INFOSYS 2019-20 Annual Report Analysis

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INFOSYS 2019-20 Annual Report Analysis
Wed, 5 Aug

INFOSYS 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.

INFOSYS Income Statement Analysis

  • Operating income during the year rose 9.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 10.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.5% in FY20 as against 24.4% in FY19.
  • Depreciation charges increased by 43.9% increased by 0.0% YoY, respectively.
  • Other income declined by 2.7% YoY.
  • Net profit for the year grew by 8.0% YoY.
  • Net profit margins during the year declined from 18.0% in FY19 to 17.8% in FY20.

INFOSYS Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 826,750 907,910 9.8%
Other income Rs m 28,820 28,030 -2.7%
Total Revenues Rs m 855,570 935,940 9.4%
Gross profit Rs m 201,700 222,670 10.4%
Depreciation Rs m 20,110 28,930 43.9%
Interest Rs m 0 1,700 0.0%
Profit before tax Rs m 210,410 220,070 4.6%
Tax Rs m 56,310 53,680 -4.7%
Profit after tax Rs m 154,100 166,390 8.0%
Gross profit margin % 24.4 24.5
Effective tax rate % 26.8 24.4
Net profit margin % 18.0 17.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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INFOSYS Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 209 billion as compared to Rs 186 billion in FY19, thereby witnessing an increase of 11.9%.
  • Current assets rose 3% and stood at Rs 546 billion, while fixed assets rose 45% and stood at Rs 247 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 928 billion as against Rs 847 billion during FY19, thereby witnessing a growth of 9%.

INFOSYS Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 649,480 654,500 0.8
 
Current Liabilities Rs m 186,380 208,560 11.9
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 847,380 927,680 9.5
 
Current assets Rs m 528,780 545,760 3.2
Fixed Assets Rs m 170,980 247,430 44.7
Total Assets Rs m 847,380 927,680 9.5
* 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 FY20 stood at Rs 170 billion, an improvement of 14.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -2 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -176 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -9 billion from the Rs -3 billion net cash flows seen during FY19.

INFOSYS 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 148,410 170,030 14.6%
Cash Flow from Investing Activities Rs m -5,750 -2,390 -
Cash Flow from Financing Activities Rs m -145,120 -175,910 -
Net Cash Flow Rs m -3,030 -9,190 -
* 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 39.2, an improvement from the EPS of Rs 35.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 956.5, stands at 24.0 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 3.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 21.0 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 190.7 214.1
TTM Earnings per share Rs 35.5 39.2
Diluted earnings per share Rs 35.9 38.7
Price to Cash Flow x 23.8 21.0
TTM P/E ratio x 24.2 24.0
Price / Book Value ratio x 4.4 4.4
Market Cap Rs m 4,147,336 4,108,208
Dividends per share (Unadj.) Rs 21.5 17.5
* 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 2.6x during FY20, from 2.8x 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 improved and stood at 130.5x during FY20, from 0.0x 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 improved and stood at 25.4% during FY20, from 23.7% 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 improved and stood at 33.9% during FY20, from 32.4% 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 18.1% during FY20, from 18.2% 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 2.8 2.6
Debtors’ Days Days 65 74
Interest coverage x 0.0 130.5
Debt to equity ratio x 0.0 0.0
Return on assets % 18.2 18.1
Return on equity % 23.7 25.4
Return on capital employed % 32.4 33.9
* 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 776.8 to Rs 956.5, registering a gain of Rs 179.8 or around 23.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 18,119.1 (up 0.7%). Over the last one year it has moved up from 15,638.8 to 18,119.1, a gain of 2,480 points (up 15.9%).

Overall, the S&P BSE SENSEX is up 3.5% over the year.

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

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