MINDTREE 2020-21 Annual Report Analysis

Wed, 31 Mar

MINDTREE has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

MINDTREE Income Statement Analysis

• Operating income during the year rose 2.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 53.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.8% in FY21 as against 13.9% in FY20.
• Depreciation charges decreased by 5.7% and finance costs decreased by 4.7% YoY, respectively.
• Other income grew by 100.7% YoY.
• Net profit for the year grew by 76.0% YoY.
• Net profit margins during the year grew from 8.1% in FY20 to 13.9% in FY21.

MINDTREE Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	77,643	79,678	2.6%
Other income	Rs m	756	1,517	100.7%
Total Revenues	Rs m	78,399	81,195	3.6%
Gross profit	Rs m	10,815	16,567	53.2%
Depreciation	Rs m	2,754	2,596	-5.7%
Interest	Rs m	529	504	-4.7%
Profit before tax	Rs m	8,288	14,984	80.8%
Tax	Rs m	1,979	3,879	96.0%
Profit after tax	Rs m	6,309	11,105	76.0%
Gross profit margin	%	13.9	20.8
Effective tax rate	%	23.9	25.9
Net profit margin	%	8.1	13.9

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MINDTREE Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 16 billion as compared to Rs 13 billion in FY20, thereby witnessing an increase of 20.3%.
• Current assets rose 41% and stood at Rs 46 billion, while fixed assets rose 2% and stood at Rs 18 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 63 billion as against Rs 50 billion during FY20, thereby witnessing a growth of 27%.

MINDTREE Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	31,467	43,092	36.9
Current Liabilities	Rs m	13,236	15,926	20.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	49,731	63,263	27.2
Current assets	Rs m	32,549	45,754	40.6
Fixed Assets	Rs m	17,182	17,509	1.9
Total Assets	Rs m	49,731	63,263	27.2

MINDTREE Cash Flow Statement Analysis

• MINDTREE's cash flow from operating activities (CFO) during FY21 stood at Rs 20 billion, an improvement of 141.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -12 billion, an improvement of 5,067.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -4 billion, an improvement of 39% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 4 billion from the Rs 1 billion net cash flows seen during FY20.

MINDTREE Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	8,251	19,960	141.9%
Cash Flow from Investing Activities	Rs m	-229	-11,833	-
Cash Flow from Financing Activities	Rs m	-6,960	-4,225	-
Net Cash Flow	Rs m	1,350	3,688	173.2%

Current Valuations for MINDTREE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 67.4, an improvement from the EPS of Rs 38.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,084.5, stands at 30.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.0 times, while the price to sales ratio stands at 4.3 times.
• The company's price to cash flow (P/CF) ratio stood at 17.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	471.8	483.7
TTM Earnings per share	Rs	38.3	67.4
Diluted earnings per share	Rs	38.3	67.4
Price to Cash Flow	x	15.1	17.1
TTM P/E ratio	x	21.6	30.9
Price / Book Value ratio	x	4.5	5.4
Market Cap	Rs m	141,065	234,808
Dividends per share (Unadj.)	Rs	13.0	25.0

Ratio Analysis for MINDTREE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.9x during FY21, from 2.5x during FY20. 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 30.7x during FY21, from 16.7x during FY20. 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 25.8% during FY21, from 20.0% during FY21. 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 35.9% during FY21, from 28.0% during FY20. 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 18.4% during FY21, from 13.7% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	2.5	2.9
Debtors’ Days	Days	68	58
Interest coverage	x	16.7	30.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.7	18.4
Return on equity	%	20.0	25.8
Return on capital employed	%	28.0	35.9

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

MINDTREE Share Price Performance

Over the last one year, MINDTREE share price has moved up from Rs 828.3 to Rs 2,084.5, registering a gain of Rs 1,256.2 or around 151.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of MINDTREE