INFOSYS 2022-23 Annual Report Analysis

Mon, 17 Apr

INFOSYS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

INFOSYS Income Statement Analysis

• Operating income during the year rose 20.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 23.5% in FY23 as against 25.9% in FY22.
• Depreciation charges increased by 21.5% and finance costs increased by 42.0% YoY, respectively.
• Other income grew by 45.9% YoY.
• Net profit for the year grew by 8.9% YoY.
• Net profit margins during the year declined from 18.2% in FY22 to 16.4% in FY23.

INFOSYS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,216,410	1,467,670	20.7%
Other income	Rs m	22,950	33,480	45.9%
Total Revenues	Rs m	1,239,360	1,501,150	21.1%
Gross profit	Rs m	314,910	344,830	9.5%
Depreciation	Rs m	34,760	42,250	21.5%
Interest	Rs m	2,000	2,840	42.0%
Profit before tax	Rs m	301,100	333,220	10.7%
Tax	Rs m	79,640	92,140	15.7%
Profit after tax	Rs m	221,460	241,080	8.9%
Gross profit margin	%	25.9	23.5
Effective tax rate	%	26.4	27.7
Net profit margin	%	18.2	16.4

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INFOSYS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 392 billion as compared to Rs 336 billion in FY22, thereby witnessing an increase of 16.6%.
• Current assets rose 6% and stood at Rs 709 billion, while fixed assets rose 8% and stood at Rs 537 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,246 billion as against Rs 1,167 billion during FY22, thereby witnessing a growth of 7%.

INFOSYS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	747,440	745,290	-0.3
Current Liabilities	Rs m	336,030	391,860	16.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,166,730	1,245,710	6.8
Current assets	Rs m	671,850	708,810	5.5
Fixed Assets	Rs m	494,880	536,900	8.5
Total Assets	Rs m	1,166,730	1,245,710	6.8

INFOSYS Cash Flow Statement Analysis

• INFOSYS's cash flow from operating activities (CFO) during FY23 stood at Rs 225 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -12 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -267 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -53 billion from the Rs -72 billion net cash flows seen during FY22.

INFOSYS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	238,850	224,670	-5.9%
Cash Flow from Investing Activities	Rs m	-64,160	-12,090	-
Cash Flow from Financing Activities	Rs m	-246,420	-266,950	-
Net Cash Flow	Rs m	-72,420	-52,990	-

Current Valuations for INFOSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 58.3, an improvement from the EPS of Rs 52.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,258.1, stands at 21.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.0 times, while the price to sales ratio stands at 3.5 times.
• The company's price to cash flow (P/CF) ratio stood at 23.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	290.1	354.8
TTM Earnings per share	Rs	52.8	58.3
Diluted earnings per share	Rs	53.4	58.1
Price to Cash Flow	x	30.9	23.8
TTM P/E ratio	x	35.7	21.7
Price / Book Value ratio	x	9.2	9.1
Market Cap	Rs m	6,846,142	6,753,584
Dividends per share (Unadj.)	Rs	31.0	16.5

Ratio Analysis for INFOSYS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.8x during FY23, from 2.0x during FY22. 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 118.3x during FY23, from 151.6x during FY22. 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 32.3% during FY23, from 29.6% during FY23. 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 45.1% during FY23, from 40.6% during FY22. 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 improved and stood at 19.6% during FY23, from 19.2% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.0	1.8
Debtors’ Days	Days	7	6
Interest coverage	x	151.6	118.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	19.2	19.6
Return on equity	%	29.6	32.3
Return on capital employed	%	40.6	45.1

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 0.0 to Rs 1,258.1, registering a gain of Rs 1,258.1 or around 0.0%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,887.7 (down 4.8%). Over the last one year it has moved up from 0.0 to 26,887.7, a gain of 26,888 points (up 0.0%).

Overall, the S&P BSE SENSEX is up 2.7% 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