INFOSYS LTD 2017-18 Annual Report Analysis

Wed, 8 Aug

INFOSYS LTD has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

INFOSYS LTD Income Statement Analysis

• Operating income during the year rose 3.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.0% in FY18 as against 27.2% in FY17.
• Depreciation charges increased by 9.4% YoY.
• Other income grew by 3.7% YoY.
• Net profit for the year grew by 11.7% YoY.
• Net profit margins during the year grew from 20.1% in FY17 to 21.7% in FY18.

INFOSYS LTD Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	684,840	705,220	3.0%
Other income	Rs m	30,800	31,930	3.7%
Total Revenues	Rs m	715,640	737,150	3.0%
Gross profit	Rs m	186,040	190,110	2.2%
Depreciation	Rs m	17,030	18,630	9.4%
Interest	Rs m	0	0	0.0%
Profit before tax	Rs m	199,810	203,410	1.8%
Tax	Rs m	55,980	42,410	-24.2%
Profit after tax	Rs m	143,530	160,290	11.7%
Gross profit margin	%	27.2	27.0
Effective tax rate	%	28.0	20.8
Net profit margin	%	20.1	21.7

INFOSYS LTD Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 141 billion as compared to Rs 140 billion in FY17, thereby witnessing an increase of 0.7%.
• Current assets fell 7% and stood at Rs 500 billion, while fixed assets fell 9% and stood at Rs 142 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 799 billion as against Rs 834 billion during FY17, thereby witnessing a fall of 4%.

INFOSYS LTD Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	689,820	649,230	-5.9
Current Liabilities	Rs m	140,130	141,050	0.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	833,550	798,900	-4.2
Current assets	Rs m	537,050	500,170	-6.9
Fixed Assets	Rs m	156,150	141,800	-9.2
Total Assets	Rs m	833,550	798,900	-4.2

INFOSYS LTD Cash Flow Statement Analysis

• INFOSYS LTD's cash flow from operating activities (CFO) during FY18 stood at Rs 132 billion, an improvement of 14.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 45 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -205 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -28 billion from the Rs -101 billion net cash flows seen during FY17.

INFOSYS LTD Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	115,310	132,180	14.6%
Cash Flow from Investing Activities	Rs m	-145,420	44,520	-
Cash Flow from Financing Activities	Rs m	-69,390	-205,050	-
Net Cash Flow	Rs m	-100,720	-27,540	-

Current Valuations for INFOSYS LTD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 73.4, an improvement from the EPS of Rs 62.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,365.0, stands at 19.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 17.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	298.2	322.9
TTM Earnings per share	Rs	62.5	73.4
Diluted earnings per share	Rs	62.5	69.8
Price to Cash Flow	x	19.5	17.5
TTM P/E ratio	x	19.4	19.4
Price / Book Value ratio	x	3.6	3.5
Market Cap	Rs m	3,135,208	3,135,236
Dividends per share (Unadj.)	Rs	25.8	43.5

Ratio Analysis for INFOSYS LTD

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.5x during FY18, from 3.8x during FY17. 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 improved and stood at 24.7% during FY18, from 20.8% during FY18. 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 31.2% during FY18, from 28.9% during FY17. 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 20.1% during FY18, from 17.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	3.8	3.5
Debtors’ Days	Days	66	68
Interest coverage	x	0.0	0.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.2	20.1
Return on equity	%	20.8	24.7
Return on capital employed	%	28.9	31.2

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

INFOSYS LTD Share Price Performance

Over the last one year, INFOSYS LTD share price has moved up from Rs 964.6 to Rs 1,365.0, registering a gain of Rs 400.4 or around 41.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 14,566.6 (down 0.1%). Over the last one year it has moved up from 10,222.5 to 14,566.6, a gain of 4,344 points (up 42.5%).

Overall, the S&P BSE SENSEX is up 17.4% over the year.

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