ZENSAR TECHNOLOGIES 2022-23 Annual Report Analysis

Wed, 19 Jul

ZENSAR 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.

ZENSAR TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 14.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.1% in FY23 as against 14.8% in FY22.
• Depreciation charges decreased by 1.0% and finance costs decreased by 23.5% YoY, respectively.
• Other income declined by 29.7% YoY.
• Net profit for the year declined by 22.3% YoY.
• Net profit margins during the year declined from 9.9% in FY22 to 6.8% in FY23.

ZENSAR TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	42,438	48,482	14.2%
Other income	Rs m	1,682	1,183	-29.7%
Total Revenues	Rs m	44,120	49,665	12.6%
Gross profit	Rs m	6,273	5,368	-14.4%
Depreciation	Rs m	1,848	1,830	-1.0%
Interest	Rs m	366	280	-23.5%
Profit before tax	Rs m	5,741	4,441	-22.6%
Tax	Rs m	1,524	1,165	-23.6%
Profit after tax	Rs m	4,217	3,276	-22.3%
Gross profit margin	%	14.8	11.1
Effective tax rate	%	26.5	26.2
Net profit margin	%	9.9	6.8

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ZENSAR TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 9 billion as compared to Rs 8 billion in FY22, thereby witnessing an increase of 3.8%.
• Current assets rose 3% and stood at Rs 23 billion, while fixed assets rose 12% and stood at Rs 17 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 40 billion as against Rs 38 billion during FY22, thereby witnessing a growth of 6%.

ZENSAR TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	26,642	29,557	10.9
Current Liabilities	Rs m	8,267	8,581	3.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	37,856	40,252	6.3
Current assets	Rs m	22,618	23,184	2.5
Fixed Assets	Rs m	15,238	17,068	12.0
Total Assets	Rs m	37,856	40,252	6.3

ZENSAR TECHNOLOGIES Cash Flow Statement Analysis

• ZENSAR TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 7 billion, an improvement of 112.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -5 billion, an improvement of 2,863.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -310 million from the Rs 2 billion net cash flows seen during FY22.

ZENSAR 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	3,357	7,143	112.8%
Cash Flow from Investing Activities	Rs m	-178	-5,275	-
Cash Flow from Financing Activities	Rs m	-1,826	-2,186	-
Net Cash Flow	Rs m	1,562	-310	-

Current Valuations for ZENSAR TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 14.5, an decline from the EPS of Rs 18.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 450.4, stands at 31.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 13.2 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	187.6	214.1
TTM Earnings per share	Rs	18.6	14.5
Diluted earnings per share	Rs	18.6	14.5
Price to Cash Flow	x	13.7	13.2
TTM P/E ratio	x	19.7	31.1
Price / Book Value ratio	x	3.6	2.3
Market Cap	Rs m	95,197	67,543
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for ZENSAR TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY23, from 2.7x 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 16.9x during FY23, from 16.7x 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 declined and down at 11.1% during FY23, from 15.8% 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 declined and down at 16.0% during FY23, from 22.9% 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 declined and down at 8.8% during FY23, from 12.1% 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	2.7	2.7
Debtors’ Days	Days	69	55
Interest coverage	x	16.7	16.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.1	8.8
Return on equity	%	15.8	11.1
Return on capital employed	%	22.9	16.0

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 up from Rs 255.9 to Rs 450.4, registering a gain of Rs 194.5 or around 76.0%.

Meanwhile, the S&P BSE IT Index is trading at Rs 31,682.6 (down 0.2%). Over the last one year it has moved up from 27,986.2 to 31,682.6, a gain of 3,696 points (up 13.2%).

Overall, the S&P BSE SENSEX is up 22.7% over the year.

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