CYIENT LTD 2017-18 Annual Report Analysis

Sat, 31 Mar

CYIENT 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.

CYIENT Income Statement Analysis

• Operating income during the year rose 9.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 21.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.6% in FY18 as against 12.3% in FY17.
• Depreciation charges increased by 10.4% and finance costs increased by 18.6% YoY, respectively.
• Other income grew by 42.1% YoY.
• Net profit for the year grew by 27.9% YoY.
• Net profit margins during the year grew from 9.2% in FY17 to 10.7% in FY18.

CYIENT Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	35,651	39,103	9.7%
Other income	Rs m	1,069	1,519	42.1%
Total Revenues	Rs m	36,720	40,622	10.6%
Gross profit	Rs m	4,374	5,304	21.3%
Depreciation	Rs m	953	1,052	10.4%
Interest	Rs m	172	204	18.6%
Profit before tax	Rs m	4,318	5,567	28.9%
Tax	Rs m	1,045	1,380	32.1%
Profit after tax	Rs m	3,273	4,187	27.9%
Gross profit margin	%	12.3	13.6
Effective tax rate	%	24.2	24.8
Net profit margin	%	9.2	10.7

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CYIENT Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 11 billion as compared to Rs 11 billion in FY17, thereby witnessing an increase of 5.3%.
• Long-term debt stood at Rs 630 million as compared to Rs 492 million during FY17, a growth of 28.0%.
• Current assets rose 13% and stood at Rs 26 billion, while fixed assets rose 9% and stood at Rs 15 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 42 billion as against Rs 37 billion during FY17, thereby witnessing a growth of 12%.

CYIENT Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	20,967	23,218	10.7
Current Liabilities	Rs m	10,886	11,463	5.3
Long-term Debt	Rs m	492	630	28.0
Total Liabilities	Rs m	37,299	41,633	11.6
Current assets	Rs m	23,285	26,298	12.9
Fixed Assets	Rs m	14,014	15,335	9.4
Total Assets	Rs m	37,299	41,633	11.6

CYIENT Cash Flow Statement Analysis

• CYIENT's cash flow from operating activities (CFO) during FY18 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -869 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 1 billion from the Rs 2 billion net cash flows seen during FY17.

CYIENT 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	4,199	2,963	-29.4%
Cash Flow from Investing Activities	Rs m	-1,803	-869	-
Cash Flow from Financing Activities	Rs m	-934	-1,359	-
Net Cash Flow	Rs m	1,739	1,033	-40.6%

Current Valuations for CYIENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 37.2, an improvement from the EPS of Rs 29.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 688.8, stands at 18.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 12.4 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	316.7	347.3
TTM Earnings per share	Rs	29.1	37.2
Diluted earnings per share	Rs	29.7	38.0
Price to Cash Flow	x	12.2	12.4
TTM P/E ratio	x	15.2	18.0
Price / Book Value ratio	x	2.6	2.8
Market Cap	Rs m	54,654	65,137
Dividends per share (Unadj.)	Rs	10.5	13.0

Ratio Analysis for CYIENT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY18, from 2.1x during FY17. 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 28.3x during FY18, from 26.1x during FY17. 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 18.0% during FY18, from 15.6% 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 24.2% during FY18, from 20.9% 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 10.5% during FY18, from 9.2% 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	2.1	2.3
Debtors’ Days	Days	67	65
Interest coverage	x	26.1	28.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.2	10.5
Return on equity	%	15.6	18.0
Return on capital employed	%	20.9	24.2

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 up from Rs 468.8 to Rs 688.8, registering a gain of Rs 220.1 or around 46.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

Overall, the S&P BSE SENSEX is up 12.1% 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