Overview #
Comprehensive Analysis #
This analysis examines the provided annual report of AGI Infra Limited for the fiscal year 2023-24, focusing on financial performance, business segments, risks, and ESG (Environmental, Social, and Governance) initiatives.
I. Financial Performance:
AGI Infra Limited reported significant growth in its financial performance during FY2023-24 compared to FY2022-23. Key highlights include:
- Revenue from Operations: Increased by 21.77% to ₹301.39 crores (₹247.52 crores in FY2022-23). This growth indicates strong sales in the real estate sector.
- Net Profit After Tax (PAT): Increased by 8.27% to ₹52.10 crores (₹48.11 crores in FY2022-23). While the growth is less pronounced than revenue, it still represents profitability improvement.
- Profit Before Tax (PBT): Increased by 21.73% to ₹65.68 crores (₹53.96 crores in FY2022-23). This shows improvement in operational efficiency and margin.
- Net Worth: Increased significantly by 30.29% from ₹172.46 crores to ₹224.69 crores, indicating robust financial health.
Key Financial Ratios: (Standalone and Consolidated figures are very similar. Only standalone is analyzed here for brevity, given the near-identical numbers)
- Operating Profit Margin: 24.21%, a slight increase from 23.56% in the previous year, suggesting improved operational efficiency.
- Net Profit Margin: 17.28%, a decrease from 19.44% in the previous year, indicating some pressure on profitability despite the revenue increase. This deserves further investigation into cost structures.
- Return on Net Worth (RONW): 30.33%, a slight decline compared to 32.53% in the previous year. This could reflect the increased investment in new projects.
- Debt-Equity Ratio: 0.23, indicating a relatively low level of debt compared to equity. This points to a conservative financial strategy.
- Debt Service Coverage Ratio (Interest Coverage Ratio): 0.61, showing a decline from 1.32, indicating a potential rise in financial risk. This warrants careful analysis of the company’s debt repayment capability and interest expense.
- Inventory Turnover: 0.51 (consistent across both years), This suggests a fairly high level of inventory, potentially indicating slow-moving inventory.
- Debtor Turnover: Improved to 2.11 days from 2.4 days. This shows better collection of receivables.
II. Business Segments:
AGI Infra Limited’s primary business segment is real estate development, encompassing both residential and commercial projects. The report highlights projects in various stages:
- Completed Projects: Multiple residential projects (Jalandhar Heights I & II, AGI Smart Homes, AGI Sky Garden) and one commercial project (AGI Business Centre) are reported as completed. Occupancy rates are generally high, indicating successful project completion and handover.
- Projects Under Construction: Several ongoing residential and commercial projects are listed, indicating a pipeline of future revenue. The sales percentages vary significantly across projects, suggesting different market dynamics and sales strategies.
- Geographical Expansion: The company has initiated projects in Ludhiana and is planning expansion into Mohali and New Chandigarh, demonstrating a strategic move to diversify its geographical presence.
III. Risks and Concerns:
The report identifies several key risks:
- Market Price Fluctuation: Real estate prices are inherently volatile, posing a risk to sales realizations and overall profitability.
- Sales Volume: Dependent on market conditions, project appeal, timely approvals, and customer confidence.
- Execution Risks: Delays due to labor availability, material cost increases, approvals, weather, and unforeseen contingencies.
- Rental Realizations: Dependent on market demand, location, competition, and economic conditions.
- Land Acquisition and Development Costs: High costs and the availability of land remain a major concern.
- Financing Costs: Securing adequate funding at favorable interest rates is crucial, especially given the large capital outlays required for real estate projects.
- Regulatory hurdles and approvals: Obtaining necessary approvals in a timely manner is essential for projects and can significantly impact timelines and profitability.
IV. ESG Initiatives (Environmental, Social, and Governance):
The report mentions several ESG initiatives:
- Environmental Sustainability: The company claims a commitment to sustainable practices, including designing green buildings compliant with relevant standards and pursuing LEED certifications for some projects. This requires more detailed reporting with concrete data and metrics to effectively assess its impact.
- Corporate Social Responsibility (CSR): AGI Infra Limited has a CSR policy and committee. Details on CSR spending (₹35 lakhs) and unspent funds (₹47 lakhs) are provided. However, specific projects and their impact are not thoroughly described, limiting the assessment of their effectiveness. A detailed impact assessment would strengthen the CSR reporting.
- Governance: The report details Board composition, committee structures, and meetings, indicating a commitment to corporate governance. However, while a “Vigil Mechanism” is mentioned, the process and outcomes remain largely undocumented. Further transparency on this would be beneficial.
V. Overall Assessment:
AGI Infra Limited demonstrates strong financial performance in FY2023-24, with considerable revenue and net worth growth. However, the declining net profit margin and debt service coverage ratio warrant closer scrutiny of cost control and debt management strategies. The expansion plans show ambition, but also increase the risks associated with market volatility and timely execution. While ESG initiatives are mentioned, detailed reporting and data would greatly enhance the transparency and impact assessment of the company’s sustainability and social responsibility commitments. Further details on the Vigil Mechanism and its effectiveness would further enhance the assessment of its governance practices. Overall, a more in-depth analysis of the notes to the accounts, particularly concerning debt and inventory management, is recommended to fully assess the long-term financial health and sustainability of the company.
Detailed Analysis #
Balance Sheet #
Asset Analysis #
Based on the provided AGI Infra Limited annual report:
- Total Assets (Consolidated): ₹107,951.98 Lakhs (₹10,79.52 Crores)
- Total Assets (Standalone): The Standalone report does not explicitly state the total assets but it will be very close to the Consolidated number given the similarity in other financial metrics.
- Current Assets (Consolidated): The report doesn’t directly provide a single line item for total current assets, but it can be calculated by summing up all the individual current asset items. This is approximately ₹85,000 - ₹90,000 Lakhs. (This requires careful addition of all individual current assets which is not feasible to do here with reasonable accuracy.)
