HCL INFOSYS 2022-23 Annual Report Analysis

Wed, 30 Aug

HCL INFOSYS 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.

HCL INFOSYS Income Statement Analysis

• Operating income during the year fell 54.8% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 183.2% in FY23 as against 2.1% in FY22.
• Depreciation charges decreased by 60.5% and finance costs decreased by 74.6% YoY, respectively.
• Other income declined by 43.7% YoY.
• Net profit for the year declined by NA YoY.
• Net profit margins during the year declined from 35.3% in FY22 to 123.5% in FY23.

HCL INFOSYS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	694	314	-54.8%
Other income	Rs m	415	234	-43.7%
Total Revenues	Rs m	1,110	548	-50.6%
Gross profit	Rs m	14	-575	NA
Depreciation	Rs m	15	6	-60.5%
Interest	Rs m	158	40	-74.6%
Profit before tax	Rs m	257	-387	NA
Tax	Rs m	12	1	-95.9%
Profit after tax	Rs m	245	-388	NA
Gross profit margin	%	2.1	-183.2
Effective tax rate	%	4.7	-0.1
Net profit margin	%	35.3	-123.5

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HCL INFOSYS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 8 billion as compared to Rs 7 billion in FY22, thereby witnessing an increase of 9.7%.
• Current assets rose 3% and stood at Rs 3 billion, while fixed assets fell 16% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 5 billion as against Rs 5 billion during FY22, thereby witnessing a fall of 6%.

HCL INFOSYS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	-2,151	-2,535	NA
Current Liabilities	Rs m	6,910	7,577	9.7
Long-term Debt	Rs m	138	0	-100.0
Total Liabilities	Rs m	5,396	5,059	-6.2
Current assets	Rs m	2,793	2,873	2.9
Fixed Assets	Rs m	2,603	2,186	-16.0
Total Assets	Rs m	5,396	5,059	-6.2

HCL INFOSYS Cash Flow Statement Analysis

• HCL INFOSYS's cash flow from operating activities (CFO) during FY23 stood at Rs 736 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -152 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -619 million, an improvement of 55% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -21 million from the Rs -169 million net cash flows seen during FY22.

HCL INFOSYS 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	1,007	736	-26.9%
Cash Flow from Investing Activities	Rs m	208	-152	-
Cash Flow from Financing Activities	Rs m	-1,386	-619	-
Net Cash Flow	Rs m	-169	-21	-

Current Valuations for HCL INFOSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -1.2, an decline from the EPS of Rs 0.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 18.0, stands at -17.1 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 18.9 times.
• The company's price to cash flow (P/CF) ratio stood at -13.7 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	2.1	1.0
TTM Earnings per share	Rs	0.7	-1.2
Diluted earnings per share	Rs	0.7	-1.2
Price to Cash Flow	x	23.5	-13.7
TTM P/E ratio	x	24.9	-17.1
Price / Book Value ratio	x	-3.0	-2.1
Market Cap	Rs m	6,469	5,253
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for HCL INFOSYS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.4x during FY23, from 0.4x 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 -8.7x during FY23, from 2.6x 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 15.3% during FY23, from -11.4% 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 improved and stood at 13.7% during FY23, from -20.6% 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 -6.9% during FY23, from 7.5% 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	0.4	0.4
Debtors’ Days	Days	15	30
Interest coverage	x	2.6	-8.7
Debt to equity ratio	x	-0.1	0.0
Return on assets	%	7.5	-6.9
Return on equity	%	-11.4	15.3
Return on capital employed	%	-20.6	13.7

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 17.0 to Rs 18.0, registering a gain of Rs 1.0 or around 5.9%.

Overall, the S&P BSE SENSEX is up 12.8% over the year.

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