YoY.
• Net profit for the year declined by 246.8% YoY.
• Net profit margins during the year grew from 2.3% in FY21 to 3.6% in FY22.

DRC SYSTEMS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	206	195	-5.3%
Other income	Rs m	1	3	169.1%
Total Revenues	Rs m	207	198	-4.3%
Gross profit	Rs m	15	23	48.4%
Depreciation	Rs m	22	13	-40.3%
Interest	Rs m	1	1	35.7%
Profit before tax	Rs m	-6	12	-297.4%
Tax	Rs m	-1	5	-479.7%
Profit after tax	Rs m	-5	7	-246.8%
Gross profit margin	%	7.4	11.7
Effective tax rate	%	21.7	41.8
Net profit margin	%	-2.3	3.6

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DRC SYSTEMS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 20 million as compared to Rs 84 million in FY21, thereby witnessing an decrease of -75.8%.
• Long-term debt stood at Rs 152 million as compared to Rs 0 million during FY21, a fall of 0.0%.
• Current assets fell 32% and stood at Rs 73 million, while fixed assets rose 415% and stood at Rs 174 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 247 million as against Rs 140 million during FY21, thereby witnessing a growth of 76%.

DRC SYSTEMS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	57	64	12.2
Current Liabilities	Rs m	84	20	-75.8
Long-term Debt	Rs m	0	152	0.0
Total Liabilities	Rs m	140	247	76.1
Current assets	Rs m	106	73	-31.7
Fixed Assets	Rs m	34	174	415.2
Total Assets	Rs m	140	247	76.1

DRC SYSTEMS Cash Flow Statement Analysis

• DRC SYSTEMS's cash flow from operating activities (CFO) during FY22 stood at Rs -11 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -152 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 151 million, an improvement of 29,100% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -12 million from the Rs 8 million net cash flows seen during FY21.

DRC SYSTEMS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	8	-11	-
Cash Flow from Investing Activities	Rs m	0	-152	-
Cash Flow from Financing Activities	Rs m	-1	151	-
Net Cash Flow	Rs m	8	-12	-

Current Valuations for DRC SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.2, an improvement from the EPS of Rs -0.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 46.2, stands at 253.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 27.9 times, while the price to sales ratio stands at 9.2 times.
• The company's price to cash flow (P/CF) ratio stood at 451.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	5.3	5.0
TTM Earnings per share	Rs	-0.1	0.2
Diluted earnings per share	Rs	-0.1	0.2
Price to Cash Flow	x	621.3	451.5
TTM P/E ratio	x	-2,247.8	253.3
Price / Book Value ratio	x	138.0	142.9
Market Cap	Rs m	7,872	9,141
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for DRC SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.6x during FY22, from 1.3x during FY21. 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 16.9x during FY22, from -9.9x during FY21. 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 11.0% during FY22, from -8.4% during FY22. 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 6.0% during FY22, from -9.8% during FY21. 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 3.2% during FY22, from -3.0% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.3	3.6
Debtors’ Days	Days	1,439	1,120
Interest coverage	x	-9.9	16.9
Debt to equity ratio	x	0.0	2.4
Return on assets	%	-3.0	3.2
Return on equity	%	-8.4	11.0
Return on capital employed	%	-9.8	6.0

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

DRC SYSTEMS Share Price Performance

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