INFOSYS 2018-19 Annual Report Analysis

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INFOSYS 2018-19 Annual Report Analysis
Tue, 21 May

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 3.9% YoY.
  • Net profit margins during the year declined from 21.7% in FY18 to 18.0% 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 160,290 154,100 -3.9%
Gross profit margin % 26.8 24.4
Effective tax rate % 20.8 26.8
Net profit margin % 21.7 18.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 21% and stood at Rs 171 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 847 billion as against Rs 799 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 649,230 649,480 0.0
 
Current Liabilities Rs m 141,050 186,380 32.1
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 798,900 847,380 6.1
 
Current assets Rs m 500,170 528,780 5.7
Fixed Assets Rs m 141,800 170,980 20.6
Total Assets Rs m 798,900 847,380 6.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 73.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 716.0, stands at 20.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.4 times, while the price to sales ratio stands at 3.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 18.0 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 73.8 35.5
Diluted earnings per share Rs 36.7 35.3
Price to Cash Flow x 8.7 18.0
TTM P/E ratio x 10.1 20.3
Price / Book Value ratio x 3.5 4.4
Market Cap Rs m 1,556,090 3,127,670
Dividends per share (Unadj.) Rs 43.5 21.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 23.7% during FY19, from 24.7% 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 32.4% during FY19, from 31.2% 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 18.2% during FY19, from 20.1% 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 68 65
Interest coverage x 0.0 0.0
Debt to equity ratio x 0.0 0.0
Return on assets % 20.1 18.2
Return on equity % 24.7 23.7
Return on capital employed % 31.2 32.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 up from Rs 591.3 to Rs 716.0, registering a gain of Rs 124.7 or around 21.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,445.8 (down 0.5%). Over the last one year it has moved up from 13,223.1 to 15,445.8, a gain of 2,223 points (up 16.8%).

Overall, the S&P BSE SENSEX is up 14.1% over the year.

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

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For the quarter ended March 2020, INFOSYS has posted a net profit of Rs 43 bn (up 6.3% YoY). Sales on the other hand came in at Rs 233 bn (up 8.0% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

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