WEP SOLUTIONS 2021-22 Annual Report Analysis

Wed, 24 Aug

WEP SOLUTIONS 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.

WEP SOLUTIONS Income Statement Analysis

• Operating income during the year rose 71.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.8% in FY22 as against 16.8% in FY21.
• Depreciation charges decreased by 17.2% and finance costs decreased by 29.1% YoY, respectively.
• Other income grew by 98.0% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year grew from 1.7% in FY21 to 2.3% in FY22.

WEP SOLUTIONS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	645	1,108	71.8%
Other income	Rs m	5	9	98.0%
Total Revenues	Rs m	649	1,117	72.0%
Gross profit	Rs m	108	130	20.3%
Depreciation	Rs m	110	91	-17.2%
Interest	Rs m	15	11	-29.1%
Profit before tax	Rs m	-12	38	NA
Tax	Rs m	-1	12	NA
Profit after tax	Rs m	-11	26	NA
Gross profit margin	%	16.8	11.8
Effective tax rate	%	10.3	30.9
Net profit margin	%	-1.7	2.3

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WEP SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 217 million as compared to Rs 241 million in FY21, thereby witnessing an decrease of -9.9%.
• Long-term debt down at Rs 20 million as compared to Rs 53 million during FY21, a fall of 62.4%.
• Current assets rose 20% and stood at Rs 426 million, while fixed assets rose 2% and stood at Rs 326 million in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 752 million as against Rs 676 million during FY21, thereby witnessing a growth of 11%.

WEP SOLUTIONS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	393	521	32.8
Current Liabilities	Rs m	241	217	-9.9
Long-term Debt	Rs m	53	20	-62.4
Total Liabilities	Rs m	676	752	11.3
Current assets	Rs m	355	426	20.1
Fixed Assets	Rs m	321	326	1.6
Total Assets	Rs m	676	752	11.3

WEP SOLUTIONS Cash Flow Statement Analysis

• WEP SOLUTIONS's cash flow from operating activities (CFO) during FY22 stood at Rs 116 million, an improvement of 42.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -94 million, an improvement of 85.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 3 million, an improvement of 110% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 26 million from the Rs 4 million net cash flows seen during FY21.

WEP SOLUTIONS 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	82	116	42.7%
Cash Flow from Investing Activities	Rs m	-51	-94	-
Cash Flow from Financing Activities	Rs m	-27	3	-
Net Cash Flow	Rs m	4	26	515.3%

Current Valuations for WEP SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.7, an improvement from the EPS of Rs -0.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 22.6, stands at 26.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 7.6 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	24.5	30.6
TTM Earnings per share	Rs	-0.4	0.7
Diluted earnings per share	Rs	-0.3	0.7
Price to Cash Flow	x	5.3	7.6
TTM P/E ratio	x	-47.0	26.0
Price / Book Value ratio	x	1.4	1.7
Market Cap	Rs m	532	890
Dividends per share (Unadj.)	Rs	0.0	0.5

Ratio Analysis for WEP SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY22, from 1.5x 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 4.4x during FY22, from 0.2x 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 5.0% during FY22, from -2.8% 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 9.0% during FY22, from 0.7% 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 4.9% during FY22, from 0.6% 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	1.5	2.0
Debtors’ Days	Days	73,754,667	437
Interest coverage	x	0.2	4.4
Debt to equity ratio	x	0.1	0.0
Return on assets	%	0.6	4.9
Return on equity	%	-2.8	5.0
Return on capital employed	%	0.7	9.0

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

WEP SOLUTIONS Share Price Performance

Over the last one year, WEP SOLUTIONS share price has moved up from Rs 19.0 to Rs 22.6, registering a gain of Rs 3.6 or around 18.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,452.1 (down 0.2%). Over the last one year it has moved down from 33,685.3 to 29,452.1, a loss of 4,233 points (down 12.6%).

Overall, the S&P BSE SENSEX is up 6.4% over the year.

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