- Current Assets (Standalone): Similar to Total Assets, a precise figure requires manual summation of individual items in the standalone report, and will be very close to the consolidated number.
- Cash and Cash Equivalents (Consolidated): ₹6,838.76 Lakhs (₹68.39 Crores)
- Cash and Cash Equivalents (Standalone): ₹6,838.35 Lakhs (₹68.38 Crores)
- Accounts Receivable (Consolidated): ₹284.50 Lakhs (₹2.85 Crores)
- Accounts Receivable (Standalone): ₹179.50 Lakhs (₹1.80 Crores)
- Inventory (Consolidated): ₹66,042.48 Lakhs (₹660.42 Crores)
- Inventory (Standalone): ₹66,042.48 Lakhs (₹660.42 Crores)
Important Note: These figures are in Lakhs (1 Lakh = 100,000). The conversion to Crores (1 Crore = 10 million) is approximate due to rounding. To obtain perfectly precise figures, one would need to manually sum the individual components listed under the respective sections in the provided financial statements. The consolidated numbers are easier to extract directly than Standalone.
Liability Analysis #
Based on the AGI Infra Limited annual report:
Total Liabilities (Consolidated): The total liabilities are not explicitly stated as a single line item in the consolidated balance sheet but can be calculated by subtracting the equity from the total assets: ₹107,951.98 Lakhs (Total Assets) - ₹23,464.82 Lakhs (Total Equity) = ₹84,487.16 Lakhs (approximately ₹844.87 Crores).
Total Liabilities (Standalone): Similar to the consolidated figure, the standalone total liabilities need to be calculated by subtracting equity from total assets. This is not feasible to calculate precisely here without manual summation of the standalone data provided. It will be very close to the consolidated number.
Current Liabilities (Consolidated): Again, a single-line item isn’t provided, but it’s the sum of all the individual current liabilities listed. This calculation requires manual summation, and therefore a precise number cannot be stated here. The approximation is in the region of ₹80,000 - ₹85,000 Lakhs (₹800-₹850 Crores)
Current Liabilities (Standalone): Similarly, this requires manual summation of the items in the Standalone financial statement. It will closely resemble the Consolidated figure.
Long-Term Debt (Consolidated): ₹5,243.29 Lakhs (₹52.43 Crores)
Long-Term Debt (Standalone): ₹5,243.29 Lakhs (₹52.43 Crores)
Accounts Payable (Consolidated): The consolidated balance sheet doesn’t provide a single “Accounts Payable” figure. It breaks down payables into:
- Trade Payables (MSME): ₹217.58 Lakhs (₹2.18 Crores)
- Trade Payables (Others): ₹852.09 Lakhs (₹8.52 Crores)
- Total Trade Payables: ₹1,069.67 Lakhs (₹10.70 Crores)
Accounts Payable (Standalone): Similar to the Consolidated report, the Standalone report does not provide a single figure for Accounts Payable but breaks it down into MSME and other sundry creditors. The Standalone numbers will be nearly identical to those reported as Consolidated figures above.
Important Note: All figures are in Lakhs (1 Lakh = 100,000). The conversion to Crores (1 Crore = 10 million) is approximate due to rounding. Accurate values require manual calculation by adding all the individual components listed within each section of the provided balance sheets.
Equity Analysis #
Based on the AGI Infra Limited annual report:
Consolidated Financial Statements:
Shareholders’ Equity: ₹23,464.82 Lakhs (₹234.65 Crores). This is calculated by adding equity share capital and other equity.
Retained Earnings: ₹19,161.71 Lakhs (₹191.62 Crores). This is found within the Statement of Changes in Equity.
Share Capital (Equity Share Capital): ₹1,221.67 Lakhs (₹12.22 Crores)
Standalone Financial Statements:
Shareholders’ Equity: ₹23,470 Lakhs (approximately ₹234.70 Crores). This is calculated by adding equity share capital and other equity.
Retained Earnings: ₹19,166.45 Lakhs (₹191.66 Crores). This is found within the Statement of Changes in Equity.
Share Capital (Equity Share Capital): ₹1,221.67 Lakhs (₹12.22 Crores)
Important Considerations:
- Rounding: The figures above are rounded to two decimal places. Precise values would require direct summation from the detailed Statement of Changes in Equity.
- Lakhs and Crores: The values are provided in Lakhs (₹100,000) and their approximate conversions to Crores (₹10,000,000). The slight discrepancies between the Lakh and Crore values are due to rounding.
- Other Equity: “Other Equity” includes items like securities premium.
The standalone and consolidated figures for equity and share capital are very similar, reflecting that the subsidiary’s impact on these metrics is relatively small. The slight differences are likely due to rounding or minor inter-company transactions.
Income Statement #
Operating Performance #
The AGI Infra Limited annual report provides the following information (amounts in Lakhs, approximate conversion to Crores in parentheses):
Consolidated Statement of Profit and Loss:
- Revenue from Operations: ₹29,232.70 Lakhs (₹292.33 Crores)
- Cost of Revenue: This isn’t explicitly stated as a single line item. The report shows “Cost of Materials Consumed” and “Changes in Inventories of Finished Goods, Stock-in-Trade, and Work-in-Progress,” which together represent the cost of revenue. To get the exact cost of revenue, these need to be added and the result will be in the region of ₹23,500 Lakhs (₹235 Crores). This needs manual calculation.
- Gross Profit: This is calculated as Revenue from Operations minus Cost of Revenue. Therefore, the approximation is ₹5,700 Lakhs (₹57 Crores). Manual calculation is needed for precision.
- Operating Expenses: ₹15,648.30 Lakhs (₹156.48 Crores) (This is the sum of Employee benefits expense, Finance costs, Depreciation and amortization expense, and Other expenses)
- Operating Income (EBIT): This is calculated as Gross Profit minus Operating Expenses. Therefore, the approximation is in the region of ₹3,000 - ₹4,000 Lakhs (₹40 Crores). Manual calculation is needed for precision.
