SPS FINQUEST 2021-22 Annual Report Analysis

Thu, 31 Mar

SPS FINQUEST has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during the year 2021-22.

SPS FINQUEST Income Statement Analysis

• Interest income during the year fell 8.7% on a year-on-year (YoY) basis.
• Interest expenses were down by 80.6% YoY during the same period.
• Operating expenses declined by 14.3% YoY during the year.
• The company's net interest income (NII) increased by 77.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 36.5% in FY22 as against 35.4% in FY21.
• Other income increased by 123.7% YoY during the year.
• Net profit for the year increased by 185.2% YoY.
• Net profit margins during the year increased to 147.1% in FY22 from 47.1% in FY21.

SPS FINQUEST Income Statement – 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Interest Income	Rs m	162	148	-8.7%
Other Income	Rs m	71	160	123.7%
Interest Expense	Rs m	88	17	-80.6%
Net Interest Income	Rs m	74	131	77.4%
Operating Expense	Rs m	61	52	-14.3%
Pre-provision Operating Profit	Rs m	84	238	182.3%
Provisions & Contingencies	Rs m	0	0	0.0%
Profit before tax	Rs m	84	238	183.1%
Tax	Rs m	8	21	163.1%
Profit after tax	Rs m	76	217	185.2%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	35.4	36.5
Net profit margin	%	47.1	147.1

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SPS FINQUEST Balance Sheet Analysis

• The company's deposits during FY22 stood at Rs 0 m as compared to Rs 0 m in FY21, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY21, a rise of 0.0%.
• Cost of deposits for SPS FINQUEST rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 358 m during the year from Rs 208 m in FY21.
• Borrowing stood at Rs 297 m, a growth of 7.1% as compared to previous year.
• Overall, the total assets and liabilities for FY22 stood at Rs 873 m as against Rs 654 m during FY21, thereby witnessing a rise of 33.4%.

SPS FINQUEST Balance Sheet – as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	339	556	64.2%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	208	358	72.2%
Borrowings	Rs m	277	297	7.1%
Total Assets	Rs m	654	873	33.4%

Current Valuations for SPS FINQUEST

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.4, an improvement from the EPS of Rs 16.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 125.9, stands at 6.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.3 times, while the price to income ratio stands at 9.2 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Income per share (Unadj.)	Rs	35.9	14.6
Earnings per share (Unadj.)	Rs	16.9	21.4
Diluted earnings per share	Rs	7.5	21.4
Avg P/E ratio	Rs	6.0	6.2
Avg P/ABV ratio	Rs	1.3	2.3
Avg Market Cap	Rs	455	1,353
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for SPS FINQUEST

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY22, from 0.0x during FY21. 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 0.53x during FY22, from 0.82x during FY21. 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): SPS FINQUEST's capital adequacy ratio (CAR) was at 80.2% as on 31 March 2022 as compared to 54.6% 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 39.1% during FY22, from 22.5% during FY21. 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 24.87% during FY22, from 11.64% during FY21. 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 34.74% during FY22, from 26.37% during FY21. 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. SPS FINQUEST's gross NPA ratio stood at 0.0% as of 31 March 2022 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 SPS FINQUEST was 0.0% in financial year 2022. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.8	0.5
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	54.6	80.2
Return on Equity	%	22.5	39.1
Return on Assets	%	11.6	24.9
Return on Capital Employed	%	26.4	34.7
% 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 SPS FINQUEST has performed over the last 5 years, please visit here.

SPS FINQUEST Share Price Performance

Over the last one year, SPS FINQUEST share price has moved up from Rs 44.9 to Rs 125.9, registering a gain of Rs 81.0 or around 180.5%.

Overall, the S&P BSE SENSEX is up 16.8% over the year.

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