INFOSYS 2020-21 Annual Report Analysis

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INFOSYS 2020-21 Annual Report Analysis
Thu, 8 Jul

INFOSYS 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.

INFOSYS Income Statement Analysis

  • Operating income during the year rose 10.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 26.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 27.4% in FY21 as against 24.0% in FY20.
  • Depreciation charges increased by 12.9% and finance costs increased by 14.7% YoY, respectively.
  • Other income declined by 23.1% YoY.
  • Net profit for the year grew by 16.7% YoY.
  • Net profit margins during the year grew from 17.7% in FY20 to 18.9% in FY21.

INFOSYS Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 907,910 1,004,720 10.7%
Other income Rs m 33,140 25,470 -23.1%
Total Revenues Rs m 941,050 1,030,190 9.5%
Gross profit Rs m 217,560 275,430 26.6%
Depreciation Rs m 28,930 32,670 12.9%
Interest Rs m 1,700 1,950 14.7%
Profit before tax Rs m 220,070 266,280 21.0%
Tax Rs m 53,680 72,050 34.2%
Profit after tax Rs m 166,390 194,230 16.7%
Gross profit margin % 24.0 27.4
Effective tax rate % 24.4 27.1
Net profit margin % 17.7 18.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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INFOSYS Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 239 billion as compared to Rs 209 billion in FY20, thereby witnessing an increase of 14.4%.
  • Current assets rose 11% and stood at Rs 607 billion, while fixed assets rose 28% and stood at Rs 466 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 1,073 billion as against Rs 910 billion during FY20, thereby witnessing a growth of 18%.

INFOSYS Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 651,530 759,790 16.6
 
Current Liabilities Rs m 208,560 238,650 14.4
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 910,240 1,072,880 17.9
 
Current assets Rs m 545,760 607,330 11.3
Fixed Assets Rs m 364,480 465,550 27.7
Total Assets Rs m 910,240 1,072,880 17.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



INFOSYS Cash Flow Statement Analysis

  • INFOSYS's cash flow from operating activities (CFO) during FY21 stood at Rs 232 billion, an improvement of 36.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -75 billion, an improvement of 3,019.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -98 billion, an improvement of 44% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 61 billion from the Rs -9 billion net cash flows seen during FY20.

INFOSYS 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 170,030 232,240 36.6%
Cash Flow from Investing Activities Rs m -2,390 -74,560 -
Cash Flow from Financing Activities Rs m -175,910 -97,860 -
Net Cash Flow Rs m -9,190 60,650 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for INFOSYS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.8, an improvement from the EPS of Rs 39.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,554.1, stands at 34.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 5.6 times, while the price to sales ratio stands at 4.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 29.2 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 214.1 236.7
TTM Earnings per share Rs 39.2 45.8
Diluted earnings per share Rs 39.0 45.6
Price to Cash Flow x 33.7 29.2
TTM P/E ratio x 33.9 34.1
Price / Book Value ratio x 4.4 5.6
Market Cap Rs m 6,590,343 6,622,015
Dividends per share (Unadj.) Rs 17.5 27.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for INFOSYS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.5x during FY21, from 2.6x 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 137.6x during FY21, from 130.5x 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 improved and stood at 25.6% during FY21, from 25.5% 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 improved and stood at 35.3% during FY21, from 34.0% 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 18.3% during FY21, from 18.5% 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 2.6 2.5
Debtors’ Days Days 74 70
Interest coverage x 130.5 137.6
Debt to equity ratio x 0.0 0.0
Return on assets % 18.5 18.3
Return on equity % 25.5 25.6
Return on capital employed % 34.0 35.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 774.6 to Rs 1,554.1, registering a gain of Rs 779.5 or around 100.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,610.2 (down 0.5%). Over the last one year it has moved up from 15,680.9 to 29,610.2, a gain of 13,929 points (up 88.8%).

Overall, the S&P BSE SENSEX is up 44.0% over the year.

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

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INFOSYS Announces Quarterly Results (3QFY21); Net Profit Up 16.8% (Quarterly Result Update)

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For the quarter ended December 2020, INFOSYS has posted a net profit of Rs 52 bn (up 16.8% YoY). Sales on the other hand came in at Rs 259 bn (up 12.3% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

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