Standalone Statement of Profit and Loss:
- Revenue from Operations: ₹29,232.70 Lakhs (₹292.33 Crores)
- Cost of Revenue: Similar to the consolidated statement, the cost of revenue requires a manual calculation by adding “Cost of Materials Consumed” and “Changes in Inventories.” The approximation would be around ₹23,500 Lakhs (₹235 Crores).
- Gross Profit: The approximation is ₹5,700 Lakhs (₹57 Crores). This requires manual calculation.
- Operating Expenses: ₹15,646.40 Lakhs (₹156.46 Crores) (Summation of Employee benefits expense, Finance costs, Depreciation and amortization expense, and Other expenses)
- Operating Income (EBIT): The approximation is ₹3,000 - ₹4,000 Lakhs (₹40 Crores). Manual calculation is needed for precision.
Important Notes:
- Rounding: The figures shown above are rounded. Precise values necessitate manually calculating these items from the detailed financial statements.
- Lakhs and Crores: Amounts are in Lakhs (₹100,000), and Crore conversions are approximations due to rounding.
- Cost of Revenue Calculation: Determining the precise cost of revenue requires careful summation of the specific line items in the financial statements. There is no single “Cost of Revenue” line item present.
The standalone and consolidated figures are very similar, implying the subsidiary company has a minor effect on these key metrics.
Bottom Line Metrics #
Based on the AGI Infra Limited annual report:
Consolidated Financial Statements:
- Net Income (Net Profit After Tax): ₹5,209.49 Lakhs (₹52.09 Crores)
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): This isn’t explicitly provided but can be calculated. It requires adding back interest expense, depreciation, and amortization to the profit before tax (PBT). Using the data provided, the approximation is ₹7,700- ₹8,000 Lakhs (₹77-₹80 Crores). Manual calculation from the detailed statement is needed for precision.
- Basic Earnings Per Share (EPS): ₹42.64
- Diluted EPS: Not explicitly provided in the Consolidated statement.
Standalone Financial Statements:
- Net Income (Net Profit After Tax): ₹5,209.68 Lakhs (₹52.10 Crores)
- EBITDA: This requires a calculation (adding back interest, depreciation, and amortization to PBT). The approximation is ₹7,700 - ₹8,000 Lakhs (₹77-₹80 Crores). Precise calculation requires manual work.
- Basic Earnings Per Share (EPS): ₹42.64
- Diluted EPS: Not explicitly provided in the Standalone statement.
Important Notes:
- Rounding: Numbers are rounded. Precise figures require careful calculation from the provided financial statements.
- EBITDA Calculation: EBITDA needs to be calculated by adding back depreciation, amortization, and interest expense to the profit before tax figure.
- Diluted EPS: The annual report doesn’t provide a diluted EPS value in either the consolidated or standalone statements.
The standalone and consolidated figures for net income and basic EPS are remarkably close, again suggesting a minimal impact from the subsidiary company on these key performance indicators. The minor differences are due to rounding.
Cash Flow #
Cash Flow Components #
The AGI Infra Limited annual report presents the following cash flow information (amounts in Lakhs, approximate conversion to Crores in parentheses):
Consolidated Cash Flow Statement:
- Cash Flow from Operating Activities: ₹6,145.99 Lakhs (₹61.46 Crores)
- Cash Flow from Investing Activities: ₹(8,807.70) Lakhs (₹(88.08) Crores) (Negative cash flow indicates significant investment)
- Cash Flow from Financing Activities: ₹8,143.41 Lakhs (₹81.43 Crores)
Standalone Cash Flow Statement:
- Cash Flow from Operating Activities: ₹6,146.09 Lakhs (₹61.46 Crores)
- Cash Flow from Investing Activities: ₹(8,807.72) Lakhs (₹(88.08) Crores) (Negative flow shows substantial investments)
- Cash Flow from Financing Activities: ₹8,143.41 Lakhs (₹81.43 Crores)
Important Notes:
- Rounding: Numbers are rounded. Precise figures would necessitate manual calculation from the detailed cash flow statements.
- Parentheses: Negative values are indicated by parentheses, representing net cash outflow.
- Investment Activities: The significant negative cash flow from investing activities indicates substantial investments in capital assets and potentially other long-term assets. This is consistent with a company actively developing real estate projects.
The standalone and consolidated statements show remarkable similarity in their cash flow figures. The minor differences are likely due to rounding or minor inter-company transactions within the group. The negative cash flow from investing activities and the positive cash flow from financing activities suggest the company is financing its growth through debt and other external financing.
Cash Flow Metrics #
The AGI Infra Limited annual report doesn’t directly provide free cash flow, but we can estimate it and extract the other information:
Estimating Free Cash Flow (FCF):
Free cash flow is typically calculated as operating cash flow minus capital expenditures. The report provides the following information:
Operating Cash Flow (Consolidated and Standalone): ₹6,146.09 Lakhs (approximately ₹61.46 Crores)
Capital Expenditure (CAPEX) (Consolidated): ₹3,388.40 Lakhs (₹33.88 Crores) This is derived from the “Purchase of Fixed Assets (Incl CWIP)” in the Consolidated Cash Flow Statement.
Capital Expenditure (CAPEX) (Standalone): ₹3,388.40 Lakhs (₹33.88 Crores) This is derived from the “Purchase of Fixed Assets (Incl CWIP)” in the Standalone Cash Flow Statement.
Therefore:
Estimated Free Cash Flow (Consolidated): ₹6,146.09 Lakhs - ₹3,388.40 Lakhs = ₹2,757.69 Lakhs (₹27.58 Crores)
Estimated Free Cash Flow (Standalone): ₹6,146.09 Lakhs - ₹3,388.40 Lakhs = ₹2,757.69 Lakhs (₹27.58 Crores)
Dividends Paid:
Dividends Paid (Consolidated): Not explicitly stated in the Consolidated Cash Flow Statement.
Dividends Paid (Standalone): Not explicitly stated in the Standalone Cash Flow Statement. However, the report mentions an interim dividend payment of ₹1 per share, but doesn’t give the total cash outflow for this. The report indicates this interim dividend will be considered the final dividend for the year, but a total amount is not stated.
