CIGNITI TECHNOLOGIES 2020-21 Annual Report Analysis

Wed, 31 Mar

CIGNITI TECHNOLOGIES has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

CIGNITI TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 2.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.2% in FY21 as against 14.7% in FY20.
• Depreciation charges increased by 6.9% and finance costs decreased by 30.1% YoY, respectively.
• Other income declined by 39.2% YoY.
• Net profit for the year declined by 13.4% YoY.
• Net profit margins during the year declined from 13.9% in FY20 to 11.8% in FY21.

CIGNITI TECHNOLOGIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	8,720	8,965	2.8%
Other income	Rs m	225	137	-39.2%
Total Revenues	Rs m	8,944	9,102	1.8%
Gross profit	Rs m	1,279	1,453	13.6%
Depreciation	Rs m	115	123	6.9%
Interest	Rs m	80	56	-30.1%
Profit before tax	Rs m	1,308	1,411	7.8%
Tax	Rs m	92	357	286.4%
Profit after tax	Rs m	1,216	1,053	-13.4%
Gross profit margin	%	14.7	16.2
Effective tax rate	%	7.1	25.3
Net profit margin	%	13.9	11.8

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CIGNITI TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 1 billion as compared to Rs 2 billion in FY20, thereby witnessing an decrease of -27.1%.
• Current assets rose 16% and stood at Rs 4 billion, while fixed assets fell 11% and stood at Rs 983 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 5 billion as against Rs 5 billion during FY20, thereby witnessing a growth of 10%.

CIGNITI TECHNOLOGIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	2,620	3,709	41.6
Current Liabilities	Rs m	1,741	1,269	-27.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	4,799	5,268	9.8
Current assets	Rs m	3,693	4,285	16.0
Fixed Assets	Rs m	1,106	983	-11.1
Total Assets	Rs m	4,799	5,268	9.8

CIGNITI TECHNOLOGIES Cash Flow Statement Analysis

• CIGNITI TECHNOLOGIES's cash flow from operating activities (CFO) during FY21 stood at Rs 1 billion, an improvement of 67.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -439 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -143 million on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 122 million from the Rs -739 million net cash flows seen during FY20.

CIGNITI TECHNOLOGIES Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	866	1,449	67.3%
Cash Flow from Investing Activities	Rs m	-1,362	-439	-
Cash Flow from Financing Activities	Rs m	-126	-143	-
Net Cash Flow	Rs m	-739	122	-

Current Valuations for CIGNITI TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 37.6, an decline from the EPS of Rs 43.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 314.4, stands at 8.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 8.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	313.1	320.0
TTM Earnings per share	Rs	43.7	37.6
Diluted earnings per share	Rs	43.3	37.6
Price to Cash Flow	x	4.1	8.1
TTM P/E ratio	x	4.5	8.4
Price / Book Value ratio	x	3.1	2.6
Market Cap	Rs m	8,075	9,542
Dividends per share (Unadj.)	Rs	0.0	2.5

Ratio Analysis for CIGNITI TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.4x during FY21, from 2.1x during FY20. 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 26.2x during FY21, from 17.4x during FY20. 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 28.4% during FY21, from 46.4% during FY21. 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 39.5% during FY21, from 53.0% during FY20. 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 21.1% during FY21, from 27.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	2.1	3.4
Debtors’ Days	Days	688	642
Interest coverage	x	17.4	26.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	27.0	21.1
Return on equity	%	46.4	28.4
Return on capital employed	%	53.0	39.5

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

CIGNITI TECHNOLOGIES Share Price Performance

Over the last one year, CIGNITI TECHNOLOGIES share price has moved up from Rs 194.6 to Rs 314.4, registering a gain of Rs 119.8 or around 61.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of CIGNITI TECHNOLOGIES