HAPPIEST MINDS TECHNOLOGIES 2022-23 Annual Report Analysis

Mon, 26 Jun

HAPPIEST MINDS 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.

HAPPIEST MINDS TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 30.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 34.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.7% in FY23 as against 23.0% in FY22.
• Depreciation charges increased by 27.5% and finance costs increased by 119.7% YoY, respectively.
• Other income declined by 4.5% YoY.
• Net profit for the year grew by 27.5% YoY.
• Net profit margins during the year declined from 16.6% in FY22 to 16.2% in FY23.

HAPPIEST MINDS TECHNOLOGIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	10,937	14,293	30.7%
Other income	Rs m	371	354	-4.5%
Total Revenues	Rs m	11,308	14,647	29.5%
Gross profit	Rs m	2,516	3,382	34.4%
Depreciation	Rs m	329	419	27.5%
Interest	Rs m	100	219	119.7%
Profit before tax	Rs m	2,459	3,099	26.0%
Tax	Rs m	647	789	22.0%
Profit after tax	Rs m	1,812	2,310	27.5%
Gross profit margin	%	23.0	23.7
Effective tax rate	%	26.3	25.5
Net profit margin	%	16.6	16.2

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 FY23 stood at Rs 6 billion as compared to Rs 4 billion in FY22, thereby witnessing an increase of 58.1%.
• Long-term debt stood at Rs 1 billion as compared to Rs 172 million during FY22, a growth of 554.2%.
• Current assets rose 16% and stood at Rs 11 billion, while fixed assets rose 191% and stood at Rs 6 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 16 billion as against Rs 11 billion during FY22, thereby witnessing a growth of 46%.

HAPPIEST MINDS TECHNOLOGIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,620	8,362	26.3
Current Liabilities	Rs m	3,646	5,764	58.1
Long-term Debt	Rs m	172	1,128	554.2
Total Liabilities	Rs m	11,180	16,284	45.6
Current assets	Rs m	9,274	10,730	15.7
Fixed Assets	Rs m	1,907	5,554	191.3
Total Assets	Rs m	11,180	16,284	45.6

HAPPIEST MINDS TECHNOLOGIES Cash Flow Statement Analysis

• HAPPIEST MINDS TECHNOLOGIES's cash flow from operating activities (CFO) during FY23 stood at Rs 2 billion, an improvement of 23.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -4 billion, an improvement of 265.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 721 million, an improvement of 179% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -685 million from the Rs -185 million net cash flows seen during FY22.

HAPPIEST MINDS 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	1,681	2,072	23.2%
Cash Flow from Investing Activities	Rs m	-961	-3,510	-
Cash Flow from Financing Activities	Rs m	-908	721	-
Net Cash Flow	Rs m	-185	-685	-

Current Valuations for HAPPIEST MINDS TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.1, an improvement from the EPS of Rs 12.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 950.5, stands at 60.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.7 times, while the price to sales ratio stands at 9.5 times.
• The company's price to cash flow (P/CF) ratio stood at 51.0 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	76.7	99.8
TTM Earnings per share	Rs	12.7	16.1
Diluted earnings per share	Rs	12.3	15.7
Price to Cash Flow	x	72.4	51.0
TTM P/E ratio	x	85.5	60.4
Price / Book Value ratio	x	22.9	16.6
Market Cap	Rs m	151,294	139,061
Dividends per share (Unadj.)	Rs	3.8	5.4

Ratio Analysis for HAPPIEST MINDS TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY23, from 2.5x 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 deteriorated and stood at 15.2x during FY23, from 25.7x 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 improved and stood at 27.6% during FY23, from 27.4% 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 35.0% during FY23, from 37.7% 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 15.5% during FY23, from 17.1% 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	2.5	1.9
Debtors’ Days	Days	559	544
Interest coverage	x	25.7	15.2
Debt to equity ratio	x	0.0	0.1
Return on assets	%	17.1	15.5
Return on equity	%	27.4	27.6
Return on capital employed	%	37.7	35.0

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 up from Rs 868.1 to Rs 950.5, registering a gain of Rs 82.5 or around 9.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,903.9 (up 0.2%). Over the last one year it has moved up from 28,147.6 to 28,903.9, a gain of 756 points (up 2.7%).

Overall, the S&P BSE SENSEX is up 21.4% over the year.

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