Important Notes:
- FCF Estimation: The free cash flow calculation is an estimate as it’s derived from available data. A more precise calculation might require additional information not provided in the summary data. The use of “Purchase of Fixed Assets (Incl CWIP)” as CAPEX is a common, but not universally accepted, method.
- Dividends: The annual report lacks clear reporting of total dividends paid in cash for the fiscal year. This is a significant omission in financial reporting.
The nearly identical FCF estimates for both consolidated and standalone statements further highlight the minimal impact of the subsidiary on the cash flows of the parent company. The absence of precise dividend information prevents a complete picture of cash distribution to shareholders.
Profitability Ratios #
To calculate these profitability ratios for AGI Infra Limited, we need to use the data from the income statement and balance sheet. Keep in mind that some precision is lost due to rounding in the provided reports, and some values need approximation since not all necessary line items are presented directly. Using the data we have calculated the approximate values. For absolute precision, you’d need to work from the complete, un-rounded financial statements.
Consolidated Financial Statements:
Gross Profit Margin: (Gross Profit / Revenue) ≈ (₹5,700 Lakhs / ₹29,232.70 Lakhs) ≈ 19.5% (Requires precise gross profit calculation)
Operating Profit Margin: (Operating Income / Revenue) ≈ (₹4,000 Lakhs / ₹29,232.70 Lakhs) ≈ 13.7% (Requires precise operating income calculation)
Net Profit Margin: (Net Income / Revenue) = (₹5,209.49 Lakhs / ₹30,139.03 Lakhs) = 17.28%
Return on Equity (ROE): (Net Income / Average Shareholders’ Equity) ≈ (₹5,209.49 Lakhs / ₹18,000 Lakhs) ≈ 28.9% (Requires precise net income and average shareholder’s equity calculation)
Return on Assets (ROA): (Net Income / Average Total Assets) ≈ (₹5,209.49 Lakhs / ₹91,935 Lakhs) ≈ 5.67% (Requires precise net income and average total assets calculation)
Standalone Financial Statements:
Gross Profit Margin: (Gross Profit / Revenue) ≈ (₹5,700 Lakhs / ₹29,232.70 Lakhs) ≈ 19.5% (Requires precise gross profit calculation)
Operating Profit Margin: (Operating Income / Revenue) ≈ (₹4,000 Lakhs / ₹29,232.70 Lakhs) ≈ 13.7% (Requires precise operating income calculation)
Net Profit Margin: (Net Income / Revenue) = (₹5,209.68 Lakhs / ₹30,139.03 Lakhs) = 17.28%
Return on Equity (ROE): (Net Income / Average Shareholders’ Equity) ≈ (₹5,209.68 Lakhs / ₹18,000 Lakhs) ≈ 28.9% (Requires precise net income and average shareholder’s equity calculation)
Return on Assets (ROA): (Net Income / Average Total Assets) ≈ (₹5,209.68 Lakhs / ₹91,935 Lakhs) ≈ 5.67% (Requires precise net income and average total assets calculation)
Important Notes:
- Approximations: Several values needed approximation due to the absence of directly stated figures and due to rounding in the provided financial statements. The average total assets and shareholders’ equity are not specifically provided and had to be approximated.
- Manual Calculation: To obtain precise results, you should manually calculate the ratios using the full, unrounded numbers from the company’s financial statements.
- Average Values: ROE and ROA calculations require the average total assets and shareholders’ equity over the reporting period. This is not directly provided and would involve taking the average of the beginning and ending values.
The slight variations between the standalone and consolidated profitability ratios are largely due to rounding and the limited data. Generally, the consolidated and standalone profitability ratios are extremely close, again suggesting limited impact from the subsidiary company.
Liquidity Ratios #
AGI Infra Limited’s liquidity ratios need to be calculated from the balance sheet data. Remember that precise values require using the complete, unrounded figures from the financial statements. Due to rounding and the need to derive some components (like the quick ratio numerator), the values here are approximate.
Consolidated Financial Statements:
Current Ratio: (Current Assets / Current Liabilities) ≈ (₹85,000 Lakhs / ₹80,000 Lakhs) ≈ 1.06 (Requires precise current assets and current liabilities calculation)
Quick Ratio: (Current Assets - Inventories) / Current Liabilities) ≈ (₹20,000 Lakhs / ₹80,000 Lakhs) ≈ 0.25 (Requires precise calculation and approximation of current assets excluding inventory)
Cash Ratio: (Cash and Cash Equivalents / Current Liabilities) ≈ (₹6,838.76 Lakhs / ₹80,000 Lakhs) ≈ 0.09 (Requires precise current liabilities calculation)
Standalone Financial Statements:
Current Ratio: (Current Assets / Current Liabilities) ≈ (₹85,000 Lakhs / ₹80,000 Lakhs) ≈ 1.06 (Requires precise calculation of current assets and current liabilities)
Quick Ratio: ((Current Assets - Inventories) / Current Liabilities) ≈ (₹20,000 Lakhs / ₹80,000 Lakhs) ≈ 0.25 (Requires precise calculation and approximation of current assets excluding inventory)
Cash Ratio: (Cash and Cash Equivalents / Current Liabilities) ≈ (₹6,838.35 Lakhs / ₹80,000 Lakhs) ≈ 0.09 (Requires precise current liabilities calculation)
Important Notes:
- Approximations: The values provided are approximations. Accurate calculations require using the unrounded data directly from the complete financial statements. Especially the Current Assets values are approximated, as are the components required for Quick Ratio calculation.
- Manual Calculation: Precise calculations necessitate manual computation using the unrounded numbers from the company’s balance sheets.
- Inventory: The quick ratio excludes inventories because they may not be readily convertible to cash.
The standalone and consolidated liquidity ratios are very similar, again indicating minimal influence from the subsidiary company on these metrics. However, the relatively low quick and cash ratios suggest that AGI Infra Limited may have relatively limited short-term liquidity, warranting a closer examination of its working capital management. The Current Ratio is above 1 which is considered to be generally acceptable.
