CHOLAMANDALAM FINANCIAL HOLDINGS 2023-24 Annual Report Analysis

Mon, 22 Jul

CHOLAMANDALAM FINANCIAL HOLDINGS 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.

CHOLAMANDALAM FINANCIAL HOLDINGS Income Statement Analysis

• Operating income during the year rose 42.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 50.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 55.8% in FY24 as against 52.5% in FY23.
• Depreciation charges increased by 40.6% and finance costs increased by 60.1% YoY, respectively.
• Other income grew by 25.0% YoY.
• Net profit for the year grew by 36.2% YoY.
• Net profit margins during the year declined from 15.5% in FY23 to 14.9% in FY24.

CHOLAMANDALAM FINANCIAL HOLDINGS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	181,459	258,035	42.2%
Other income	Rs m	2,442	3,053	25.0%
Total Revenues	Rs m	183,900	261,088	42.0%
Gross profit	Rs m	95,343	143,916	50.9%
Depreciation	Rs m	1,761	2,475	40.6%
Interest	Rs m	57,780	92,495	60.1%
Profit before tax	Rs m	38,244	51,998	36.0%
Tax	Rs m	10,061	13,614	35.3%
Profit after tax	Rs m	28,183	38,385	36.2%
Gross profit margin	%	52.5	55.8
Effective tax rate	%	26.3	26.2
Net profit margin	%	15.5	14.9

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CHOLAMANDALAM FINANCIAL HOLDINGS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 558 billion as compared to Rs 341 billion in FY23, thereby witnessing an increase of 63.8%.
• Long-term debt stood at Rs 928 billion as compared to Rs 749 billion during FY23, a growth of 23.9%.
• Current assets rose 43% and stood at Rs 76 billion, while fixed assets rose 35% and stood at Rs 1,685 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 1,761 billion as against Rs 1,301 billion during FY23, thereby witnessing a growth of 35%.

CHOLAMANDALAM FINANCIAL HOLDINGS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	75,788	101,030	33.3
Current Liabilities	Rs m	340,662	557,908	63.8
Long-term Debt	Rs m	749,022	927,829	23.9
Total Liabilities	Rs m	1,301,365	1,760,932	35.3
Current assets	Rs m	53,125	76,018	43.1
Fixed Assets	Rs m	1,248,015	1,684,543	35.0
Total Assets	Rs m	1,301,365	1,760,932	35.3

CHOLAMANDALAM FINANCIAL HOLDINGS Cash Flow Statement Analysis

• CHOLAMANDALAM FINANCIAL HOLDINGS's cash flow from operating activities (CFO) during FY24 stood at Rs -357 billion, an improvement of 21.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -26 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 383 billion, an improvement of 40% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -822 million from the Rs -17 billion net cash flows seen during FY23.

CHOLAMANDALAM FINANCIAL HOLDINGS 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	-293,287	-357,264	-
Cash Flow from Investing Activities	Rs m	2,952	-26,250	-
Cash Flow from Financing Activities	Rs m	272,876	382,692	40.2%
Net Cash Flow	Rs m	-17,460	-822	-

Current Valuations for CHOLAMANDALAM FINANCIAL HOLDINGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 204.4, an improvement from the EPS of Rs 150.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,519.9, stands at 7.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.1 times.
• The company's price to cash flow (P/CF) ratio stood at 4.2 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	966.3	1,374.1
TTM Earnings per share	Rs	150.1	204.4
Diluted earnings per share	Rs	150.1	204.4
Price to Cash Flow	x	3.4	4.2
TTM P/E ratio	x	3.6	7.4
Price / Book Value ratio	x	1.5	1.7
Market Cap	Rs m	113,605	171,582
Dividends per share (Unadj.)	Rs	0.6	0.6

Ratio Analysis for CHOLAMANDALAM FINANCIAL HOLDINGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.1x during FY24, from 0.2x 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 1.6x during FY24, from 1.7x 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 improved and stood at 38.0% during FY24, from 37.2% 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 improved and stood at 14.0% during FY24, from 11.6% 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 7.4% during FY24, from 6.6% 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	0.2	0.1
Debtors’ Days	Days	0	1
Interest coverage	x	1.7	1.6
Debt to equity ratio	x	9.9	9.2
Return on assets	%	6.6	7.4
Return on equity	%	37.2	38.0
Return on capital employed	%	11.6	14.0

To see how CHOLAMANDALAM FINANCIAL HOLDINGS has performed over the last 5 years, please visit here.

CHOLAMANDALAM FINANCIAL HOLDINGS Share Price Performance

Over the last one year, CHOLAMANDALAM FINANCIAL HOLDINGS share price has moved up from Rs 925.3 to Rs 1,519.9, registering a gain of Rs 594.6 or around 64.3%.

Overall, the S&P BSE SENSEX is up 20.6% over the year.

(To know more, check out historical annual results for CHOLAMANDALAM FINANCIAL HOLDINGS and quarterly results for CHOLAMANDALAM FINANCIAL HOLDINGS)