EDELWEISS FINANCIAL 2023-24 Annual Report Analysis

Tue, 10 Sep

EDELWEISS FINANCIAL 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.

EDELWEISS FINANCIAL Income Statement Analysis

• Interest income during the year rose 12.0% on a year-on-year (YoY) basis.
• Interest expenses were up by 8.2% YoY during the same period.
• Operating expenses increased by 10.4% YoY during the year.
• The company's net interest income (NII) increased by 13.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 20.2% in FY24 as against 17.1% in FY23.
• Other income declined by 29.3% YoY during the year.
• Net profit for the year increased by 22.2% YoY.
• Net profit margins during the year increased to 4.4% in FY24 from 4.1% in FY23.

EDELWEISS FINANCIAL Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	84,810	94,996	12.0%
Other Income	Rs m	1,558	1,101	-29.3%
Interest Expense	Rs m	25,746	27,865	8.2%
Net Interest Income	Rs m	59,065	67,131	13.7%
Operating Expense	Rs m	56,712	62,597	10.4%
Pre-provision Operating Profit	Rs m	3,911	5,635	44.1%
Provisions & Contingencies	Rs m	873	983	12.6%
Profit before tax	Rs m	3,847	4,374	13.7%
Tax	Rs m	-208	-906	-335.1%
Profit after tax	Rs m	3,442	4,207	22.2%
Minority Interest	Rs m	-614	-1,073	-74.8%
Net Interest Margin	%	17.1	20.2
Net profit margin	%	4.1	4.4

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EDELWEISS FINANCIAL 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 148.0 bn as compared to Rs 173.5 bn during FY23, a fall of 14.7%.
• Cost of deposits for EDELWEISS FINANCIAL fell 92.5% and stood at 667.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 184.9 bn during the year from Rs 171.6 bn in FY23.
• Borrowing stood at Rs 39.2 bn, a growth of 3.4% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 413.7 bn as against Rs 428.5 bn during FY23, thereby witnessing a fall of 3.5%.

EDELWEISS FINANCIAL Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	66,742	47,249	-29.2%
Advances	Rs m	173,536	148,040	-14.7%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	8912.0	667.0
Investments	Rs m	171,622	184,915	7.7%
Borrowings	Rs m	37,908	39,202	3.4%
Total Assets	Rs m	428,527	413,731	-3.5%

Current Valuations for EDELWEISS FINANCIAL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.7, a decline from the EPS of Rs 3.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 115.9, stands at 12.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.3 times, while the price to income ratio stands at 0.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	94.4	105.7
Earnings per share (Unadj.)	Rs	3.8	4.7
Diluted earnings per share	Rs	3.6	4.5
Avg P/E ratio	Rs	9.8	12.7
Avg P/ABV ratio	Rs	0.8	2.3
Avg Market Cap	Rs	33,700	53,436
Dividends per share (Unadj.)	Rs	1.50	1.50

Ratio Analysis for EDELWEISS FINANCIAL

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio deteriorated and stood at 14,804,032.0x during FY24, from 17,353,628.0x 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 0.83x during FY24, from 0.57x 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): EDELWEISS FINANCIAL's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2024 as compared to 0.0% 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 improved and stood at 8.9% during FY24, from 5.2% 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 improved and stood at 1.02% during FY24, from 0.80% 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 12.05% during FY24, from 10.25% 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. EDELWEISS FINANCIAL's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 0.0% 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 EDELWEISS FINANCIAL was 0.0% in financial year 2024. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	17,353,628.0	14,804,032.0
Debt to Equity Ratio	x	0.6	0.8
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	0.0
Return on Equity	%	5.2	8.9
Return on Assets	%	0.8	1.0
Return on Capital Employed	%	10.3	12.1
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	0.0	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

EDELWEISS FINANCIAL Share Price Performance

Over the last one year, EDELWEISS FINANCIAL share price has moved up from Rs 57.0 to Rs 115.9, registering a gain of Rs 58.9 or around 103.4%.

Overall, the S&P BSE SENSEX is up 24.4% over the year.

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