ZENSAR TECHNOLOGIES 2021-22 Annual Report Analysis

Wed, 6 Jul

ZENSAR TECHNOLOGIES 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.

ZENSAR TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 12.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.8% in FY22 as against 14.4% in FY21.
• Depreciation charges increased by 5.8% and finance costs decreased by 34.0% YoY, respectively.
• Other income grew by 41.4% YoY.
• Net profit for the year grew by 37.4% YoY.
• Net profit margins during the year grew from 8.1% in FY21 to 9.9% in FY22.

ZENSAR TECHNOLOGIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	37,814	42,438	12.2%
Other income	Rs m	1,180	1,669	41.4%
Total Revenues	Rs m	38,994	44,107	13.1%
Gross profit	Rs m	5,431	6,273	15.5%
Depreciation	Rs m	1,747	1,848	5.8%
Interest	Rs m	535	353	-34.0%
Profit before tax	Rs m	4,329	5,741	32.6%
Tax	Rs m	1,259	1,524	21.0%
Profit after tax	Rs m	3,070	4,217	37.4%
Gross profit margin	%	14.4	14.8
Effective tax rate	%	29.1	26.5
Net profit margin	%	8.1	9.9

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ZENSAR TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 8 billion as compared to Rs 7 billion in FY21, thereby witnessing an increase of 12.4%.
• Current assets rose 14% and stood at Rs 23 billion, while fixed assets rose 12% and stood at Rs 16 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 38 billion as against Rs 34 billion during FY21, thereby witnessing a growth of 13%.

ZENSAR TECHNOLOGIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	23,275	26,643	14.5
Current Liabilities	Rs m	7,384	8,299	12.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	33,843	38,172	12.8
Current assets	Rs m	19,929	22,627	13.5
Fixed Assets	Rs m	13,914	15,545	11.7
Total Assets	Rs m	33,843	38,172	12.8

ZENSAR TECHNOLOGIES Cash Flow Statement Analysis

• ZENSAR TECHNOLOGIES's cash flow from operating activities (CFO) during FY22 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -168 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -2 billion, an improvement of 61% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 2 billion from the Rs -1 billion net cash flows seen during FY21.

ZENSAR TECHNOLOGIES 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	8,580	3,347	-61.0%
Cash Flow from Investing Activities	Rs m	-5,283	-168	-
Cash Flow from Financing Activities	Rs m	-4,669	-1,826	-
Net Cash Flow	Rs m	-1,391	1,562	-

Current Valuations for ZENSAR TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.6, an improvement from the EPS of Rs 13.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 269.6, stands at 14.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 15.7 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	167.6	187.6
TTM Earnings per share	Rs	13.6	18.6
Diluted earnings per share	Rs	13.6	18.6
Price to Cash Flow	x	12.9	15.7
TTM P/E ratio	x	20.2	14.5
Price / Book Value ratio	x	2.1	3.6
Market Cap	Rs m	47,882	95,197
Dividends per share (Unadj.)	Rs	3.6	5.0

Ratio Analysis for ZENSAR TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.7x during FY22, from 2.7x 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 17.3x during FY22, from 9.1x 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 15.8% during FY22, from 13.2% 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 22.9% during FY22, from 20.9% 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 12.0% during FY22, from 10.7% 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	2.7	2.7
Debtors’ Days	Days	57	69
Interest coverage	x	9.1	17.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.7	12.0
Return on equity	%	13.2	15.8
Return on capital employed	%	20.9	22.9

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

ZENSAR TECHNOLOGIES Share Price Performance

Over the last one year, ZENSAR TECHNOLOGIES share price has moved down from Rs 333.5 to Rs 269.6, registering a loss of Rs 64.0 or around 19.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,511.5 (up 1.0%). Over the last one year it has moved down from 29,714.5 to 28,511.5, a loss of 1,203 points (down 4.0%).

Overall, the S&P BSE SENSEX is up 1.6% over the year.

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

Read: Latest Annual Report Analysis of ZENSAR TECHNOLOGIES