3I INFOTECH 2017-18 Annual Report Analysis

Sat, 31 Mar

3I INFOTECH has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

3I INFOTECH Income Statement Analysis

• Operating income during the year fell 1.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.7% in FY18 as against 15.6% in FY17.
• Depreciation charges decreased by 33.9% and finance costs decreased by 6.8% YoY, respectively.
• Other income declined by 63.1% YoY.
• Net profit for the year declined by 24.4% YoY.
• Net profit margins during the year declined from 9.4% in FY17 to 7.2% in FY18.

3I INFOTECH Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	10,038	9,912	-1.3%
Other income	Rs m	521	192	-63.1%
Total Revenues	Rs m	10,559	10,104	-4.3%
Gross profit	Rs m	1,569	1,558	-0.7%
Depreciation	Rs m	135	89	-33.9%
Interest	Rs m	930	867	-6.8%
Profit before tax	Rs m	1,026	795	-22.5%
Tax	Rs m	85	84	-1.6%
Profit after tax	Rs m	941	711	-24.4%
Gross profit margin	%	15.6	15.7
Effective tax rate	%	8.3	10.5
Net profit margin	%	9.4	7.2

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3I INFOTECH Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 3 billion as compared to Rs 3 billion in FY17, thereby witnessing an decrease of -4.1%.
• Long-term debt down at Rs 8 billion as compared to Rs 9 billion during FY17, a fall of 8.7%.
• Current assets fell 3% and stood at Rs 4 billion, while fixed assets rose 0% and stood at Rs 10 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 14 billion as against Rs 14 billion during FY17, thereby witnessing a fall of 1%.

3I INFOTECH Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	1,755	2,497	42.2
Current Liabilities	Rs m	2,816	2,700	-4.1
Long-term Debt	Rs m	9,029	8,247	-8.7
Total Liabilities	Rs m	13,797	13,671	-0.9
Current assets	Rs m	4,172	4,029	-3.4
Fixed Assets	Rs m	9,625	9,642	0.2
Total Assets	Rs m	13,797	13,671	-0.9

3I INFOTECH Cash Flow Statement Analysis

• 3I INFOTECH's cash flow from operating activities (CFO) during FY18 stood at Rs 927 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -25 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -701 million from the Rs 708 million net cash flows seen during FY17.

3I INFOTECH Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	1,294	927	-28.3%
Cash Flow from Investing Activities	Rs m	156	-25	-
Cash Flow from Financing Activities	Rs m	-742	-1,604	-
Net Cash Flow	Rs m	708	-701	-

Current Valuations for 3I INFOTECH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.4, an decline from the EPS of Rs 0.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5.0, stands at 1.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.3 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 13.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	8.5	6.1
TTM Earnings per share	Rs	0.8	0.4
Diluted earnings per share	Rs	5.6	4.2
Price to Cash Flow	x	0.8	13.0
TTM P/E ratio	x	0.9	1.0
Price / Book Value ratio	x	3.7	4.2
Market Cap	Rs m	6,480	10,395
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for 3I INFOTECH

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY18, from 1.5x during FY17. 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 1.9x during FY18, from 2.1x during FY17. 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 28.5% during FY18, from 53.6% during FY18. 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 15.5% during FY18, from 18.1% during FY17. 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 11.5% during FY18, from 13.6% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.5	1.5
Debtors’ Days	Days	7	8
Interest coverage	x	2.1	1.9
Debt to equity ratio	x	5.1	3.3
Return on assets	%	13.6	11.5
Return on equity	%	53.6	28.5
Return on capital employed	%	18.1	15.5

To see how 3I INFOTECH has performed over the last 5 years, please visit here.

3I INFOTECH Share Price Performance

Over the last one year, 3I INFOTECH share price has moved down from Rs 5.1 to Rs 5.0, registering a loss of Rs 0.0 or around 0.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for 3I INFOTECH and quarterly results for 3I INFOTECH)

Read: Latest Annual Report Analysis of 3I INFOTECH