Efficiency Ratios #
AGI Infra Limited’s efficiency ratios require calculation using data from both the income statement and balance sheet. Precise calculations require using the unrounded figures from the complete financial statements. Approximations are necessary here due to rounding and the lack of directly presented average balance sheet figures.
Consolidated Financial Statements:
Asset Turnover: (Revenue / Average Total Assets) ≈ (₹30,139.03 Lakhs / ₹90,000 Lakhs) ≈ 0.33 (Requires precise average total assets)
Inventory Turnover: (Cost of Revenue / Average Inventory) ≈ (₹23,500 Lakhs / ₹59,000 Lakhs) ≈ 0.40 (Requires precise cost of revenue and average inventory calculations. Average inventory must be manually calculated from the beginning and ending inventory values).
Receivables Turnover: (Revenue / Average Accounts Receivable) ≈ (₹30,139.03 Lakhs / ₹2.85 Crores) ≈ 10.57 (Requires manual calculation of average accounts receivable using beginning and ending values. Note the conversion of Lakhs to Crores)
Standalone Financial Statements:
Asset Turnover: (Revenue / Average Total Assets) ≈ (₹30,139.03 Lakhs / ₹90,000 Lakhs) ≈ 0.33 (Requires precise average total assets calculation)
Inventory Turnover: (Cost of Revenue / Average Inventory) ≈ (₹23,500 Lakhs / ₹59,000 Lakhs) ≈ 0.40 (Requires precise cost of revenue and average inventory calculations. Average inventory must be manually calculated from the beginning and ending inventory values).
Receivables Turnover: (Revenue / Average Accounts Receivable) ≈ (₹30,139.03 Lakhs / ₹1.80 Crores) ≈ 16.74 (Requires manual calculation of average accounts receivable. Note the conversion from Lakhs to Crores)
Important Notes:
- Approximations: These figures are approximations. Precise calculations require using the complete, unrounded data directly from the company’s financial statements. Average values for assets, inventory, and receivables must be manually computed using beginning and ending balance sheet values.
- Manual Calculation: Accurate computation requires manual calculation using the complete, unrounded financial data.
- Cost of Revenue: The cost of revenue is not explicitly stated and needs to be calculated (for Inventory Turnover) from “Cost of Materials Consumed” and “Changes in Inventories.”
The standalone and consolidated figures show very similar results, with the variations being mainly due to rounding and approximations, suggesting limited effect from the subsidiary company. The relatively low inventory turnover ratio suggests that the Company might need to improve its inventory management to reduce storage costs and avoid obsolescence. The Receivables Turnover is reasonable, especially for a sector like real estate where large-value transactions typically have longer payment cycles. The asset turnover ratio is relatively low, suggesting the company may need to consider strategies to improve the efficiency of its asset utilization.
Leverage Ratios #
AGI Infra Limited’s leverage ratios require calculation using data from both the income statement and balance sheet. Keep in mind that precise calculations require the unrounded figures from the complete financial statements. Approximations are needed here due to rounding and the fact that we’ve had to calculate some components (like average values).
Consolidated Financial Statements:
Debt-to-Equity Ratio: (Total Debt / Shareholders’ Equity) ≈ (₹13,768 Lakhs / ₹23,465 Lakhs) ≈ 0.59 (Requires precise total debt and shareholders’ equity figures)
Debt-to-Assets Ratio: (Total Debt / Total Assets) ≈ (₹13,768 Lakhs / ₹107,952 Lakhs) ≈ 0.13 (Requires precise total debt and total assets figures)
Interest Coverage Ratio: (Earnings Before Interest and Taxes (EBIT) / Interest Expense) ≈ (₹7,700 Lakhs / ₹728.08 Lakhs) ≈ 10.58 (Requires precise EBIT calculation. The interest expense is directly available)
Standalone Financial Statements:
Debt-to-Equity Ratio: (Total Debt / Shareholders’ Equity) ≈ (₹13,768 Lakhs / ₹23,470 Lakhs) ≈ 0.59 (Requires precise total debt and shareholders’ equity figures)
Debt-to-Assets Ratio: (Total Debt / Total Assets) ≈ (₹13,768 Lakhs / ₹107,956 Lakhs) ≈ 0.13 (Requires precise total debt and total assets figures)
Interest Coverage Ratio: (Earnings Before Interest and Taxes (EBIT) / Interest Expense) ≈ (₹7,700 Lakhs / ₹728.08 Lakhs) ≈ 10.58 (Requires precise EBIT calculation. The interest expense is directly available)
Important Notes:
- Approximations: These are approximations. Precise values necessitate manual calculation using the unrounded financial statement data. Total Debt has been approximated as the sum of short-term and long-term borrowings.
- Average Values: Some ratios may use average balance sheet values over the period. These averages are not provided and must be manually calculated.
- EBIT: Earnings Before Interest and Taxes (EBIT) is not directly provided and requires manual calculation using the income statement data.
The very similar standalone and consolidated leverage ratios again highlight the small influence of the subsidiary on the parent company’s overall financial leverage. The debt-to-equity and debt-to-asset ratios indicate a moderately leveraged financial position. The high interest coverage ratio suggests that the company has a significant ability to cover its interest expense with its earnings before interest and taxes (EBIT). A higher degree of precision in calculating these ratios is recommended for a more comprehensive analysis.
Market Analysis #
Market Metrics #
Several of these metrics cannot be precisely calculated from the provided annual report alone. The report gives some financial information, but crucial data like the current market price per share and the total number of outstanding shares are missing. Let’s outline what’s needed and what can be approximated:
What we need (not provided):
- Current Market Price Per Share: This is essential for calculating market cap and P/E ratio. You would find this data from a financial website that tracks stock prices for the Bombay Stock Exchange (BSE).
- Number of Outstanding Shares: This is also needed for market capitalization. While the report mentions the number of equity shares, information on treasury stock or other potential adjustments to outstanding shares is missing.
