L&T TECHONOLOGY 2021-22 Annual Report Analysis

Sat, 25 Jun

L&T TECHONOLOGY has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

L&T TECHONOLOGY Income Statement Analysis

• Operating income during the year rose 20.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 42.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.1% in FY22 as against 17.8% in FY21.
• Depreciation charges decreased by 1.8% and finance costs decreased by 4.0% YoY, respectively.
• Other income declined by 4.5% YoY.
• Net profit for the year grew by 44.1% YoY.
• Net profit margins during the year grew from 12.2% in FY21 to 14.6% in FY22.

L&T TECHONOLOGY Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	54,497	65,697	20.6%
Other income	Rs m	1,916	1,829	-4.5%
Total Revenues	Rs m	56,413	67,526	19.7%
Gross profit	Rs m	9,695	13,844	42.8%
Depreciation	Rs m	2,183	2,144	-1.8%
Interest	Rs m	455	437	-4.0%
Profit before tax	Rs m	8,973	13,092	45.9%
Tax	Rs m	2,308	3,486	51.0%
Profit after tax	Rs m	6,665	9,606	44.1%
Gross profit margin	%	17.8	21.1
Effective tax rate	%	25.7	26.6
Net profit margin	%	12.2	14.6

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L&T TECHONOLOGY Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 14 billion as compared to Rs 11 billion in FY21, thereby witnessing an increase of 25.6%.
• Current assets rose 23% and stood at Rs 43 billion, while fixed assets rose 12% and stood at Rs 18 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 61 billion as against Rs 51 billion during FY21, thereby witnessing a growth of 20%.

L&T TECHONOLOGY Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	34,434	41,438	20.3
Current Liabilities	Rs m	10,982	13,789	25.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	50,662	60,772	20.0
Current assets	Rs m	35,026	43,251	23.5
Fixed Assets	Rs m	15,636	17,521	12.1
Total Assets	Rs m	50,662	60,772	20.0

L&T TECHONOLOGY Cash Flow Statement Analysis

• L&T TECHONOLOGY's cash flow from operating activities (CFO) during FY22 stood at Rs 10 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 597 million from the Rs -356 million net cash flows seen during FY21.

L&T TECHONOLOGY Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	13,325	10,062	-24.5%
Cash Flow from Investing Activities	Rs m	-10,054	-4,483	-
Cash Flow from Financing Activities	Rs m	-3,627	-4,982	-
Net Cash Flow	Rs m	-356	597	-

Current Valuations for L&T TECHONOLOGY

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 91.4, an improvement from the EPS of Rs 63.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,051.4, stands at 33.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.8 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 37.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	521.5	625.4
TTM Earnings per share	Rs	63.8	91.4
Diluted earnings per share	Rs	63.1	91.0
Price to Cash Flow	x	31.7	37.7
TTM P/E ratio	x	42.0	33.5
Price / Book Value ratio	x	6.0	10.7
Market Cap	Rs m	205,094	443,004
Dividends per share (Unadj.)	Rs	22.0	35.0

Ratio Analysis for L&T TECHONOLOGY

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.1x during FY22, from 3.2x during FY21. 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 31.0x during FY22, from 20.7x during FY21. 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 23.2% during FY22, from 19.4% during FY22. 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 32.6% during FY22, from 27.4% during FY21. 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 16.5% during FY22, from 14.1% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	3.2	3.1
Debtors’ Days	Days	83	94
Interest coverage	x	20.7	31.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	14.1	16.5
Return on equity	%	19.4	23.2
Return on capital employed	%	27.4	32.6

To see how L&T TECHONOLOGY has performed over the last 5 years, please visit here.

L&T TECHONOLOGY Share Price Performance

Over the last one year, L&T TECHONOLOGY share price has moved up from Rs 2,926.2 to Rs 3,051.4, registering a gain of Rs 125.3 or around 4.3%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,147.6 (down 0.6%). Over the last one year it has moved down from 30,055.6 to 28,147.6, a loss of 1,908 points (down 6.3%).

Overall, the S&P BSE SENSEX is up 0.8% over the year.

(To know more, check out historical annual results for L&T TECHONOLOGY and quarterly results for L&T TECHONOLOGY)

Read: Latest Annual Report Analysis of L&T TECHNOLOGY SERVICES