LKP FINANCE 2022-23 Annual Report Analysis

Tue, 30 May

LKP 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 FY22-23.

LKP FINANCE Income Statement Analysis

• Operating income during the year fell 53.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 48.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 69.3% in FY23 as against 62.1% in FY22.
• Depreciation charges increased by 28.2% and finance costs increased by 30.3% YoY, respectively.
• Other income declined by 98.9% YoY.
• Net profit for the year declined by 62.1% YoY.
• Net profit margins during the year declined from 59.9% in FY22 to 49.3% in FY23.

LKP FINANCE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	610	281	-53.9%
Other income	Rs m	69	1	-98.9%
Total Revenues	Rs m	679	282	-58.4%
Gross profit	Rs m	379	195	-48.6%
Depreciation	Rs m	0	1	28.2%
Interest	Rs m	28	37	30.3%
Profit before tax	Rs m	419	159	-62.2%
Tax	Rs m	53	20	-62.8%
Profit after tax	Rs m	366	139	-62.1%
Gross profit margin	%	62.1	69.3
Effective tax rate	%	12.7	12.5
Net profit margin	%	59.9	49.3

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LKP FINANCE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1 billion as compared to Rs 907 million in FY22, thereby witnessing an increase of 36.5%.
• Current assets rose 5% and stood at Rs 3 billion, while fixed assets rose 35% and stood at Rs 962 million in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4 billion as against Rs 4 billion during FY22, thereby witnessing a growth of 10%.

LKP FINANCE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,893	2,969	2.6
Current Liabilities	Rs m	907	1,237	36.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	3,855	4,249	10.2
Current assets	Rs m	3,144	3,287	4.6
Fixed Assets	Rs m	711	962	35.2
Total Assets	Rs m	3,855	4,249	10.2

LKP FINANCE Cash Flow Statement Analysis

• LKP FINANCE 's cash flow from operating activities (CFO) during FY23 stood at Rs -132 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -322 million, an improvement of 608.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 322 million, an improvement of 3% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -132 million from the Rs 131 million net cash flows seen during FY22.

LKP FINANCE 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	-135	-132	-
Cash Flow from Investing Activities	Rs m	-45	-322	-
Cash Flow from Financing Activities	Rs m	312	322	3.3%
Net Cash Flow	Rs m	131	-132	-

Current Valuations for LKP FINANCE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.0, an decline from the EPS of Rs 29.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 78.0, stands at 7.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 3.5 times.
• The company's price to cash flow (P/CF) ratio stood at 8.2 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	48.5	22.4
TTM Earnings per share	Rs	29.1	11.0
Diluted earnings per share	Rs	29.1	11.0
Price to Cash Flow	x	3.2	8.2
TTM P/E ratio	x	3.2	7.1
Price / Book Value ratio	x	0.5	0.4
Market Cap	Rs m	1,361	1,144
Dividends per share (Unadj.)	Rs	3.0	1.0

Ratio Analysis for LKP FINANCE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY23, from 3.5x 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 5.3x during FY23, from 15.9x 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 declined and down at 4.7% during FY23, from 12.6% 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 declined and down at 6.6% during FY23, from 15.5% 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 declined and down at 4.1% during FY23, from 10.2% 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	3.5	2.7
Debtors’ Days	Days	104	91
Interest coverage	x	15.9	5.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.2	4.1
Return on equity	%	12.6	4.7
Return on capital employed	%	15.5	6.6

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

LKP FINANCE Share Price Performance

Over the last one year, LKP FINANCE share price has moved down from Rs 94.7 to Rs 78.0, registering a loss of Rs 16.7 or around 17.6%.

Overall, the S&P BSE SENSEX is up 16.0% over the year.

(To know more, check out historical annual results for LKP FINANCE and quarterly results for LKP FINANCE )