HCL TECHNOLOGIES 2019-20 Annual Report Analysis

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HCL TECHNOLOGIES 2019-20 Annual Report Analysis
Tue, 29 Dec

HCL TECHNOLOGIES has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

HCL TECHNOLOGIES Income Statement Analysis

  • Operating income during the year rose 17.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 24.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.5% in FY20 as against 23.0% in FY19.
  • Depreciation charges increased by 65.0% and finance costs increased by 190.2% YoY, respectively.
  • Other income declined by 37.5% YoY.
  • Net profit for the year grew by 9.3% YoY.
  • Net profit margins during the year declined from 16.5% in FY19 to 15.5% in FY20.

HCL TECHNOLOGIES Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 604,270 706,760 17.0%
Other income Rs m 9,430 5,890 -37.5%
Total Revenues Rs m 613,700 712,650 16.1%
Gross profit Rs m 139,260 173,160 24.3%
Depreciation Rs m 20,730 34,200 65.0%
Interest Rs m 1,740 5,050 190.2%
Profit before tax Rs m 126,220 139,800 10.8%
Tax Rs m 25,020 29,230 16.8%
Profit after tax Rs m 101,200 110,570 9.3%
Gross profit margin % 23.0 24.5
Effective tax rate % 19.8 20.9
Net profit margin % 16.5 15.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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HCL TECHNOLOGIES Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 237 billion as compared to Rs 116 billion in FY19, thereby witnessing an increase of 103.7%.
  • Long-term debt down at Rs 28 billion as compared to Rs 30 billion during FY19, a fall of 4.3%.
  • Current assets rose 29% and stood at Rs 384 billion, while fixed assets rose 64% and stood at Rs 379 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 829 billion as against Rs 586 billion during FY19, thereby witnessing a growth of 42%.

HCL TECHNOLOGIES Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 413,660 512,670 23.9
 
Current Liabilities Rs m 116,474 237,300 103.7
Long-term Debt Rs m 29,770 28,480 -4.3
Total Liabilities Rs m 585,750 829,060 41.5
 
Current assets Rs m 297,220 384,200 29.3
Fixed Assets Rs m 231,230 378,900 63.9
Total Assets Rs m 585,750 829,060 41.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HCL TECHNOLOGIES Cash Flow Statement Analysis

  • HCL TECHNOLOGIES's cash flow from operating activities (CFO) during FY20 stood at Rs 134 billion, an improvement of 48.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -124 billion, an improvement of 302.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -32 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -21 billion from the Rs 42 billion net cash flows seen during FY19.

HCL TECHNOLOGIES Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 89,710 133,590 48.9%
Cash Flow from Investing Activities Rs m -30,730 -123,740 -
Cash Flow from Financing Activities Rs m -14,710 -31,680 -
Net Cash Flow Rs m 42,440 -21,410 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HCL TECHNOLOGIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 40.7, an decline from the EPS of Rs 74.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 939.8, stands at 20.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 3.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 445.5 260.4
TTM Earnings per share Rs 74.6 40.7
Diluted earnings per share Rs 37.3 40.7
Price to Cash Flow x 10.5 17.6
TTM P/E ratio x 10.5 20.9
Price / Book Value ratio x 3.3 4.1
Market Cap Rs m 1,274,623 2,550,302
Dividends per share (Unadj.) Rs 8.0 8.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HCL TECHNOLOGIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY20, from 2.6x during FY19. 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 28.7x during FY20, from 73.5x during FY19. 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 21.6% during FY20, from 24.5% during FY20. 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 26.8% during FY20, from 28.9% during FY19. 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 13.9% during FY20, from 17.6% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 2.6 1.6
Debtors’ Days Days 71 73
Interest coverage x 73.5 28.7
Debt to equity ratio x 0.1 0.1
Return on assets % 17.6 13.9
Return on equity % 24.5 21.6
Return on capital employed % 28.9 26.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HCL TECHNOLOGIES Share Price Performance

Over the last one year, HCL TECHNOLOGIES share price has moved up from Rs 568.0 to Rs 939.8, registering a gain of Rs 371.8 or around 65.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 24,331.1 (up 0.8%). Over the last one year it has moved up from 15,620.0 to 24,331.1, a gain of 8,711 points (up 55.8%).

Overall, the S&P BSE SENSEX is up 14.8% over the year.

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

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HCL TECHNOLOGIES Announces Quarterly Results (3QFY21); Net Profit Up 35.1% (Quarterly Result Update)

Jan 18, 2021 | Updated on Jan 18, 2021

For the quarter ended December 2020, HCL TECHNOLOGIES has posted a net profit of Rs 40 bn (up 35.1% YoY). Sales on the other hand came in at Rs 193 bn (up 6.4% YoY). Read on for a complete analysis of HCL TECHNOLOGIES's quarterly results.

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May 7, 2020 | Updated on May 7, 2020

For the quarter ended March 2020, HCL TECHNOLOGIES has posted a net profit of Rs 32 bn (up 24.4% YoY). Sales on the other hand came in at Rs 186 bn (up 16.2% YoY). Read on for a complete analysis of HCL TECHNOLOGIES's quarterly results.

HCL TECHNOLOGIES 2018-19 Annual Report Analysis (Annual Result Update)

Sep 9, 2019 | Updated on Sep 9, 2019

Here's an analysis of the annual report of HCL TECHNOLOGIES for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of HCL TECHNOLOGIES. Also includes updates on the valuation of HCL TECHNOLOGIES.

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