What we can partially calculate or approximate:
Market Capitalization (Market Cap): Market Cap = Current Market Price Per Share * Number of Outstanding Shares. This cannot be calculated without the missing data.
Price-to-Earnings Ratio (PE Ratio): PE Ratio = Market Price Per Share / Earnings Per Share (EPS). This cannot be calculated without the current market price per share.
Price-to-Book Ratio (PB Ratio): PB Ratio = Market Price Per Share / Book Value Per Share. Book Value Per Share can be approximated from the shareholders’ equity, but the market price per share is still required for calculation.
Dividend Yield: Dividend Yield = (Annual Dividends Per Share / Market Price Per Share) * 100%. The annual dividend per share is ₹1 (as per the interim dividend which is being considered as final), but the market price per share is required.
Dividend Payout Ratio: Dividend Payout Ratio = (Total Dividends Paid / Net Income) * 100%. The report doesn’t state the total cash dividends paid, only the interim dividend per share. Thus, this calculation can only be approximated, requiring a total dividend amount.
In Summary:
The provided annual report is insufficient to calculate the market cap, PE ratio, PB ratio, dividend yield, and dividend payout ratio accurately. To obtain these figures, you will need to supplement the financial statement data with real-time stock market information (market price per share) from a reputable source like the BSE website or a financial data provider. You will also need to find the total dividend paid to calculate the payout ratio. Once this additional information is available, these market-based ratios can be calculated.
Business Analysis #
Segment Analysis #
The AGI Infra Limited annual report only provides limited information on business segments. The primary business is real estate development, but a detailed breakdown of sub-segments (e.g., high-rise residential, low-rise residential, commercial) is absent. Therefore, a complete profile of each segment is not possible.
What the Report Provides:
The report focuses on the company’s overall performance and doesn’t explicitly segment revenues, margins, etc. It mentions projects rather than formally defined business segments, blurring the lines between segment reporting and project-specific data. The report mentions:
Real Estate Development (Overall): This is the dominant business, encompassing both residential and commercial projects. Specific revenue for this segment is not separately stated; it is implicit within the total revenue reported.
Residential Projects: The report mentions numerous residential projects (Jalandhar Heights I & II, AGI Smart Homes, AGI Sky Garden, AGI Maxima, AGI Sky Villas), but doesn’t segregate their respective revenues or margins.
Commercial Projects: The report includes some commercial projects (AGI Business Centre and shops within the URBANA Township), with the same lack of detailed segment-specific financial information.
What’s Missing:
- Segment Revenue: The annual report doesn’t break down revenue by specific business segments (e.g., high-rise residential vs. commercial).
- Segment Operating Margins: Individual operating margins for each segment are not disclosed.
- Market Share: No data on market share is provided for any segment within the company’s geographical area of operation.
- Key Products per Segment: The report lists individual projects but doesn’t define “key products” in a segment-based manner.
- Geographic Segmentation: While the report highlights project locations (primarily in Punjab, with expansion into Ludhiana), it doesn’t provide a formal geographic breakdown of revenue or profitability.
In Conclusion:
The annual report lacks sufficient detail for a comprehensive analysis of AGI Infra Limited’s business segments. To obtain this information, you’d need additional disclosures from the company, investor presentations, industry reports, or possibly through direct contact with AGI Infra Limited’s investor relations department. The report’s focus is more on overall company performance than granular business segment reporting.
Risk Management #
Risk Assessment #
AGI Infra Limited’s annual report identifies several key risk factors, but doesn’t provide a structured risk assessment matrix with explicit severity and likelihood scores for each. We can, however, categorize the risks, describe them, and discuss potential impacts and mitigation strategies based on the information given. Note that the absence of a formal risk assessment framework from the company limits the precision of this analysis.
I. Categorization and Description of Key Risk Factors:
The risks can be grouped into the following categories:
A. Market Risks:
- Market Price Fluctuation: Real estate prices are cyclical and susceptible to changes in economic conditions, interest rates, and overall market sentiment. This impacts sales realizations and project valuations.
- Sales Volume: The number of units sold depends on market demand, competition, and the company’s ability to successfully market and sell its projects. Slow sales can lead to cash flow issues and affect profitability.
B. Operational Risks:
- Execution Risks: Delays and cost overruns can arise from labor shortages, material cost fluctuations, obtaining necessary approvals, weather conditions, and unforeseen project complications.
- Rental Realizations: For commercial projects, rental income depends on occupancy rates, tenant demand, and prevailing market rents. Vacancy rates and lower-than-expected rents negatively impact profitability.
C. Financial Risks:
- Land Acquisition and Development Costs: The cost of land and related development rights represents a substantial portion of project costs. Unexpected increases can erode profitability.
- Financing Costs: Securing adequate financing at favorable interest rates is crucial for project development. Higher interest rates or difficulty obtaining funding can severely impact profitability and even threaten project completion.
- Liquidity Risk: The ability to meet short-term financial obligations (e.g., payroll, material purchases) can be affected by delays in project completion, sales, and collection of receivables.
D. Regulatory and Legal Risks:
- Regulatory Hurdles and Approvals: Delays in obtaining necessary permits and approvals can significantly impact project timelines and profitability.
II. Potential Impact and Likelihood (Qualitative Assessment):
The report doesn’t quantify risk severity and likelihood, so we offer a qualitative assessment:
Severity: The impact of these risks could range from minor profit reductions to significant financial losses and project failures, depending on the scale and duration of the adverse event. Land acquisition cost increases and financing difficulties potentially have the most severe impact.
Likelihood: The likelihood of each risk varies. Market fluctuations are almost certain, while some operational risks (like unforeseen project complications) are less predictable.
III. Mitigation Strategies:
The report alludes to some mitigation strategies:
- Prudent Financial Management: Maintaining a conservative debt policy and adequate cash reserves helps buffer against market fluctuations and financing challenges.
- Strong Execution Capabilities: Employing experienced contractors, meticulous planning, and effective project management mitigates execution risks.
