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HCL TECHNOLOGIES 2020-21 Annual Report Analysis
Wed, 31 Mar

HCL TECHNOLOGIES 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 TECHNOLOGIES Income Statement Analysis

  • Operating income during the year rose 6.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 15.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.6% in FY21 as against 24.5% in FY20.
  • Depreciation charges increased by 34.8% and finance costs increased by 1.2% YoY, respectively.
  • Other income grew by 53.5% YoY.
  • Net profit for the year grew by 1.0% YoY.
  • Net profit margins during the year declined from 15.6% in FY20 to 14.8% in FY21.

HCL TECHNOLOGIES Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 706,760 753,790 6.7%
Other income Rs m 6,190 9,500 53.5%
Total Revenues Rs m 712,950 763,290 7.1%
Gross profit Rs m 172,860 200,250 15.8%
Depreciation Rs m 34,200 46,110 34.8%
Interest Rs m 5,050 5,110 1.2%
Profit before tax Rs m 139,800 158,530 13.4%
Tax Rs m 29,230 46,840 60.2%
Profit after tax Rs m 110,570 111,690 1.0%
Gross profit margin % 24.5 26.6
Effective tax rate % 20.9 29.5
Net profit margin % 15.6 14.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HCL TECHNOLOGIES Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 174 billion as compared to Rs 237 billion in FY20, thereby witnessing an decrease of -26.7%.
  • Long-term debt stood at Rs 38 billion as compared to Rs 28 billion during FY20, a growth of 34.4%.
  • Current assets rose 12% and stood at Rs 431 billion, while fixed assets fell 0% and stood at Rs 420 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 850 billion as against Rs 806 billion during FY20, thereby witnessing a growth of 5%.

HCL TECHNOLOGIES Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 512,670 599,130 16.9
 
Current Liabilities Rs m 237,300 173,830 -26.7
Long-term Debt Rs m 28,480 38,280 34.4
Total Liabilities Rs m 805,890 850,130 5.5
 
Current assets Rs m 384,200 430,510 12.1
Fixed Assets Rs m 421,690 419,620 -0.5
Total Assets Rs m 805,890 850,130 5.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HCL TECHNOLOGIES Cash Flow Statement Analysis

  • HCL TECHNOLOGIES's cash flow from operating activities (CFO) during FY21 stood at Rs 196 billion, an improvement of 46.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -57 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -112 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 28 billion from the Rs -21 billion net cash flows seen during FY20.

HCL TECHNOLOGIES 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 133,590 196,180 46.9%
Cash Flow from Investing Activities Rs m -123,740 -57,420 -
Cash Flow from Financing Activities Rs m -31,680 -111,800 -
Net Cash Flow Rs m -21,410 27,610 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HCL TECHNOLOGIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 41.2, an improvement from the EPS of Rs 40.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 983.5, stands at 23.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 3.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 12.7 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 260.4 277.8
TTM Earnings per share Rs 40.7 41.2
Diluted earnings per share Rs 40.7 41.2
Price to Cash Flow x 8.2 12.7
TTM P/E ratio x 10.7 23.9
Price / Book Value ratio x 4.1 3.3
Market Cap Rs m 2,124,121 1,998,886
Dividends per share (Unadj.) Rs 10.0 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HCL TECHNOLOGIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.5x during FY21, from 1.6x 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 improved and stood at 32.0x during FY21, from 28.7x 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 18.6% during FY21, from 21.6% 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 declined and down at 25.7% during FY21, from 26.8% 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 13.7% during FY21, from 14.3% 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 1.6 2.5
Debtors’ Days Days 7 7
Interest coverage x 28.7 32.0
Debt to equity ratio x 0.1 0.1
Return on assets % 14.3 13.7
Return on equity % 21.6 18.6
Return on capital employed % 26.8 25.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 436.8 to Rs 983.5, registering a gain of Rs 546.7 or around 125.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Annual Report FAQs

What is the current share price of HCL TECHNOLOGIES?

HCL TECHNOLOGIES currently trades at Rs 961.7 per share. You can check out the latest share price performance of HCL TECHNOLOGIES here...

What was the revenue of HCL TECHNOLOGIES in FY21? How does it compare to earlier years?

The revenues of HCL TECHNOLOGIES stood at Rs 763,290 m in FY21, which was up 7.1% compared to Rs 712,950 m reported in FY20.

HCL TECHNOLOGIES' revenue has grown from Rs 486,460 m in FY17 to Rs 763,290 m in FY21.

Over the past 5 years, the revenue of HCL TECHNOLOGIES has grown at a CAGR of 11.9%.

What was the net profit of HCL TECHNOLOGIES in FY21? How does it compare to earlier years?

The net profit of HCL TECHNOLOGIES stood at Rs 111,690 m in FY21, which was up 1.0% compared to Rs 110,570 m reported in FY20.

This compares to a net profit of Rs 101,200 m in FY19 and a net profit of Rs 87,090 m in FY18.

Over the past 5 years, HCL TECHNOLOGIES net profit has grown at a CAGR of 6.7%.

What does the cash flow statement of HCL TECHNOLOGIES reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of HCL TECHNOLOGIES reveals:

  • Cash flow from operations increased in FY21 and stood at Rs 196,180 m as compared to Rs 133,590 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs -57,420 m as compared to Rs -123,740 m in FY20.
  • Cash flow from financial activity decreased in FY21 and stood at Rs -111,800 m as compared to Rs -31,680 m in FY20.

Here's the cash flow statement of HCL TECHNOLOGIES for the past 5 years.

(Rs m)FY17FY18FY19FY20FY21
From Operations89,95083,28089,710133,590196,180
From Investments-38,330-22,830-30,730-123,740-57,420
From Financial Activity-45,170-57,140-14,710-31,680-111,800
Net Cashflow5,8803,78042,440-21,41027,610

What does the Key Ratio analysis of HCL TECHNOLOGIES reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of HCL TECHNOLOGIES reveals:

  • Operating profit margins witnessed a fall and down at 26.6% in FY21 as against 24.5% in FY20.
  • Net profit margins declined from 15.6% in FY20 to 14.8% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.1 as compared to 0.1 in FY20.

Here's the ratio/financial analysis of HCL TECHNOLOGIES for the past 5 years.

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)21.822.223.024.526.6
Net Profit Margin (%)18.117.216.715.614.8
Debt to Equity Ratio (x)0.00.00.10.10.1

Read: Latest Annual Report Analysis of HCL TECHNOLOGIES

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