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Javedan Corporation Limited, a property developer, announced its financial results for the fiscal year 2022-23. The company’s net revenue shot up 235.9% to Rs16.8 billion from Rs5 billion in FY22. The impressive financial results reported a significant boost in its gross profit, which ballooned 274.02% to Rs9.03 billion in FY23 from Rs2.415 billion registered in FY22. As a result of the increase in sales and gross profit, the company’s gross margin improved to 53.68% in FY23 from 48.21% in FY22.

On the company’s expense side, the marketing and selling expenses grew by 181.84% to Rs92.59 million in FY23 from Rs32.8 million in FY22. However, the administrative expenses stood at Rs481.26 million in FY23, which was 5.20% higher than the Rs457.56 million in FY22. The company earned Rs379.24 million in other income in FY23 compared to Rs303.68 million in FY22, constituting a growth of 24.85%.

Notably, the company managed a profit-before-tax of Rs6.96 billion in FY23 compared to Rs1.75 billion in FY22, posting a substantial growth of over 296%. After accounting for taxes, the company posted a net profit of Rs6.74 billion in FY23, which was higher by a huge 347.9% than Rs1.50 billion recorded in FY22. This surge in profits translated into remarkable earnings per share of Rs17.70 for FY23, a significant improvement from Rs3.95 recorded in FY22.

Profitability trend analysis

The company’s revenue gradually reduced from Rs2.47 billion in 2018 to Rs1.047 billion in 2021, before moving upward to Rs4.34 billion in 2022 and then soaring to Rs16.8 billion in 2023. A similar pattern was observed in the gross profit, with the highest of Rs9.03 billion posted in 2023 and the lowest of Rs782.37 million recorded in 2021. The net profitability varied over the years, moving down from Rs703.7 million in 2018 to Rs236.7 million in 2020. However, it regained upward trajectory in 2021, clocking in at Rs331.24 million, before rocketing to Rs6.7 billion in 2023.

Assets equity and liabilities analysis

The current and non-current assets of Javedan Corporation steadily increased over time, showing a strong financial position that allowed the business to pay off its debts and reinvest to increase revenue. Similarly, the results show a progressive rise in borrowing as well as an increase in the company's current and non-current liabilities.

Liquidity ratios analysis

The current ratio evaluates how well a business uses its current assets to pay off its short-term debt. The company maintained a current ratio above 3.1, demonstrating its strong liquidity position to meet its current liabilities. The year 2019 saw the highest current ratio of 4.51 and the lowest of 3.1 in 2018. A company's debt as a percentage of its shareholders’ equity is measured by the debt-to-equity ratio. Less risk is associated with a company whose debt-to-equity ratio is less than 1. Over the years, Javedan Corporation displayed a value of less than 1, ranging from 0.26 in 2018 to 0.39 in 2022. Likewise, the total debt ratio of the company was less than 1, indicating that there were more assets than liabilities.

Credit: INP-WealthPk