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ECLERX SERVICES 2017-18 Annual Report Analysis

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ECLERX SERVICES 2017-18 Annual Report Analysis
Thu, 20 Dec

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

ECLERX SERVICES Income Statement Analysis

  • Operating income during the year rose 2.6% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 20.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 26.8% in FY18 as against 34.5% in FY17.
  • Depreciation charges decreased by 6.9% and finance costs increased by 33.3% YoY, respectively.
  • Other income grew by 42.7% YoY.
  • Net profit for the year declined by 18.1% YoY.
  • Net profit margins during the year declined from 26.1% in FY17 to 20.6% in FY18.

ECLERX SERVICES Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 13,300 13,651 2.6%
Other income Rs m 282 402 42.7%
Total Revenues Rs m 13,582 14,053 3.5%
Gross profit Rs m 4,595 3,663 -20.3%
Depreciation Rs m 518 482 -6.9%
Interest Rs m 0 0 33.3%
Profit before tax Rs m 4,358 3,583 -17.8%
Tax Rs m 819 896 9.4%
Profit after tax Rs m 3,539 2,899 -18.1%
Gross profit margin % 34.5 26.8
Effective tax rate % 18.8 25.0
Net profit margin % 26.1 20.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ECLERX SERVICES Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 1 billion in FY17, thereby witnessing an increase of 19.5%.
  • Long-term debt down at Rs 6 million as compared to Rs 7 million during FY17, a fall of 10.4%.
  • Current assets rose 3% and stood at Rs 10 billion, while fixed assets rose 5% and stood at Rs 3 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 14 billion during FY17, thereby witnessing a growth of 2%.

ECLERX SERVICES Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 12,154 12,048 -0.9
 
Current Liabilities Rs m 1,362 1,628 19.5
Long-term Debt Rs m 7 6 -10.4
Total Liabilities Rs m 13,982 14,310 2.3
 
Current assets Rs m 10,121 10,375 2.5
Fixed Assets Rs m 3,269 3,435 5.1
Total Assets Rs m 13,982 14,310 2.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ECLERX SERVICES Cash Flow Statement Analysis

  • ECLERX SERVICES's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 170 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -3 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 278 million from the Rs -1 billion net cash flows seen during FY17.

ECLERX SERVICES Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 3,124 3,050 -2.4%
Cash Flow from Investing Activities Rs m -1,695 170 -
Cash Flow from Financing Activities Rs m -2,453 -3,035 -
Net Cash Flow Rs m -1,082 278 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for ECLERX SERVICES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 76.0, an decline from the EPS of Rs 89.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,093.0, stands at 17.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.4 times, while the price to sales ratio stands at 3.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 334.9 357.9
TTM Earnings per share Rs 89.1 76.0
Diluted earnings per share Rs 87.6 71.8
Price to Cash Flow x 10.7 13.1
TTM P/E ratio x 17.2 17.5
Price / Book Value ratio x 5.0 4.4
Market Cap Rs m 43,403 44,157
Dividends per share (Unadj.) Rs 1.0 1.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for ECLERX SERVICES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 6.4x during FY18, from 7.4x during FY17. 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 8,957.5x during FY18, from 14,528.7x during FY17. 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 24.1% during FY18, from 29.1% during FY18. 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 31.5% during FY18, from 35.8% during FY17. 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 20.3% during FY18, from 25.3% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 7.4 6.4
Debtors’ Days Days 59 62
Interest coverage x 14,528.7 8,957.5
Debt to equity ratio x 0.0 0.0
Return on assets % 25.3 20.3
Return on equity % 29.1 24.1
Return on capital employed % 35.8 31.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

ECLERX SERVICES Share Price Performance

Over the last one year, ECLERX SERVICES share price has moved up from Rs 1,356.9 to Rs 1,093.0, registering a loss of Rs 263.9 or around 19.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 14,259.0 (down 0.3%). Over the last one year it has moved up from 10,917.7 to 14,259.0, a gain of 3,341 points (up 30.6%).

Overall, the S&P BSE SENSEX is up 7.5% over the year.

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

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For the quarter ended December 2018, ECLERX SERVICES has posted a net profit of Rs 390 m (down 32.2% YoY). Sales on the other hand came in at Rs 4 bn (up 5.2% YoY). Read on for a complete analysis of ECLERX SERVICES's quarterly results.

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