HDFC AMC 2021-22 Annual Report Analysis

Tue, 14 Jun

HDFC AMC has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

HDFC AMC Income Statement Analysis

• Operating income during the year rose 14.2% 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 stood at 75.6% in FY22 as against 79.0% in FY21.
• Depreciation charges decreased by 2.8% and finance costs decreased by 3.5% YoY, respectively.
• Other income declined by 9.0% YoY.
• Net profit for the year grew by 5.1% YoY.
• Net profit margins during the year declined from 71.6% in FY21 to 65.9% in FY22.

HDFC AMC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	18,525	21,154	14.2%
Other income	Rs m	3,494	3,178	-9.0%
Total Revenues	Rs m	22,019	24,332	10.5%
Gross profit	Rs m	14,639	15,999	9.3%
Depreciation	Rs m	554	539	-2.8%
Interest	Rs m	90	86	-3.5%
Profit before tax	Rs m	17,490	18,553	6.1%
Tax	Rs m	4,232	4,622	9.2%
Profit after tax	Rs m	13,258	13,931	5.1%
Gross profit margin	%	79.0	75.6
Effective tax rate	%	24.2	24.9
Net profit margin	%	71.6	65.9

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HDFC AMC Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 3 billion as compared to Rs 3 billion in FY21, thereby witnessing an decrease of -5.5%.
• Current assets rose 18% and stood at Rs 51 billion, while fixed assets rose 2% and stood at Rs 8 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 59 billion as against Rs 51 billion during FY21, thereby witnessing a growth of 15%.

HDFC AMC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	47,637	54,574	14.6
Current Liabilities	Rs m	2,785	2,632	-5.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	50,947	58,804	15.4
Current assets	Rs m	43,002	50,683	17.9
Fixed Assets	Rs m	7,945	8,121	2.2
Total Assets	Rs m	50,947	58,804	15.4

HDFC AMC Cash Flow Statement Analysis

• HDFC AMC's cash flow from operating activities (CFO) during FY22 stood at Rs 13 billion, an improvement of 15.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -5 billion, an improvement of 5.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 2 million from the Rs -250 million net cash flows seen during FY21.

HDFC AMC Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	10,853	12,537	15.5%
Cash Flow from Investing Activities	Rs m	-4,827	-5,080	-
Cash Flow from Financing Activities	Rs m	-6,276	-7,455	-
Net Cash Flow	Rs m	-250	2	-

Current Valuations for HDFC AMC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 65.3, an improvement from the EPS of Rs 62.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,820.0, stands at 27.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.1 times, while the price to sales ratio stands at 18.4 times.
• The company's price to cash flow (P/CF) ratio stood at 39.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	87.0	99.2
TTM Earnings per share	Rs	62.3	65.3
Diluted earnings per share	Rs	62.2	65.3
Price to Cash Flow	x	45.1	39.4
TTM P/E ratio	x	47.0	27.9
Price / Book Value ratio	x	12.1	10.5
Market Cap	Rs m	578,096	570,627
Dividends per share (Unadj.)	Rs	34.0	42.0

Ratio Analysis for HDFC AMC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 19.3x during FY22, from 15.4x during FY21. 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 215.7x during FY22, from 196.4x during FY21. 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 25.5% during FY22, from 27.8% during FY22. 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 34.2% during FY22, from 36.9% during FY21. 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 23.8% during FY22, from 26.2% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	15.4	19.3
Debtors’ Days	Days	2	1
Interest coverage	x	196.4	215.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	26.2	23.8
Return on equity	%	27.8	25.5
Return on capital employed	%	36.9	34.2

To see how HDFC AMC has performed over the last 5 years, please visit here.

HDFC AMC Share Price Performance

Over the last one year, HDFC AMC share price has moved down from Rs 3,081.6 to Rs 1,820.0, registering a loss of Rs 1,261.6 or around 40.9%.

Overall, the S&P BSE SENSEX is up 1.1% over the year.

(To know more, check out historical annual results for HDFC AMC and quarterly results for HDFC AMC)

Read: Latest Annual Report Analysis of HDFC AMC