GALADA FINANCE 2022-23 Annual Report Analysis

Mon, 26 Jun

GALADA FINANCE has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during the year 2022-23.

GALADA FINANCE Income Statement Analysis

• Interest income during the year fell 13.8% on a year-on-year (YoY) basis.
• Interest expenses were down by 35.4% YoY during the same period.
• Operating expenses declined by 31.6% YoY during the year.
• The company's net interest income (NII) increased by 3.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 433.7% in FY23 as against 196.4% in FY22.
• Other income increased by 105.6% YoY during the year.
• Net profit for the year increased by 108.9% YoY.
• Net profit margins during the year increased to 2.7% in FY23 from -25.9% in FY22.

GALADA FINANCE Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	10	9	-13.8%
Other Income	Rs m	0	0	105.6%
Interest Expense	Rs m	5	3	-35.4%
Net Interest Income	Rs m	6	6	3.4%
Operating Expense	Rs m	8	5	-31.6%
Pre-provision Operating Profit	Rs m	-2	1	160.1%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	-2	1	126.2%
Tax	Rs m	0	0	-23.9%
Profit after tax	Rs m	-3	0	108.9%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	196.4	433.7
Net profit margin	%	-25.9	2.7

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GALADA FINANCE Balance Sheet Analysis

• The company's deposits during FY23 stood at Rs 0 m as compared to Rs 3 m in FY22, thereby witnessing a decrease of 94.2%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY22, a rise of 0.0%.
• Cost of deposits for GALADA FINANCE rose 1305.9% and stood at 154.4%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 1 m during the year from Rs 3 m in FY22.
• Borrowing stood at Rs 15 m, a fall of 33.1% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 68 m as against Rs 78 m during FY22, thereby witnessing a fall of 12.8%.

GALADA FINANCE Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	51	51	0.8%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	3	0	-94.2%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	11.0	154.4
Investments	Rs m	3	1	-53.2%
Borrowings	Rs m	22	15	-33.1%
Total Assets	Rs m	78	68	-12.8%

Current Valuations for GALADA FINANCE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.1, an improvement from the EPS of Rs -0.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 12.3, stands at 190.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.7 times, while the price to income ratio stands at 5.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	3.5	3.0
Earnings per share (Unadj.)	Rs	-0.9	0.1
Diluted earnings per share	Rs	-0.9	0.1
Avg P/E ratio	Rs	-16.1	190.8
Avg P/ABV ratio	Rs	1.1	0.7
Avg Market Cap	Rs	44	46
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for GALADA FINANCE

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY23, from 0.0x during FY22. 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 decreased and stood at 0.29x during FY23, from 0.50x during FY22. 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): GALADA FINANCE's capital adequacy ratio (CAR) was at 77.2% as on 31 March 2023 as compared to 65.5% 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 0.5% during FY23, from -5.3% during FY22. 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 0.35% during FY23, from -3.49% during FY22. 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 4.94% during FY23, from 2.95% during FY22. 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. GALADA FINANCE's gross NPA ratio stood at 0.0% as of 31 March 2023 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 GALADA FINANCE was 0.0% in financial year 2023. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.5	0.3
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	65.5	77.2
Return on Equity	%	-5.3	0.5
Return on Assets	%	-3.5	0.4
Return on Capital Employed	%	3.0	4.9
% 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 GALADA FINANCE has performed over the last 5 years, please visit here.

GALADA FINANCE Share Price Performance

Over the last one year, GALADA FINANCE share price has moved down from Rs 18.4 to Rs 12.3, registering a loss of Rs 6.1 or around 33.2%.

Overall, the S&P BSE SENSEX is up 21.5% over the year.

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