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E2E NETWORKS 2022-23 Annual Report Analysis

Mon, 12 Feb

E2E NETWORKS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

E2E NETWORKS Income Statement Analysis

• Operating income during the year rose 27.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 44.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 49.9% in FY23 as against 44.2% in FY22.
• Depreciation charges increased by 12.8% and finance costs increased by 155.4% YoY, respectively.
• Other income grew by 114.1% YoY.
• Net profit for the year grew by 53.6% YoY.
• Net profit margins during the year grew from 12.4% in FY22 to 15.0% in FY23.

E2E NETWORKS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	519	662	27.6%
Other income	Rs m	4	8	114.1%
Total Revenues	Rs m	522	670	28.2%
Gross profit	Rs m	229	331	44.1%
Depreciation	Rs m	178	201	12.8%
Interest	Rs m	2	5	155.4%
Profit before tax	Rs m	53	132	150.4%
Tax	Rs m	-12	33	NA
Profit after tax	Rs m	65	99	53.6%
Gross profit margin	%	44.2	49.9
Effective tax rate	%	-22.0	25.1
Net profit margin	%	12.4	15.0

For Investors: Our Big Prediction

E2E NETWORKS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 141 million as compared to Rs 69 million in FY22, thereby witnessing an increase of 103.9%.
• Long-term debt down at Rs 2 million as compared to Rs 6 million during FY22, a fall of 64.7%.
• Current assets rose 179% and stood at Rs 261 million, while fixed assets rose 9% and stood at Rs 423 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 684 million as against Rs 480 million during FY22, thereby witnessing a growth of 43%.

E2E NETWORKS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	381	485	27.3
Current Liabilities	Rs m	69	141	103.9
Long-term Debt	Rs m	6	2	-64.7
Total Liabilities	Rs m	480	684	42.5
Current assets	Rs m	94	261	179.1
Fixed Assets	Rs m	386	423	9.4
Total Assets	Rs m	480	684	42.5

E2E NETWORKS Cash Flow Statement Analysis

• E2E NETWORKS 's cash flow from operating activities (CFO) during FY23 stood at Rs 355 million, an improvement of 37.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -207 million, an improvement of 7.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -24 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 125 million from the Rs 47 million net cash flows seen during FY22.

E2E NETWORKS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	259	355	37.3%
Cash Flow from Investing Activities	Rs m	-192	-207	-
Cash Flow from Financing Activities	Rs m	-20	-24	-
Net Cash Flow	Rs m	47	125	166.1%

Current Valuations for E2E NETWORKS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.8, an improvement from the EPS of Rs 4.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 0.0, stands at 0.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.0 times, while the price to sales ratio stands at 0.0 times.
• The company's price to cash flow (P/CF) ratio stood at 0.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	35.8	45.7
TTM Earnings per share	Rs	4.5	6.8
Diluted earnings per share	Rs	4.5	6.8
Price to Cash Flow	x	0.0	0.0
TTM P/E ratio	x	0.0	0.0
Price / Book Value ratio	x	3.3	0.0
Market Cap	Rs m	1,267	0
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for E2E NETWORKS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.9x during FY23, from 1.4x during FY22. 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 deteriorated and stood at 28.9x during FY23, from 29.4x during FY22. 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 20.4% during FY23, from 16.9% during FY23. 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 28.1% during FY23, from 14.1% during FY22. 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 15.2% during FY23, from 13.8% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.4	1.9
Debtors’ Days	Days	9	33
Interest coverage	x	29.4	28.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.8	15.2
Return on equity	%	16.9	20.4
Return on capital employed	%	14.1	28.1

To see how E2E NETWORKS has performed over the last 5 years, please visit here.

E2E NETWORKS Share Price Performance

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(To know more, check out historical annual results for E2E NETWORKS and quarterly results for E2E NETWORKS )