CYIENT 2019-20 Annual Report Analysis

Tue, 31 Mar

CYIENT 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.

CYIENT Income Statement Analysis

• Operating income during the year fell 4.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 10.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.4% in FY20 as against 13.2% in FY19.
• Depreciation charges increased by 68.6% and finance costs increased by 49.1% YoY, respectively.
• Other income grew by 3.5% YoY.
• Net profit for the year declined by 27.9% YoY.
• Net profit margins during the year declined from 10.3% in FY19 to 7.8% in FY20.

CYIENT Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	46,175	44,274	-4.1%
Other income	Rs m	1,529	1,583	3.5%
Total Revenues	Rs m	47,704	45,857	-3.9%
Gross profit	Rs m	6,104	5,489	-10.1%
Depreciation	Rs m	1,114	1,878	68.6%
Interest	Rs m	326	486	49.1%
Profit before tax	Rs m	6,193	4,708	-24.0%
Tax	Rs m	1,427	1,270	-11.0%
Profit after tax	Rs m	4,766	3,438	-27.9%
Gross profit margin	%	13.2	12.4
Effective tax rate	%	23.0	27.0
Net profit margin	%	10.3	7.8

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CYIENT Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 15 billion as compared to Rs 13 billion in FY19, thereby witnessing an increase of 14.1%.
• Long-term debt down at Rs 859 million as compared to Rs 1 billion during FY19, a fall of 23.0%.
• Current assets fell 1% and stood at Rs 29 billion, while fixed assets rose 13% and stood at Rs 20 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 49 billion as against Rs 47 billion during FY19, thereby witnessing a growth of 4%.

CYIENT Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	25,570	25,503	-0.3
Current Liabilities	Rs m	13,494	15,394	14.1
Long-term Debt	Rs m	1,116	859	-23.0
Total Liabilities	Rs m	47,484	49,475	4.2
Current assets	Rs m	29,449	29,177	-0.9
Fixed Assets	Rs m	18,035	20,298	12.5
Total Assets	Rs m	47,484	49,475	4.2

CYIENT Cash Flow Statement Analysis

• CYIENT's cash flow from operating activities (CFO) during FY20 stood at Rs 6 billion, an improvement of 57.4% 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 -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs -101 million from the Rs -521 million net cash flows seen during FY19.

CYIENT 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	3,701	5,824	57.4%
Cash Flow from Investing Activities	Rs m	-2,197	-1,570	-
Cash Flow from Financing Activities	Rs m	-2,321	-4,463	-
Net Cash Flow	Rs m	-521	-101	-

Current Valuations for CYIENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.3, an decline from the EPS of Rs 43.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 229.7, stands at 7.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.0 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 8.9 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	418.0	402.6
TTM Earnings per share	Rs	43.1	31.3
Diluted earnings per share	Rs	43.2	31.2
Price to Cash Flow	x	12.2	8.9
TTM P/E ratio	x	15.0	7.4
Price / Book Value ratio	x	3.1	1.9
Market Cap	Rs m	80,541	47,453
Dividends per share (Unadj.)	Rs	15.0	15.0

Ratio Analysis for CYIENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY20, from 2.2x 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 deteriorated and stood at 10.7x during FY20, from 20.0x 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 declined and down at 13.5% during FY20, from 18.6% 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 declined and down at 19.7% during FY20, from 24.4% 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 7.9% during FY20, from 10.7% 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	2.2	1.9
Debtors’ Days	Days	64	60
Interest coverage	x	20.0	10.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.7	7.9
Return on equity	%	18.6	13.5
Return on capital employed	%	24.4	19.7

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

CYIENT Share Price Performance

Over the last one year, CYIENT share price has moved down from Rs 648.0 to Rs 229.7, registering a loss of Rs 418.3 or around 64.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,842.7 (up 3.0%). Over the last one year it has moved down from 15,280.3 to 12,842.7, a loss of 2,438 points (down 16.0%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

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

Read: Latest Annual Report Analysis of CYIENT