EMBASSY OFFICE REIT 2023-24 Annual Report Analysis

Mon, 9 Sep

EMBASSY OFFICE REIT has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

EMBASSY OFFICE REIT Income Statement Analysis

• Operating income during the year rose 8.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 78.3% in FY24 as against 77.4% in FY23.
• Depreciation charges decreased by 14.1% and finance costs increased by 11.4% YoY, respectively.
• Other income grew by 391.4% YoY.
• Net profit for the year grew by 90.5% YoY.
• Net profit margins during the year grew from 14.3% in FY23 to 25.3% in FY24.

EMBASSY OFFICE REIT Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	35,319	38,157	8.0%
Other income	Rs m	318	1,562	391.4%
Total Revenues	Rs m	35,637	39,719	11.5%
Gross profit	Rs m	27,345	29,891	9.3%
Depreciation	Rs m	11,284	9,690	-14.1%
Interest	Rs m	9,761	10,872	11.4%
Profit before tax	Rs m	6,618	10,891	64.6%
Tax	Rs m	1,558	1,250	-19.7%
Profit after tax	Rs m	5,060	9,640	90.5%
Gross profit margin	%	77.4	78.3
Effective tax rate	%	23.5	11.5
Net profit margin	%	14.3	25.3

Don't Miss: Key Information for Long-term Investors

EMBASSY OFFICE REIT Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 52 billion as compared to Rs 59 billion in FY23, thereby witnessing an decrease of -11.5%.
• Long-term debt stood at Rs 131 billion as compared to Rs 104 billion during FY23, a growth of 25.6%.
• Current assets rose 16% and stood at Rs 13 billion, while fixed assets rose 2% and stood at Rs 460 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 474 billion as against Rs 464 billion during FY23, thereby witnessing a growth of 2%.

EMBASSY OFFICE REIT Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	243,683	232,742	-4.5
Current Liabilities	Rs m	59,267	52,451	-11.5
Long-term Debt	Rs m	104,207	130,893	25.6
Total Liabilities	Rs m	463,997	473,596	2.1
Current assets	Rs m	11,454	13,281	16.0
Fixed Assets	Rs m	452,543	460,316	1.7
Total Assets	Rs m	463,997	473,596	2.1

EMBASSY OFFICE REIT Cash Flow Statement Analysis

• EMBASSY OFFICE REIT's cash flow from operating activities (CFO) during FY24 stood at Rs 26 billion, an improvement of 1.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -12 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -12 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 2 billion from the Rs 2 billion net cash flows seen during FY23.

EMBASSY OFFICE REIT Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	25,655	25,909	1.0%
Cash Flow from Investing Activities	Rs m	-16,696	-11,797	-
Cash Flow from Financing Activities	Rs m	-8,690	-12,171	-
Net Cash Flow	Rs m	2,289	1,940	-15.2%

Current Valuations for EMBASSY OFFICE REIT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.2, an improvement from the EPS of Rs 5.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 391.0, stands at 52.4 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 9.7 times.
• The company's price to cash flow (P/CF) ratio stood at 16.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	37.3	40.3
TTM Earnings per share	Rs	5.3	10.2
Diluted earnings per share	Rs	5.3	10.2
Price to Cash Flow	x	18.1	16.7
TTM P/E ratio	x	58.5	52.4
Price / Book Value ratio	x	1.4	1.4
Market Cap	Rs m	334,460	322,308
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for EMBASSY OFFICE REIT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.3x during FY24, from 0.2x during FY23. 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 2.0x during FY24, from 1.7x during FY23. 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 4.1% during FY24, from 2.1% during FY24. 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 FY24, from 4.7% during FY23. 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 4.3% during FY24, from 3.2% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	0.2	0.3
Debtors’ Days	Days	5	3
Interest coverage	x	1.7	2.0
Debt to equity ratio	x	0.4	0.6
Return on assets	%	3.2	4.3
Return on equity	%	2.1	4.1
Return on capital employed	%	4.7	6.0

To see how EMBASSY OFFICE REIT has performed over the last 5 years, please visit here.

EMBASSY OFFICE REIT Share Price Performance

Over the last one year, EMBASSY OFFICE REIT share price has moved up from Rs 309.3 to Rs 391.0, registering a gain of Rs 81.7 or around 26.4%.

Overall, the S&P BSE SENSEX is up 24.0% over the year.

(To know more, check out historical annual results for EMBASSY OFFICE REIT and quarterly results for EMBASSY OFFICE REIT)