ECLERX SERVICES 2021-22 Annual Report Analysis

Mon, 5 Sep

ECLERX SERVICES has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ECLERX SERVICES Income Statement Analysis

• Operating income during the year rose 38.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 47.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 30.6% in FY22 as against 28.7% in FY21.
• Depreciation charges increased by 26.5% and finance costs increased by 6.3% YoY, respectively.
• Other income declined by 28.5% YoY.
• Net profit for the year grew by 47.7% YoY.
• Net profit margins during the year grew from 18.1% in FY21 to 19.3% in FY22.

ECLERX SERVICES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	15,645	21,603	38.1%
Other income	Rs m	345	246	-28.5%
Total Revenues	Rs m	15,989	21,850	36.7%
Gross profit	Rs m	4,492	6,618	47.3%
Depreciation	Rs m	816	1,032	26.5%
Interest	Rs m	214	228	6.3%
Profit before tax	Rs m	3,806	5,605	47.3%
Tax	Rs m	978	1,427	45.9%
Profit after tax	Rs m	2,828	4,178	47.7%
Gross profit margin	%	28.7	30.6
Effective tax rate	%	25.7	25.5
Net profit margin	%	18.1	19.3

ECLERX SERVICES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 3 billion as compared to Rs 3 billion in FY21, thereby witnessing an increase of 5.6%.
• Long-term debt down at Rs 1 million as compared to Rs 2 million during FY21, a fall of 70.8%.
• Current assets rose 6% and stood at Rs 13 billion, while fixed assets fell 1% and stood at Rs 8 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 20 billion as against Rs 20 billion during FY21, thereby witnessing a growth of 3%.

ECLERX SERVICES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	14,863	15,569	4.8
Current Liabilities	Rs m	2,858	3,019	5.6
Long-term Debt	Rs m	2	1	-70.8
Total Liabilities	Rs m	19,742	20,319	2.9
Current assets	Rs m	12,033	12,699	5.5
Fixed Assets	Rs m	7,708	7,620	-1.1
Total Assets	Rs m	19,742	20,319	2.9

ECLERX SERVICES Cash Flow Statement Analysis

• ECLERX SERVICES's cash flow from operating activities (CFO) during FY22 stood at Rs 4 billion, an improvement of 22.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 380 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 713 million from the Rs 2 billion net cash flows seen during FY21.

ECLERX SERVICES Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	3,646	4,482	22.9%
Cash Flow from Investing Activities	Rs m	-45	380	-
Cash Flow from Financing Activities	Rs m	-1,883	-4,163	-
Net Cash Flow	Rs m	1,745	713	-59.1%

Current Valuations for ECLERX SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 126.2, an improvement from the EPS of Rs 83.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,159.9, stands at 17.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 3.3 times.
• The company's price to cash flow (P/CF) ratio stood at 12.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	460.0	652.7
TTM Earnings per share	Rs	83.2	126.2
Diluted earnings per share	Rs	83.6	123.5
Price to Cash Flow	x	10.3	12.9
TTM P/E ratio	x	13.2	17.2
Price / Book Value ratio	x	1.7	4.3
Market Cap	Rs m	25,266	67,034
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for ECLERX SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 4.2x during FY22, from 4.2x during FY21. 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 25.6x during FY22, from 18.8x during FY21. 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 26.8% during FY22, from 19.0% during FY22. 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 37.5% during FY22, from 27.0% during FY21. 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 21.7% during FY22, from 15.4% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	4.2	4.2
Debtors’ Days	Days	68	56
Interest coverage	x	18.8	25.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.4	21.7
Return on equity	%	19.0	26.8
Return on capital employed	%	27.0	37.5

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 down from Rs 2,242.3 to Rs 2,159.9, registering a loss of Rs 82.4 or around 3.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,404.7 (up 0.4%). Over the last one year it has moved down from 34,409.9 to 28,404.7, a loss of 6,005 points (down 17.5%).

Overall, the S&P BSE SENSEX is up 3.4% over the year.

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

Read: Latest Annual Report Analysis of ECLERX SERVICES