HCL INFOSYS 2020-21 Annual Report Analysis

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HCL INFOSYS 2020-21 Annual Report Analysis
Mon, 1 Nov

HCL INFOSYS has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

HCL INFOSYS Income Statement Analysis

  • Operating income during the year fell 83.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 607.3% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 70.4% in FY21 as against 1.7% in FY20.
  • Depreciation charges decreased by 76.4% and finance costs decreased by 44.0% YoY, respectively.
  • Other income grew by 42.3% YoY.
  • Net profit for the year grew by 44.3% YoY.
  • Net profit margins during the year declined from 6.3% in FY20 to 42.2% in FY21.

HCL INFOSYS Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 20,793 3,528 -83.0%
Other income Rs m 796 1,133 42.3%
Total Revenues Rs m 21,589 4,660 -78.4%
Gross profit Rs m -351 -2,482 607.3%
Depreciation Rs m 181 43 -76.4%
Interest Rs m 992 556 -44.0%
Profit before tax Rs m -728 -1,948 167.6%
Tax Rs m 636 20 -96.9%
Profit after tax Rs m -1,363 -1,967 44.3%
Gross profit margin % -1.7 -70.4
Effective tax rate % -87.3 -1.0
Net profit margin % -6.3 -42.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HCL INFOSYS Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 8 billion as compared to Rs 11 billion in FY20, thereby witnessing an decrease of -21.9%.
  • Long-term debt stood at Rs 590 million as compared to Rs 228 million during FY20, a growth of 159.5%.
  • Current assets fell 51% and stood at Rs 3 billion, while fixed assets fell 17% and stood at Rs 4 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 7 billion as against Rs 11 billion during FY20, thereby witnessing a fall of 36%.

HCL INFOSYS Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m -421 -2,401 469.7
 
Current Liabilities Rs m 10,603 8,279 -21.9
Long-term Debt Rs m 228 590 159.5
Total Liabilities Rs m 10,955 6,976 -36.3
 
Current assets Rs m 6,306 3,116 -50.6
Fixed Assets Rs m 4,649 3,859 -17.0
Total Assets Rs m 10,955 6,976 -36.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HCL INFOSYS Cash Flow Statement Analysis

  • HCL INFOSYS's cash flow from operating activities (CFO) during FY21 stood at Rs -148 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs 204 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -222 million, an improvement of 95% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -164 million from the Rs -352 million net cash flows seen during FY20.

HCL INFOSYS Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 621 -148 -
Cash Flow from Investing Activities Rs m 3,931 204 -94.8%
Cash Flow from Financing Activities Rs m -4,900 -222 -
Net Cash Flow Rs m -352 -164 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HCL INFOSYS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -6.0, an decline from the EPS of Rs -4.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 13.3, stands at -3.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at -1.1 times, while the price to sales ratio stands at 0.7 times.
  • The company's price to cash flow (P/CF) ratio stood at -2.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 63.2 10.7
TTM Earnings per share Rs -4.1 -6.0
Diluted earnings per share Rs -4.1 -6.0
Price to Cash Flow x -3.7 -2.3
TTM P/E ratio x -3.7 -3.7
Price / Book Value ratio x -8.9 -1.1
Market Cap Rs m 4,388 4,388
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HCL INFOSYS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY21, from 0.6x during FY20. 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 -2.5x during FY21, from 0.3x during FY20. 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 81.9% during FY21, from 323.5% during FY21. 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 76.9% during FY21, from -136.1% during FY20. 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 -20.2% during FY21, from -3.4% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 0.6 0.4
Debtors’ Days Days 3 9
Interest coverage x 0.3 -2.5
Debt to equity ratio x -0.5 -0.2
Return on assets % -3.4 -20.2
Return on equity % 323.5 81.9
Return on capital employed % -136.1 76.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how HCL INFOSYS has performed over the last 5 years, please visit here.

HCL INFOSYS Share Price Performance

Over the last one year, HCL INFOSYS share price has moved up from Rs 7.7 to Rs 13.3, registering a gain of Rs 5.7 or around 74.2%.

Overall, the S&P BSE SENSEX is up 50.6% over the year.

(To know more, check out historical annual results for HCL INFOSYS and quarterly results for HCL INFOSYS)

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