REDTAPE 2023-24 Annual Report Analysis

Mon, 9 Sep

REDTAPE 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.

REDTAPE Income Statement Analysis

• Operating income during the year rose 25.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 30.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.3% in FY24 as against 16.6% in FY23.
• Depreciation charges increased by 33.3% and finance costs increased by 109.5% YoY, respectively.
• Other income grew by 96.2% YoY.
• Net profit for the year grew by 24.0% YoY.
• Net profit margins during the year declined from 9.7% in FY23 to 9.6% in FY24.

REDTAPE Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	14,683	18,429	25.5%
Other income	Rs m	67	131	96.2%
Total Revenues	Rs m	14,750	18,560	25.8%
Gross profit	Rs m	2,444	3,190	30.6%
Depreciation	Rs m	444	592	33.3%
Interest	Rs m	175	366	109.5%
Profit before tax	Rs m	1,891	2,362	24.9%
Tax	Rs m	470	600	27.8%
Profit after tax	Rs m	1,422	1,762	24.0%
Gross profit margin	%	16.6	17.3
Effective tax rate	%	24.8	25.4
Net profit margin	%	9.7	9.6

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REDTAPE Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 7 billion as compared to Rs 6 billion in FY23, thereby witnessing an increase of 19.7%.
• Long-term debt down at Rs 249 million as compared to Rs 307 million during FY23, a fall of 18.9%.
• Current assets rose 24% and stood at Rs 10 billion, while fixed assets rose 48% and stood at Rs 7 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 16 billion as against Rs 12 billion during FY23, thereby witnessing a growth of 33%.

REDTAPE Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	4,768	6,484	36.0
Current Liabilities	Rs m	5,658	6,773	19.7
Long-term Debt	Rs m	307	249	-18.9
Total Liabilities	Rs m	12,390	16,474	33.0
Current assets	Rs m	7,845	9,733	24.1
Fixed Assets	Rs m	4,546	6,741	48.3
Total Assets	Rs m	12,390	16,474	33.0

REDTAPE Cash Flow Statement Analysis

• REDTAPE's cash flow from operating activities (CFO) during FY24 stood at Rs 844 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 261 million, an improvement of 110% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -51 million from the Rs 119 million net cash flows seen during FY23.

REDTAPE 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	1,270	844	-33.5%
Cash Flow from Investing Activities	Rs m	-1,275	-1,156	-
Cash Flow from Financing Activities	Rs m	124	261	110.0%
Net Cash Flow	Rs m	119	-51	-

Current Valuations for REDTAPE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.8, an improvement from the EPS of Rs 10.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 684.0, stands at 59.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 14.6 times, while the price to sales ratio stands at 5.1 times.
• The company's price to cash flow (P/CF) ratio stood at 32.1 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	106.2	133.4
TTM Earnings per share	Rs	10.3	12.8
Diluted earnings per share	Rs	10.3	12.8
Price to Cash Flow	x	0.0	32.1
TTM P/E ratio	x	0.0	59.0
Price / Book Value ratio	x	0.0	11.7
Market Cap	Rs m	0	75,693
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for REDTAPE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY24, from 1.4x 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 7.5x during FY24, from 11.8x 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 27.2% during FY24, from 29.8% 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 40.5% during FY24, from 40.7% 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 improved and stood at 12.9% during FY24, from 12.9% 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	1.4	1.4
Debtors’ Days	Days	209	180
Interest coverage	x	11.8	7.5
Debt to equity ratio	x	0.1	0.0
Return on assets	%	12.9	12.9
Return on equity	%	29.8	27.2
Return on capital employed	%	40.7	40.5

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

REDTAPE Share Price Performance

Over the last one year, REDTAPE share price has moved up from Rs 449.9 to Rs 684.0, registering a gain of Rs 234.2 or around 52.1%.

Overall, the S&P BSE SENSEX is up 24.0% over the year.

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