HEXAWARE TECHNOLOGIES 2017-18 Annual Report Analysis

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HEXAWARE TECHNOLOGIES 2017-18 Annual Report Analysis
Tue, 2 Apr

HEXAWARE TECHNOLOGIES has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

HEXAWARE TECHNOLOGIES Income Statement Analysis

  • Operating income during the year rose 17.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 11.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.8% in CY18 as against 17.8% in CY17.
  • Depreciation charges increased by 2.8% and finance costs decreased by 66.7% YoY, respectively.
  • Other income grew by 194.7% YoY.
  • Net profit for the year grew by 16.8% YoY.
  • Net profit margins during the year declined from 12.7% in CY17 to 12.5% in CY18.

HEXAWARE TECHNOLOGIES Income Statement 2017-18

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change
Net Sales Rs m 39,420 46,478 17.9%
Other income Rs m 36 106 194.7%
Total Revenues Rs m 39,456 46,583 18.1%
Gross profit Rs m 7,001 7,810 11.5%
Depreciation Rs m 633 651 2.8%
Interest Rs m 1 0 -66.7%
Profit before tax Rs m 6,403 7,264 13.4%
Tax Rs m 1,411 1,431 1.5%
Profit after tax Rs m 4,995 5,835 16.8%
Gross profit margin % 17.8 16.8
Effective tax rate % 22.0 19.7
Net profit margin % 12.7 12.5
* 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 CY18 stood at Rs 7 billion as compared to Rs 5 billion in CY17, thereby witnessing an increase of 37.5%.
  • Current assets rose 37% and stood at Rs 20 billion, while fixed assets rose 0% and stood at Rs 8 billion in CY18.
  • Overall, the total assets and liabilities for CY18 stood at Rs 31 billion as against Rs 25 billion during CY17, thereby witnessing a growth of 23%.

HEXAWARE TECHNOLOGIES Balance Sheet as on December 2018

No. of Mths Year Ending 12 Dec-17* 12 Dec-18* % Change
Networth Rs m 20,073 23,919 19.2
 
Current Liabilities Rs m 5,170 7,110 37.5
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 25,453 31,335 23.1
 
Current assets Rs m 14,535 19,869 36.7
Fixed Assets Rs m 7,977 7,986 0.1
Total Assets Rs m 25,453 31,335 23.1
* 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 CY18 stood at Rs 5 billion, an improvement of 15.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during CY18 stood at Rs -455 million on a YoY basis.
  • Cash flow from financial activities (CFF) during CY18 stood at Rs -3 billion, an improvement of 11% on a YoY basis.
  • Overall, net cash flows for the company during CY18 stood at Rs 3 billion from the Rs 1 billion net cash flows seen during CY17.

HEXAWARE TECHNOLOGIES Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Dec-17 Dec-18
Cash Flow from Operating Activities Rs m 4,762 5,487 15.2%
Cash Flow from Investing Activities Rs m -938 -455 -
Cash Flow from Financing Activities Rs m -2,796 -2,502 -
Net Cash Flow Rs m 1,021 2,903 184.3%
* 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 19.6, an improvement from the EPS of Rs 16.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 372.8, stands at 19.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 5.3 times, while the price to sales ratio stands at 2.7 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Dec-17* 12 Dec-18*
Sales per share (Unadj.) Rs 132.8 156.3
TTM Earnings per share Rs 16.8 19.6
Diluted earnings per share Rs 16.6 19.4
Price to Cash Flow x 19.7 17.3
TTM P/E ratio x 19.0 19.2
Price / Book Value ratio x 4.0 5.3
Market Cap Rs m 110,647 112,258
Dividends per share (Unadj.) Rs 4.0 8.5
* 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 deteriorated and stood at 2.8x during CY18, from 2.8x during CY17. 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 18,161.5x during CY18, from 5,336.9x during CY17. 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 declined and down at 24.4% during CY18, from 24.9% during CY18. 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 30.4% during CY18, from 31.9% during CY17. 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 declined and down at 18.6% during CY18, from 19.6% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Dec-17* 12 Dec-18*
Current ratio x 2.8 2.8
Debtors’ Days Days 50 63
Interest coverage x 5,336.9 18,161.5
Debt to equity ratio x 0.0 0.0
Return on assets % 19.6 18.6
Return on equity % 24.9 24.4
Return on capital employed % 31.9 30.4
* 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 413.7 to Rs 372.8, registering a loss of Rs 40.9 or around 9.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,641.1 (up 0.7%). Over the last one year it has moved up from 12,254.9 to 15,641.1, a gain of 3,386 points (up 27.6%).

Overall, the S&P BSE SENSEX is up 17.0% over the year.

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

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