BIRLASOFT 2017-18 Annual Report Analysis

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BIRLASOFT 2017-18 Annual Report Analysis
Fri, 15 Mar

BIRLASOFT 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.

BIRLASOFT Income Statement Analysis

  • Operating income during the year rose 10.4% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 8.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.3% in FY18 as against 10.5% in FY17.
  • Depreciation charges increased by 2.0% and finance costs decreased by 23.3% YoY, respectively.
  • Other income grew by 118.0% YoY.
  • Net profit for the year grew by 6.6% YoY.
  • Net profit margins during the year declined from 7.1% in FY17 to 6.9% in FY18.

BIRLASOFT Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 33,200 36,637 10.4%
Other income Rs m 207 450 118.0%
Total Revenues Rs m 33,407 37,087 11.0%
Gross profit Rs m 3,486 3,785 8.6%
Depreciation Rs m 827 843 2.0%
Interest Rs m 136 104 -23.3%
Profit before tax Rs m 2,730 3,288 20.4%
Tax Rs m 606 698 15.2%
Profit after tax Rs m 2,385 2,544 6.6%
Gross profit margin % 10.5 10.3
Effective tax rate % 22.2 21.2
Net profit margin % 7.1 6.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



BIRLASOFT Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 8 billion as compared to Rs 8 billion in FY17, thereby witnessing an decrease of -1.7%.
  • Long-term debt down at Rs 662 million as compared to Rs 985 million during FY17, a fall of 32.8%.
  • Current assets rose 13% and stood at Rs 17 billion, while fixed assets rose 13% and stood at Rs 3 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 27 billion as against Rs 25 billion during FY17, thereby witnessing a growth of 8%.

BIRLASOFT Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 15,825 18,169 14.8
 
Current Liabilities Rs m 7,746 7,618 -1.7
Long-term Debt Rs m 985 662 -32.8
Total Liabilities Rs m 25,284 27,329 8.1
 
Current assets Rs m 14,704 16,572 12.7
Fixed Assets Rs m 2,812 3,164 12.5
Total Assets Rs m 25,284 27,329 8.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



BIRLASOFT Cash Flow Statement Analysis

  • BIRLASOFT's cash flow from operating activities (CFO) during FY18 stood at Rs 4 billion, an improvement of 149.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion, an improvement of 28.3% 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 862 million from the Rs 930 million net cash flows seen during FY17.

BIRLASOFT 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 1,630 4,074 149.9%
Cash Flow from Investing Activities Rs m -1,502 -1,927 -
Cash Flow from Financing Activities Rs m 801 -1,284 -
Net Cash Flow Rs m 930 862 -7.3%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for BIRLASOFT

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.4, an improvement from the EPS of Rs 12.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 102.0, stands at 7.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 0.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.8 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 176.4 193.3
TTM Earnings per share Rs 12.7 13.4
Diluted earnings per share Rs 12.1 12.9
Price to Cash Flow x 6.0 5.8
TTM P/E ratio x 6.7 7.1
Price / Book Value ratio x 1.9 1.8
Market Cap Rs m 19,195 20,145
Dividends per share (Unadj.) Rs 2.2 2.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for BIRLASOFT

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.2x during FY18, from 1.9x 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 32.5x during FY18, from 21.1x 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 declined and down at 14.0% during FY18, from 15.1% 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 declined and down at 17.8% during FY18, from 18.6% 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 declined and down at 9.7% during FY18, from 10.0% 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 1.9 2.2
Debtors’ Days Days 86 80
Interest coverage x 21.1 32.5
Debt to equity ratio x 0.1 0.0
Return on assets % 10.0 9.7
Return on equity % 15.1 14.0
Return on capital employed % 18.6 17.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

BIRLASOFT Share Price Performance

Over the last one year, BIRLASOFT share price has moved up from Rs 143.9 to Rs 102.0, registering a loss of Rs 41.9 or around 29.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,216.2 (up 2.1%). Over the last one year it has moved up from 12,411.3 to 15,216.2, a gain of 2,805 points (up 22.6%).

Overall, the S&P BSE SENSEX is up 13.0% over the year.

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

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