HAPPIEST MINDS TECHNOLOGIES 2021-22 Annual Report Analysis

Wed, 8 Jun

HAPPIEST MINDS 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.

HAPPIEST MINDS TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 41.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 31.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 23.0% in FY22 as against 24.7% in FY21.
• Depreciation charges increased by 44.6% and finance costs increased by 53.3% YoY, respectively.
• Other income grew by 53.1% YoY.
• Net profit for the year grew by 11.5% YoY.
• Net profit margins during the year declined from 21.0% in FY21 to 16.6% in FY22.

HAPPIEST MINDS TECHNOLOGIES Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	7,734	10,937	41.4%
Other income	Rs m	242	371	53.1%
Total Revenues	Rs m	7,977	11,308	41.8%
Gross profit	Rs m	1,910	2,516	31.7%
Depreciation	Rs m	227	329	44.6%
Interest	Rs m	65	100	53.3%
Profit before tax	Rs m	1,860	2,459	32.2%
Tax	Rs m	236	647	174.4%
Profit after tax	Rs m	1,625	1,812	11.5%
Gross profit margin	%	24.7	23.0
Effective tax rate	%	12.7	26.3
Net profit margin	%	21.0	16.6

5 PM TODAY: Golden Buying Window to Ride India's Potentially Decade-Long $10 Trillion Bull Run...

HAPPIEST MINDS TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 4 billion as compared to Rs 3 billion in FY21, thereby witnessing an increase of 31.6%.
• Long-term debt down at Rs 172 million as compared to Rs 366 million during FY21, a fall of 52.9%.
• Current assets rose 25% and stood at Rs 9 billion, while fixed assets rose 14% and stood at Rs 2 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 11 billion as against Rs 9 billion during FY21, thereby witnessing a growth of 23%.

HAPPIEST MINDS TECHNOLOGIES Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,424	6,620	22.0
Current Liabilities	Rs m	2,788	3,670	31.6
Long-term Debt	Rs m	366	172	-52.9
Total Liabilities	Rs m	9,117	11,180	22.6
Current assets	Rs m	7,445	9,274	24.6
Fixed Assets	Rs m	1,672	1,907	14.1
Total Assets	Rs m	9,117	11,180	22.6

HAPPIEST MINDS TECHNOLOGIES Cash Flow Statement Analysis

• HAPPIEST MINDS TECHNOLOGIES's cash flow from operating activities (CFO) during FY22 stood at Rs 2 billion, an improvement of 17.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -961 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -908 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -185 million from the Rs 423 million net cash flows seen during FY21.

HAPPIEST MINDS 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	1,432	1,681	17.4%
Cash Flow from Investing Activities	Rs m	-2,836	-961	-
Cash Flow from Financing Activities	Rs m	1,698	-908	-
Net Cash Flow	Rs m	423	-185	-

Current Valuations for HAPPIEST MINDS TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.7, an improvement from the EPS of Rs 11.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 921.8, stands at 74.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 20.5 times, while the price to sales ratio stands at 12.0 times.
• The company's price to cash flow (P/CF) ratio stood at 70.7 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	54.6	76.7
TTM Earnings per share	Rs	11.5	12.7
Diluted earnings per share	Rs	11.1	12.3
Price to Cash Flow	x	42.8	70.7
TTM P/E ratio	x	57.1	74.7
Price / Book Value ratio	x	11.4	22.9
Market Cap	Rs m	61,810	151,365
Dividends per share (Unadj.)	Rs	3.0	3.8

Ratio Analysis for HAPPIEST MINDS TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.5x 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 deteriorated and stood at 25.7x during FY22, from 29.7x 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 declined and down at 27.4% during FY22, from 30.0% 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 37.7% during FY22, from 33.2% 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 declined and down at 17.1% during FY22, from 18.5% 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	2.5
Debtors’ Days	Days	575	559
Interest coverage	x	29.7	25.7
Debt to equity ratio	x	0.1	0.0
Return on assets	%	18.5	17.1
Return on equity	%	30.0	27.4
Return on capital employed	%	33.2	37.7

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

HAPPIEST MINDS TECHNOLOGIES Share Price Performance

Over the last one year, HAPPIEST MINDS TECHNOLOGIES share price has moved down from Rs 926.0 to Rs 921.8, registering a loss of Rs 4.2 or around 0.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 30,029.8 (up 0.5%). Over the last one year it has moved up from 28,096.6 to 30,029.8, a gain of 1,933 points (up 6.9%).

Overall, the S&P BSE SENSEX is up 5.6% over the year.

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

Read: Latest Annual Report Analysis of HAPPIEST MINDS TECHNOLOGIES