INFOSYS 2018-19 Annual Report Analysis

Sun, 31 Mar

INFOSYS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

INFOSYS Income Statement Analysis

• Operating income during the year rose 17.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.4% in FY19 as against 26.8% in FY18.
• Depreciation charges increased by 7.9% increased by 0.0% YoY, respectively.
• Other income declined by 13.0% YoY.
• Net profit for the year declined by 4.3% YoY.
• Net profit margins during the year declined from 22.8% in FY18 to 18.6% in FY19.

INFOSYS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	705,220	826,750	17.2%
Other income	Rs m	33,110	28,820	-13.0%
Total Revenues	Rs m	738,330	855,570	15.9%
Gross profit	Rs m	188,930	201,700	6.8%
Depreciation	Rs m	18,630	20,110	7.9%
Interest	Rs m	0	0	0.0%
Profit before tax	Rs m	203,410	210,410	3.4%
Tax	Rs m	42,410	56,310	32.8%
Profit after tax	Rs m	161,000	154,100	-4.3%
Gross profit margin	%	26.8	24.4
Effective tax rate	%	20.8	26.8
Net profit margin	%	22.8	18.6

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INFOSYS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 186 billion as compared to Rs 141 billion in FY18, thereby witnessing an increase of 32.1%.
• Current assets rose 6% and stood at Rs 529 billion, while fixed assets rose 7% and stood at Rs 305 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 834 billion as against Rs 786 billion during FY18, thereby witnessing a growth of 6%.

INFOSYS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	647,930	647,210	-0.1
Current Liabilities	Rs m	141,050	186,380	32.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	786,080	833,660	6.1
Current assets	Rs m	500,170	528,780	5.7
Fixed Assets	Rs m	285,910	304,880	6.6
Total Assets	Rs m	786,080	833,660	6.1

INFOSYS Cash Flow Statement Analysis

• INFOSYS's cash flow from operating activities (CFO) during FY19 stood at Rs 148 billion, an improvement of 12.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -6 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -145 billion, an improvement of 29% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -3 billion from the Rs -28 billion net cash flows seen during FY18.

INFOSYS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	132,180	148,410	12.3%
Cash Flow from Investing Activities	Rs m	44,520	-5,750	-
Cash Flow from Financing Activities	Rs m	-205,050	-145,120	-
Net Cash Flow	Rs m	-27,540	-3,030	-

Current Valuations for INFOSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 35.5, an decline from the EPS of Rs 74.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 742.3, stands at 20.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.8 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 25.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	324.5	190.7
TTM Earnings per share	Rs	74.1	35.5
Diluted earnings per share	Rs	38.3	36.6
Price to Cash Flow	x	26.6	25.7
TTM P/E ratio	x	29.6	20.3
Price / Book Value ratio	x	3.5	6.9
Market Cap	Rs m	2,261,875	4,482,618
Dividends per share (Unadj.)	Rs	43.5	21.5

Ratio Analysis for INFOSYS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.8x during FY19, from 3.5x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 23.8% during FY19, from 24.8% during FY19. 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 32.5% during FY19, from 31.4% during FY18. 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 18.5% during FY19, from 20.5% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	3.5	2.8
Debtors’ Days	Days	7	7
Interest coverage	x	0.0	0.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	20.5	18.5
Return on equity	%	24.8	23.8
Return on capital employed	%	31.4	32.5

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

INFOSYS Share Price Performance

Over the last one year, INFOSYS share price has moved down from Rs 1,134.4 to Rs 742.3, registering a loss of Rs 392.1 or around 34.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,280.3 (up 0.4%). Over the last one year it has moved up from 12,100.6 to 15,280.3, a gain of 3,180 points (up 26.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of INFOSYS