CIGNITI TECHNOLOGIES 2022-23 Annual Report Analysis

Thu, 25 May

CIGNITI TECHNOLOGIES has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

CIGNITI TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 32.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 85.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.4% in FY23 as against 10.3% in FY22.
• Depreciation charges increased by 63.3% and finance costs decreased by 12.9% YoY, respectively.
• Other income grew by 3.3% YoY.
• Net profit for the year grew by 83.5% YoY.
• Net profit margins during the year grew from 7.4% in FY22 to 10.2% in FY23.

CIGNITI TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	12,418	16,476	32.7%
Other income	Rs m	142	147	3.3%
Total Revenues	Rs m	12,560	16,623	32.3%
Gross profit	Rs m	1,285	2,377	85.0%
Depreciation	Rs m	162	264	63.3%
Interest	Rs m	50	44	-12.9%
Profit before tax	Rs m	1,215	2,216	82.4%
Tax	Rs m	298	533	79.1%
Profit after tax	Rs m	917	1,683	83.5%
Gross profit margin	%	10.3	14.4
Effective tax rate	%	24.5	24.1
Net profit margin	%	7.4	10.2

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CIGNITI TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 9.5%.
• Current assets rose 22% and stood at Rs 7 billion, while fixed assets rose 20% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 8 billion as against Rs 7 billion during FY22, thereby witnessing a growth of 21%.

CIGNITI TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,587	5,852	27.6
Current Liabilities	Rs m	1,969	2,156	9.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	6,919	8,401	21.4
Current assets	Rs m	5,564	6,775	21.8
Fixed Assets	Rs m	1,356	1,626	19.9
Total Assets	Rs m	6,919	8,401	21.4

CIGNITI TECHNOLOGIES Cash Flow Statement Analysis

• CIGNITI TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 311.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -565 million, an improvement of 7.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -688 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 353 million from the Rs -315 million net cash flows seen during FY22.

CIGNITI TECHNOLOGIES Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	382	1,572	311.3%
Cash Flow from Investing Activities	Rs m	-524	-565	-
Cash Flow from Financing Activities	Rs m	-197	-688	-
Net Cash Flow	Rs m	-315	353	-

Current Valuations for CIGNITI TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 61.7, an improvement from the EPS of Rs 32.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 845.8, stands at 13.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.9 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 8.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	442.7	604.4
TTM Earnings per share	Rs	32.7	61.7
Diluted earnings per share	Rs	33.7	61.8
Price to Cash Flow	x	10.8	8.0
TTM P/E ratio	x	12.7	13.7
Price / Book Value ratio	x	3.0	2.7
Market Cap	Rs m	13,934	15,567
Dividends per share (Unadj.)	Rs	2.5	5.5

Ratio Analysis for CIGNITI TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.1x during FY23, from 2.8x during FY22. 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 51.4x during FY23, from 25.1x during FY22. 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 28.8% during FY23, from 20.0% during FY23. 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 38.6% during FY23, from 27.6% during FY22. 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 20.6% during FY23, from 14.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.8	3.1
Debtors’ Days	Days	667	565
Interest coverage	x	25.1	51.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.0	20.6
Return on equity	%	20.0	28.8
Return on capital employed	%	27.6	38.6

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 418.5 to Rs 845.8, registering a gain of Rs 427.3 or around 102.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,671.8 (down 0.4%). Over the last one year it has moved up from 28,096.7 to 28,671.8, a gain of 575 points (up 2.0%).

Overall, the S&P BSE SENSEX is up 13.4% over the year.

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