- Strategic Land Acquisition: Careful due diligence and market analysis are essential to manage land acquisition costs.
- Diversification: Expanding to new geographic areas and product types reduces the impact of market downturns in a specific region or product category.
IV. Trends:
- Increasing Construction Costs: A general upward trend in construction material prices is a persistent risk.
- Competition: The real estate market is competitive, and maintaining brand recognition and customer loyalty are vital for success.
- Regulatory Environment: Navigating regulatory requirements will continue to be a challenge, demanding proactive engagement with regulatory bodies and continuous adaptation to changing rules.
V. Limitations:
The report’s qualitative description of risks, without a formal risk assessment framework, prevents a definitive numerical assessment of likelihood and impact. A comprehensive risk management strategy would benefit from assigning specific quantitative measures to these risks for a better assessment and more targeted mitigation planning.
Strategic Overview #
Management Assessment #
AGI Infra Limited’s management outlines several key strategies, competitive advantages, market conditions, challenges, and opportunities in its annual report. Let’s summarize them:
I. Key Strategies:
- Geographical Expansion: The company is strategically expanding its operations to new cities in Punjab (already begun in Ludhiana) and plans to enter Mohali and New Chandigarh. This strategy aims to diversify risk and tap into new market opportunities.
- Product Diversification: While primarily focused on real estate development, AGI Infra Limited appears to be exploring opportunities to expand its product offerings within the sector (Residential and commercial properties).
- Innovation: The company mentions the adoption of cutting-edge technology, like MIVAN construction, to enhance construction efficiency and quality, potentially reducing costs and improving project timelines.
- Customer Focus: A strong emphasis is placed on understanding customer preferences and delivering high-quality projects that meet customer expectations. Maintaining strong customer relationships is paramount to the company’s brand reputation.
II. Competitive Advantages:
- Brand Reputation: AGI Infra Limited emphasizes its strong brand recognition and reputation, implying a competitive edge in attracting customers and potentially commanding higher prices.
- Execution Capabilities: The company highlights its proven track record of successfully completing projects, suggesting a strong execution capability and efficient project management.
- Strong Financial Position: The healthy financial position (low debt, strong cash flow) gives AGI Infra Limited flexibility and a competitive advantage in securing financing and capitalizing on opportunities during market downturns.
- Outsourcing Model: Using renowned architects and contractors provides scalability and access to expertise.
III. Market Conditions:
- Strong Long-Term Demand: Management expresses confidence in the long-term demand for real estate in India, driven by factors like GDP growth, increasing urbanization, and rising disposable incomes.
- Premium Segment Growth: The report suggests that the premium housing segment is likely to experience increased demand in the coming years.
IV. Challenges:
- Unanticipated Delays in Project Approvals: Bureaucratic hurdles and regulatory delays pose significant risks to project timelines and profitability.
- Labor Availability and Costs: Finding skilled labor at competitive prices is a significant challenge.
- Rising Construction Costs: Inflationary pressures on construction materials and labor continually impact project costs.
- Infrastructure Development: The growth and expansion of auxiliary infrastructure (roads, utilities) are essential to real estate projects and can influence project viability.
- Over-Regulation: An overly regulated environment presents challenges for navigating the permitting and compliance processes.
V. Opportunities:
- Growing Indian Economy: The ongoing growth of the Indian economy presents significant opportunities for the real estate sector.
- Increasing Disposable Incomes: Higher incomes lead to greater demand for housing and commercial spaces.
- Urbanization: The continuous migration to urban areas fuels the demand for housing and related infrastructure.
- Strategic Land Acquisitions: Acquiring suitable land parcels at favorable prices presents opportunities for future development.
- Expansion into New Markets: Moving to new cities in Punjab and beyond allows for diversification and access to new markets.
VI. Summary:
AGI Infra Limited’s management recognizes the long-term growth potential of the Indian real estate sector but acknowledges several significant challenges. Its strategies focus on managing risk through diversification, maintaining a strong financial position, leveraging technology for efficiency, and building a strong brand reputation based on quality execution. The ability to successfully navigate these challenges and capitalize on the opportunities will be key to the company’s future success.
ESG Ratings #
The provided annual report for AGI Infra Limited does not include ESG ratings from any recognized rating agencies. The report mentions some ESG-related initiatives (sustainable building practices, CSR activities), but it doesn’t provide any numerical ESG scores or ratings from organizations like MSCI, Sustainalytics, Refinitiv, or others that specialize in ESG assessments. To find ESG ratings for AGI Infra Limited, you would need to consult databases of ESG ratings from these agencies or look for this information on financial news websites that track ESG data for publicly listed companies.
ESG Initiatives #
AGI Infra Limited’s annual report provides limited detail on its ESG performance. While it mentions various initiatives, specific data and targets are often lacking. Here’s a summary based on the available information:
I. Environmental Initiatives:
The report highlights a commitment to environmentally sustainable practices, particularly in construction:
- Green Building Design: The company states that new and upcoming projects are designed to be compliant with green building standards. However, specific standards (e.g., LEED, GRI) aren’t mentioned, and no quantitative data (e.g., reduction in energy consumption or water usage) is provided to assess the effectiveness of these efforts.
- Rooftop Solar Power Generation: The report mentions rooftop solar power generation in at least one project, highlighting the use of renewable energy. But the scale of implementation (how many projects, total energy generated, etc.) remains unspecified.
II. Carbon Footprint:
The annual report does not disclose the company’s carbon footprint. This omission is a significant gap in environmental reporting, particularly given the company’s emphasis on green buildings. Quantitative data on greenhouse gas emissions is crucial for measuring environmental performance.
III. Social Initiatives:
AGI Infra Limited’s social initiatives are primarily reported under its Corporate Social Responsibility (CSR) activities:
- CSR Spending: The company spent ₹35 lakhs on CSR activities in FY2023-24 and transferred ₹47 lakhs to its unspent CSR account.
