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MPHASIS 2018-19 Annual Report Analysis

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MPHASIS 2018-19 Annual Report Analysis
Wed, 3 Jul

MPHASIS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

MPHASIS Income Statement Analysis

  • Operating income during the year rose 18.1% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 24.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.1% in FY19 as against 16.2% in FY18.
  • Depreciation charges increased by 7.1% and finance costs increased by 33.6% YoY, respectively.
  • Other income grew by 9.0% YoY.
  • Net profit for the year grew by 28.2% YoY.
  • Net profit margins during the year grew from 12.5% in FY18 to 13.6% in FY19.

MPHASIS Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 65,458 77,310 18.1%
Other income Rs m 1,621 1,767 9.0%
Total Revenues Rs m 67,079 79,077 17.9%
Gross profit Rs m 10,624 13,238 24.6%
Depreciation Rs m 708 758 7.1%
Interest Rs m 130 174 33.6%
Profit before tax Rs m 11,407 14,073 23.4%
Tax Rs m 2,901 3,340 15.1%
Profit after tax Rs m 8,375 10,734 28.2%
Gross profit margin % 16.2 17.1
Effective tax rate % 25.4 23.7
Net profit margin % 12.5 13.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MPHASIS Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 20 billion as compared to Rs 14 billion in FY18, thereby witnessing an increase of 42.2%.
  • Current assets rose 4% and stood at Rs 41 billion, while fixed assets rose 15% and stood at Rs 22 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 74 billion as against Rs 70 billion during FY18, thereby witnessing a growth of 6%.

MPHASIS Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 54,818 52,498 -4.2
 
Current Liabilities Rs m 14,020 19,937 42.2
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 69,853 73,711 5.5
 
Current assets Rs m 39,460 41,031 4.0
Fixed Assets Rs m 18,863 21,727 15.2
Total Assets Rs m 69,853 73,711 5.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



MPHASIS Cash Flow Statement Analysis

  • MPHASIS's cash flow from operating activities (CFO) during FY19 stood at Rs 9 billion, an improvement of 31.3% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs 3 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -13 billion, an improvement of 3% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -1 billion from the Rs -1 billion net cash flows seen during FY18.

MPHASIS Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 7,233 9,497 31.3%
Cash Flow from Investing Activities Rs m 4,925 2,893 -41.3%
Cash Flow from Financing Activities Rs m -13,797 -13,418 -
Net Cash Flow Rs m -1,491 -1,122 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for MPHASIS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.6, an improvement from the EPS of Rs 43.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 983.4, stands at 19.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.8 times, while the price to sales ratio stands at 2.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 18.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 338.7 415.2
TTM Earnings per share Rs 43.3 57.6
Diluted earnings per share Rs 39.9 51.1
Price to Cash Flow x 20.9 18.0
TTM P/E ratio x 17.7 19.3
Price / Book Value ratio x 2.6 3.8
Market Cap Rs m 190,052 206,652
Dividends per share (Unadj.) Rs 20.0 27.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for MPHASIS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY19, from 2.8x during FY18. 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 82.0x during FY19, from 88.7x during FY18. 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 20.4% during FY19, from 15.3% during FY19. 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 27.1% during FY19, from 20.8% during FY18. 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 14.8% during FY19, from 12.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 2.8 2.1
Debtors’ Days Days 45 45
Interest coverage x 88.7 82.0
Debt to equity ratio x 0.0 0.0
Return on assets % 12.2 14.8
Return on equity % 15.3 20.4
Return on capital employed % 20.8 27.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

MPHASIS Share Price Performance

Over the last one year, MPHASIS share price has moved up from Rs 1,098.9 to Rs 983.4, registering a loss of Rs 115.5 or around 10.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,747.3 (down 0.2%). Over the last one year it has moved up from 14,192.9 to 15,747.3, a gain of 1,554 points (up 11.0%).

Overall, the S&P BSE SENSEX is up 13.0% over the year.

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

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MPHASIS Announces Quarterly Results (1QFY20); Net Profit Up 2.5% (Quarterly Result Update)

Jul 29, 2019 | Updated on Jul 29, 2019

For the quarter ended June 2019, MPHASIS has posted a net profit of Rs 3 bn (up 2.5% YoY). Sales on the other hand came in at Rs 21 bn (up 13.3% YoY). Read on for a complete analysis of MPHASIS's quarterly results.

MPHASIS Announces Quarterly Results (4QFY19); Net Profit Up 12.0% (Quarterly Result Update)

May 30, 2019 | Updated on May 30, 2019

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