BIRLASOFT 2022-23 Annual Report Analysis

Sun, 9 Jul

BIRLASOFT 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.

BIRLASOFT Income Statement Analysis

• Operating income during the year rose 16.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 19.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.7% in FY23 as against 15.5% in FY22.
• Depreciation charges increased by 7.5% and finance costs increased by 42.8% YoY, respectively.
• Other income declined by 54.7% YoY.
• Net profit for the year declined by 28.5% YoY.
• Net profit margins during the year declined from 11.2% in FY22 to 6.9% in FY23.

BIRLASOFT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	41,304	47,948	16.1%
Other income	Rs m	668	303	-54.7%
Total Revenues	Rs m	41,972	48,251	15.0%
Gross profit	Rs m	6,394	5,130	-19.8%
Depreciation	Rs m	765	823	7.5%
Interest	Rs m	130	186	42.8%
Profit before tax	Rs m	6,167	4,424	-28.3%
Tax	Rs m	1,530	1,108	-27.6%
Profit after tax	Rs m	4,636	3,316	-28.5%
Gross profit margin	%	15.5	10.7
Effective tax rate	%	24.8	25.1
Net profit margin	%	11.2	6.9

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BIRLASOFT Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 6 billion as compared to Rs 7 billion in FY22, thereby witnessing an decrease of -5.4%.
• Current assets fell 11% and stood at Rs 22 billion, while fixed assets rose 5% and stood at Rs 9 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 31 billion as against Rs 33 billion during FY22, thereby witnessing a fall of 7%.

BIRLASOFT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	25,605	24,085	-5.9
Current Liabilities	Rs m	6,599	6,240	-5.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	32,913	30,702	-6.7
Current assets	Rs m	24,333	21,698	-10.8
Fixed Assets	Rs m	8,580	9,004	4.9
Total Assets	Rs m	32,913	30,702	-6.7

BIRLASOFT Cash Flow Statement Analysis

• BIRLASOFT's cash flow from operating activities (CFO) during FY23 stood at Rs 6 billion, an improvement of 99.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 2 billion from the Rs -2 billion net cash flows seen during FY22.

BIRLASOFT 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	2,807	5,609	99.8%
Cash Flow from Investing Activities	Rs m	-3,067	2,517	-
Cash Flow from Financing Activities	Rs m	-1,467	-6,362	-
Net Cash Flow	Rs m	-1,755	1,763	-

Current Valuations for BIRLASOFT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.1, an decline from the EPS of Rs 16.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 354.9, stands at 29.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.1 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 25.0 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	147.8	174.4
TTM Earnings per share	Rs	16.6	12.1
Diluted earnings per share	Rs	16.8	12.0
Price to Cash Flow	x	23.2	25.0
TTM P/E ratio	x	27.0	29.5
Price / Book Value ratio	x	4.5	4.3
Market Cap	Rs m	115,194	103,351
Dividends per share (Unadj.)	Rs	4.5	3.5

Ratio Analysis for BIRLASOFT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.5x during FY23, from 3.7x 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 24.8x during FY23, from 48.4x 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 declined and down at 13.8% during FY23, from 18.1% 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 declined and down at 19.1% during FY23, from 24.6% 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 declined and down at 11.4% during FY23, from 14.5% 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	3.7	3.5
Debtors’ Days	Days	75	69
Interest coverage	x	48.4	24.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.5	11.4
Return on equity	%	18.1	13.8
Return on capital employed	%	24.6	19.1

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 343.9 to Rs 354.9, registering a gain of Rs 11.1 or around 3.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,834.1 (down 0.8%). Over the last one year it has moved up from 28,798.1 to 29,834.1, a gain of 1,036 points (up 3.6%).

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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