HEXAWARE TECHNOLOGIES 2016-17 Annual Report Analysis

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HEXAWARE TECHNOLOGIES 2016-17 Annual Report Analysis
Mon, 18 Mar

HEXAWARE TECHNOLOGIES has announced its results for the year ended December 2017. Let us have a look at the detailed performance review of the company during FY16-17.

HEXAWARE TECHNOLOGIES Income Statement Analysis

  • Operating income during the year rose 11.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 14.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.8% in CY17 as against 17.3% in CY16.
  • Depreciation charges increased by 14.5% and finance costs decreased by 14.3% YoY, respectively.
  • Other income declined by 6.8% YoY.
  • Net profit for the year grew by 19.2% YoY.
  • Net profit margins during the year grew from 11.8% in CY16 to 12.7% in CY17.

HEXAWARE TECHNOLOGIES Income Statement 2016-17

No. of Mths Year Ending 12 Dec-16* 12 Dec-17* % Change
Net Sales Rs m 35,349 39,420 11.5%
Other income Rs m 38 36 -6.8%
Total Revenues Rs m 35,387 39,456 11.5%
Gross profit Rs m 6,120 7,001 14.4%
Depreciation Rs m 553 633 14.5%
Interest Rs m 1 1 -14.3%
Profit before tax Rs m 5,604 6,403 14.3%
Tax Rs m 1,412 1,411 -0.1%
Profit after tax Rs m 4,192 4,995 19.2%
Gross profit margin % 17.3 17.8
Effective tax rate % 25.2 22.0
Net profit margin % 11.8 12.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HEXAWARE TECHNOLOGIES Balance Sheet Analysis

  • The company's current liabilities during CY17 down at Rs 5 billion as compared to Rs 5 billion in CY16, thereby witnessing an decrease of -4.3%.
  • Current assets rose 18% and stood at Rs 15 billion, while fixed assets fell 7% and stood at Rs 8 billion in CY17.
  • Overall, the total assets and liabilities for CY17 stood at Rs 25 billion as against Rs 23 billion during CY16, thereby witnessing a growth of 10%.

HEXAWARE TECHNOLOGIES Balance Sheet as on December 2017

No. of Mths Year Ending 12 Dec-16* 12 Dec-17* % Change
Networth Rs m 17,409 20,073 15.3
 
Current Liabilities Rs m 5,401 5,170 -4.3
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 23,110 25,453 10.1
 
Current assets Rs m 12,333 14,535 17.9
Fixed Assets Rs m 8,557 7,977 -6.8
Total Assets Rs m 23,110 25,453 10.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HEXAWARE TECHNOLOGIES Cash Flow Statement Analysis

  • HEXAWARE TECHNOLOGIES's cash flow from operating activities (CFO) during CY17 stood at Rs 5 billion, an improvement of 0.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during CY17 stood at Rs -938 million on a YoY basis.
  • Cash flow from financial activities (CFF) during CY17 stood at Rs -3 billion on a YoY basis.
  • Overall, net cash flows for the company during CY17 stood at Rs 1 billion from the Rs 262 million net cash flows seen during CY16.

HEXAWARE TECHNOLOGIES Cash Flow Statement 2016-17

Particulars No. of months 12 12 % Change
Year Ending Dec-16 Dec-17
Cash Flow from Operating Activities Rs m 4,730 4,762 0.7%
Cash Flow from Investing Activities Rs m -1,999 -938 -
Cash Flow from Financing Activities Rs m -2,494 -2,796 -
Net Cash Flow Rs m 262 1,021 289.8%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HEXAWARE TECHNOLOGIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.8, an improvement from the EPS of Rs 13.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 342.5, stands at 17.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 2.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 18.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Dec-16* 12 Dec-17*
Sales per share (Unadj.) Rs 117.0 132.8
TTM Earnings per share Rs 13.9 16.8
Diluted earnings per share Rs 13.9 16.6
Price to Cash Flow x 21.8 18.3
TTM P/E ratio x 17.7 17.7
Price / Book Value ratio x 3.9 4.0
Market Cap Rs m 103,445 103,134
Dividends per share (Unadj.) Rs 5.5 4.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HEXAWARE TECHNOLOGIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.8x during CY17, from 2.3x during CY16. 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 improved and stood at 5,336.9x during CY17, from 4,003.9x during CY16. 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 24.9% during CY17, from 24.1% during CY17. 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 31.9% during CY17, from 32.2% during CY16. 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 19.6% during CY17, from 18.1% during CY16. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Dec-16* 12 Dec-17*
Current ratio x 2.3 2.8
Debtors’ Days Days 45 50
Interest coverage x 4,003.9 5,336.9
Debt to equity ratio x 0.0 0.0
Return on assets % 18.1 19.6
Return on equity % 24.1 24.9
Return on capital employed % 32.2 31.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HEXAWARE TECHNOLOGIES Share Price Performance

Over the last one year, HEXAWARE TECHNOLOGIES share price has moved up from Rs 370.1 to Rs 342.5, registering a loss of Rs 27.6 or around 7.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,169.9 (up 0.1%). Over the last one year it has moved up from 12,317.8 to 15,169.9, a gain of 2,852 points (up 23.2%).

Overall, the S&P BSE SENSEX is up 13.2% over the year.

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

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