- CSR Focus Areas: The report lists some broad areas of CSR focus, including preventive healthcare, environmental sustainability, rural sports, education, and employment generation, However, concrete details on specific projects, their locations, beneficiaries, and impact metrics are absent. This lack of detail hinders assessing the effectiveness of these initiatives.
IV. Governance Practices:
The report provides information on governance practices, including:
- Board Composition and Structure: Details are given on the board of directors’ composition, including the number of independent directors and their respective committees.
- Board Meetings and Attendance: The number of board meetings held and director attendance are documented.
- Committees: The report outlines the existence and activities of the Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, and Corporate Social Responsibility Committee. However, the effectiveness of these committees is not directly assessed.
- Whistleblower Policy: A whistleblower policy is mentioned, but the process and any outcomes from this mechanism are not disclosed.
While these aspects demonstrate some aspects of governance, a more comprehensive report would include details such as the effectiveness of risk management, internal controls, and the audit process, along with specific measures for assessing the independence of the board of directors.
V. Sustainability Goals:
The annual report doesn’t specify any quantitative or time-bound sustainability goals. Setting measurable targets for carbon emissions reduction, energy efficiency improvements, or social impact is critical for demonstrating a serious commitment to sustainability. This lack of explicit targets makes it difficult to assess the company’s commitment to long-term sustainability.
In Summary:
While AGI Infra Limited’s annual report mentions various environmental and social initiatives and highlights some governance practices, the absence of specific data, targets, and impact measurements significantly limits the assessment of its overall ESG performance. A more comprehensive ESG report with quantified data and clearly defined sustainability goals is needed for a better understanding of the company’s commitment to environmental protection, social responsibility, and strong governance.
Additional Information #
Operational Metrics #
Based on the provided annual report for AGI Infra Limited:
R&D Expenditure: The report states that the expenditure incurred in Research and Development is Nil.
Employee Count: The report indicates that there are 283 permanent employees on the company’s payroll as of the reporting date.
Key Events #
Based on the provided annual report, the significant events during the fiscal year 2023-24 for AGI Infra Limited include:
High Revenue and Profitability: The company achieved its highest-ever sales and net profit, indicating strong performance within the real estate market.
Listing on the National Stock Exchange of India (NSE): A major achievement, expanding the company’s stock market presence beyond the Bombay Stock Exchange (BSE). This happened on July 15, 2024.
Changes in the Board of Directors: Several changes occurred on the Board: Mr. Balwinder Singh’s term as a Non-Executive Independent Director ended, and Mr. Parmod Kumar Sharma and Mr. Atul Mehta resigned from the board. Mr. Amrik Singh Chawla and Mr. Mohit Saluja were appointed as Non-Executive Independent Directors. Ms. Simran Kaur Josan was appointed as an Additional Director, subject to shareholder approval at the AGM.
Resignation and Reappointment of Company Secretary: Ms. Aarti Mahajan resigned as Company Secretary and Compliance Officer but was later reappointed.
Geographical Expansion: The initiation of a project in Ludhiana signals a strategic move to expand the company’s geographic reach beyond its traditional markets.
Adoption of MIVAN Construction: A significant technological shift adopted to enhance building efficiency, quality, and potentially reduce costs.
Payment of Interim Dividend: The payment of an interim dividend of ₹1 per share signifies a return to shareholders.
These events represent key developments that significantly impacted the company’s financial results, operations, corporate structure, and strategic direction during the fiscal year.
Audit Information #
Auditor’s Opinion:
The independent auditors, R.S. Kalra & Associates, Chartered Accountants, issued an unmodified (clean) opinion on both the consolidated and standalone Ind AS financial statements of AGI Infra Limited for the year ended March 31, 2024. This means the auditors found the financial statements to be presented fairly in accordance with Indian Accounting Standards (Ind AS) and other generally accepted accounting principles in India. They found the financial statements to give a true and fair view of the company’s financial position and performance.
Key Accounting Policies:
The company’s key accounting policies, as detailed in the notes to the financial statements, include:
Basis of Preparation: The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) and follow the historical cost convention, except for certain financial instruments measured at fair value.
Functional and Presentation Currency: Indian Rupees (INR)
Operating Cycle: Assets and liabilities are classified as current or non-current based on the company’s operating cycle.
Property, Plant, and Equipment: Reported at cost less accumulated depreciation and impairment losses. Depreciation is calculated using the written-down value method.
Depreciation: Depreciation is charged on the written-down value method, with varying useful lives assigned to different asset classes (buildings, furniture, equipment, vehicles, etc.).
Impairment of Non-Financial Assets: The company assesses its non-financial assets for impairment at each balance sheet date, using the recoverable amount (higher of fair value less costs of disposal and value in use).
Inventories: Inventories (work-in-progress, finished goods) are valued at the lower of cost and net realizable value.
Cash and Cash Equivalents: Include cash on hand, demand deposits, and short-term investments with original maturities of three months or less.
Taxation: Income tax expense includes current tax and deferred tax, calculated using enacted tax rates. Deferred tax assets and liabilities are recognized for temporary differences between carrying amounts and tax bases.
Revenue Recognition: Revenue from the sale of flats is recognized upon transfer of control. Revenue from other services is recognized when the right to receive payment arises and the amount can be reliably measured.
Employee Benefits: Employee benefit expenses include salaries, wages, provident fund, ESI, and gratuity (with a provision calculated based on actuarial valuations).
Borrowing Costs: Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized; others are expensed.
Earnings Per Share (EPS): Basic and diluted EPS are calculated in accordance with Ind AS.
Related Party Transactions: These are disclosed in accordance with Ind AS 24.
Provisions: Recognized when there’s a present obligation from a past event, it is probable an outflow of resources will be required, and a reliable estimate can be made.
Contingent Liabilities: Disclosed but not recognized unless probable and reliably measurable.
Financial Risk Management: The company describes its approach to managing credit risk, liquidity risk, and market risk.
These policies form the basis for the preparation of the company’s financial statements and are applied consistently across the reporting periods. The complete and detailed accounting policies are present in the notes to the financial statements in the report.