IFCI 2023-24 Annual Report Analysis

Mon, 9 Sep

IFCI has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

IFCI Income Statement Analysis

• Interest income during the year rose 17.2% on a year-on-year (YoY) basis.
• Interest expenses were down by 11.0% YoY during the same period.
• Operating expenses increased by 5.5% YoY during the year.
• The company's net interest income (NII) increased by 34.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 13.8% in FY24 as against 10.7% in FY23.
• Other income increased by 1239.6% YoY during the year.
• Net profit for the year increased by 149.9% YoY.
• Net profit margins during the year increased to 5.2% in FY24 from -12.3% in FY23.

IFCI Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	16,946	19,866	17.2%
Other Income	Rs m	338	4,529	1239.6%
Interest Expense	Rs m	6,416	5,711	-11.0%
Net Interest Income	Rs m	10,530	14,155	34.4%
Operating Expense	Rs m	9,856	10,397	5.5%
Pre-provision Operating Profit	Rs m	1,012	8,287	718.5%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	261	7,509	2779.1%
Tax	Rs m	1,459	5,098	249.5%
Profit after tax	Rs m	-2,078	1,037	149.9%
Minority Interest	Rs m	-880	-1,374	-56.2%
Net Interest Margin	%	10.7	13.8
Net profit margin	%	-12.3	5.2

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IFCI Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 0 m as compared to Rs 0 m in FY23, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 13.6 bn as compared to Rs 19.1 bn during FY23, a fall of 28.6%.
• Cost of deposits for IFCI rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 89.3 bn during the year from Rs 79.6 bn in FY23.
• Borrowing stood at Rs 0 m, a growth of 0.0% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 189.2 bn as against Rs 165.1 bn during FY23, thereby witnessing a rise of 14.6%.

IFCI Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	33,667	40,342	19.8%
Advances	Rs m	19,080	13,632	-28.6%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	79,567	89,302	12.2%
Borrowings	Rs m	0	0	0.0%
Total Assets	Rs m	165,087	189,176	14.6%

Current Valuations for IFCI

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.4, 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 69.0, stands at 97.9 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 4.5 times, while the price to income ratio stands at 5.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	7.7	8.0
Earnings per share (Unadj.)	Rs	-0.9	0.4
Diluted earnings per share	Rs	-0.8	0.4
Avg P/E ratio	Rs	-13.2	97.9
Avg P/ABV ratio	Rs	1.3	4.5
Avg Market Cap	Rs	27,394	101,489
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for IFCI

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio deteriorated and stood at 1,363,150.0x during FY24, from 1,907,980.0x during FY23. 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 increased and stood at 0.00x during FY24, from 0.00x during FY23. 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): IFCI's capital adequacy ratio (CAR) was at -48.4% as on 31 March 2024 as compared to -70.7% 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 2.6% during FY24, from -6.2% during FY23. 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 0.55% during FY24, from -1.26% during FY23. 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 13.43% during FY24, from 6.78% during FY23. 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. IFCI's gross NPA ratio stood at 0.0% as of 31 March 2024 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 IFCI was 83.8% in financial year 2024. This compared with 76.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	1,907,980.0	1,363,150.0
Debt to Equity Ratio	x	0.0	0.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	-70.7	-48.4
Return on Equity	%	-6.2	2.6
Return on Assets	%	-1.3	0.5
Return on Capital Employed	%	6.8	13.4
% of Gross NPAs	%	0.0	0.0
% of Net NPAs	%	76.0	83.8
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

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

IFCI Share Price Performance

Over the last one year, IFCI share price has moved up from Rs 17.3 to Rs 69.0, registering a gain of Rs 51.6 or around 298.1%.

Overall, the S&P BSE SENSEX is up 23.7% over the year.

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