EMERALD LEASING 2021-22 Annual Report Analysis

Thu, 31 Mar

EMERALD LEASING has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during the year 2021-22.

EMERALD LEASING Income Statement Analysis

• Interest income during the year rose 55.6% on a year-on-year (YoY) basis.
• Interest expenses were up by 17.6% YoY during the same period.
• Operating expenses increased by 49.4% YoY during the year.
• The company's net interest income (NII) increased by 59.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 2636.1% in FY22 as against 4967.5% in FY21.
• Other income increased by 246.2% YoY during the year.
• Net profit for the year increased by 77.5% YoY.
• Net profit margins during the year increased to 29.2% in FY22 from 25.6% in FY21.

EMERALD LEASING Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	54	85	55.6%
Other Income	Rs m	0	0	246.2%
Interest Expense	Rs m	5	6	17.6%
Net Interest Income	Rs m	50	79	59.2%
Operating Expense	Rs m	30	45	49.4%
Pre-provision Operating Profit	Rs m	19	34	75.8%
Provisions & Contingencies	Rs m	5,174,524	9,747,318	88.4%
Profit before tax	Rs m	19	33	77.0%
Tax	Rs m	5	9	75.5%
Profit after tax	Rs m	14	25	77.5%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	4967.5	2636.1
Net profit margin	%	25.6	29.2

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EMERALD LEASING Balance Sheet Analysis

• The company's deposits during FY22 stood at Rs 0 m as compared to Rs 0 m in FY21, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY21, a rise of 0.0%.
• Cost of deposits for EMERALD LEASING rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 3 m during the year from Rs 0 m in FY21.
• Borrowing stood at Rs 10 m, a growth of 0.0% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 458 m as against Rs 226 m during FY21, thereby witnessing a rise of 102.5%.

EMERALD LEASING Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	159	379	137.9%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	0	3	0.0%
Borrowings	Rs m	0	10	0.0%
Total Assets	Rs m	226	458	102.5%

Current Valuations for EMERALD LEASING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.9, an improvement from the EPS of Rs 1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 16.5, stands at 28.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.3 times, while the price to income ratio stands at 8.2 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	6.0	2.9
Earnings per share (Unadj.)	Rs	1.5	0.9
Diluted earnings per share	Rs	0.5	0.8
Avg P/E ratio	Rs	7.5	28.2
Avg P/ABV ratio	Rs	2.4	1.3
Avg Market Cap	Rs	105	697
Dividends per share (Unadj.)	Rs	0.10	0.10

Ratio Analysis for EMERALD LEASING

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY22, from 0.0x during FY21. 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 0.03x during FY22, from 0.00x during FY21. 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): EMERALD LEASING's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2022 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 deteriorated and stood at 6.5% during FY22, from 8.8% during FY21. 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 5.40% during FY22, from 6.16% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company deteriorated and stood at 12.76% during FY22, from 13.14% during FY21. 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. EMERALD LEASING's gross NPA ratio stood at 0.0% as of 31 March 2022 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 EMERALD LEASING was 0.0% in financial year 2022. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.0	0.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	0.0
Return on Equity	%	8.8	6.5
Return on Assets	%	6.2	5.4
Return on Capital Employed	%	13.1	12.8
% 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 EMERALD LEASING has performed over the last 5 years, please visit here.

EMERALD LEASING Share Price Performance

Over the last one year, EMERALD LEASING share price has moved up from Rs 12.5 to Rs 16.5, registering a gain of Rs 4.0 or around 32.1%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

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