FIRSTSOURCE SOLUTIONS 2023-24 Annual Report Analysis

Tue, 2 Jul

FIRSTSOURCE SOLUTIONS 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.

FIRSTSOURCE SOLUTIONS Income Statement Analysis

• Operating income during the year rose 5.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.0% in FY24 as against 13.7% in FY23.
• Depreciation charges decreased by 1.1% and finance costs increased by 30.9% YoY, respectively.
• Other income declined by 68.4% YoY.
• Net profit for the year grew by 0.2% YoY.
• Net profit margins during the year declined from 8.5% in FY23 to 8.1% in FY24.

FIRSTSOURCE SOLUTIONS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	60,223	63,362	5.2%
Other income	Rs m	1,343	424	-68.4%
Total Revenues	Rs m	61,566	63,787	3.6%
Gross profit	Rs m	8,231	9,508	15.5%
Depreciation	Rs m	2,632	2,602	-1.1%
Interest	Rs m	790	1,034	30.9%
Profit before tax	Rs m	6,152	6,297	2.4%
Tax	Rs m	1,015	1,150	13.2%
Profit after tax	Rs m	5,137	5,147	0.2%
Gross profit margin	%	13.7	15.0
Effective tax rate	%	16.5	18.3
Net profit margin	%	8.5	8.1

Must See: These Segments are Witnessing Incredible Growth with Modi's Push

FIRSTSOURCE SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 16 billion as compared to Rs 16 billion in FY23, thereby witnessing an increase of 3.9%.
• Long-term debt down at Rs 42 million as compared to Rs 1 billion during FY23, a fall of 97.0%.
• Current assets rose 9% and stood at Rs 15 billion, while fixed assets rose 7% and stood at Rs 43 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 58 billion as against Rs 54 billion during FY23, thereby witnessing a growth of 8%.

FIRSTSOURCE SOLUTIONS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	33,017	36,533	10.7
Current Liabilities	Rs m	15,597	16,203	3.9
Long-term Debt	Rs m	1,394	42	-97.0
Total Liabilities	Rs m	53,696	57,910	7.8
Current assets	Rs m	14,082	15,374	9.2
Fixed Assets	Rs m	39,613	42,536	7.4
Total Assets	Rs m	53,696	57,910	7.8

FIRSTSOURCE SOLUTIONS Cash Flow Statement Analysis

• FIRSTSOURCE SOLUTIONS's cash flow from operating activities (CFO) during FY24 stood at Rs 6 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -580 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -6 billion, an improvement of 24% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 232 million from the Rs 687 million net cash flows seen during FY23.

FIRSTSOURCE SOLUTIONS 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	7,950	6,448	-18.9%
Cash Flow from Investing Activities	Rs m	164	-580	-
Cash Flow from Financing Activities	Rs m	-7,434	-5,642	-
Net Cash Flow	Rs m	687	232	-66.2%

Current Valuations for FIRSTSOURCE SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.4, an improvement from the EPS of Rs 7.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 223.0, stands at 30.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.3 times, while the price to sales ratio stands at 2.5 times.
• The company's price to cash flow (P/CF) ratio stood at 14.6 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	86.4	90.9
TTM Earnings per share	Rs	7.4	7.4
Diluted earnings per share	Rs	7.3	7.3
Price to Cash Flow	x	9.6	14.6
TTM P/E ratio	x	14.5	30.5
Price / Book Value ratio	x	2.5	3.1
Market Cap	Rs m	81,182	113,331
Dividends per share (Unadj.)	Rs	3.5	3.5

Ratio Analysis for FIRSTSOURCE SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY24, from 0.9x 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 deteriorated and stood at 7.1x during FY24, from 8.8x 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 declined and down at 14.1% during FY24, from 15.6% 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 declined and down at 20.0% during FY24, from 20.2% 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 declined and down at 10.7% during FY24, from 11.0% 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	0.9	0.9
Debtors’ Days	Days	63	67
Interest coverage	x	8.8	7.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.0	10.7
Return on equity	%	15.6	14.1
Return on capital employed	%	20.2	20.0

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

FIRSTSOURCE SOLUTIONS Share Price Performance

Over the last one year, FIRSTSOURCE SOLUTIONS share price has moved up from Rs 126.8 to Rs 223.0, registering a gain of Rs 96.2 or around 75.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 38,221.9 (up 1.6%). Over the last one year it has moved up from 29,876.5 to 38,221.9, a gain of 8,345 points (up 27.9%).

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

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