INFO EDGE 2018-19 Annual Report Analysis

Sun, 31 Mar

INFO EDGE has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

INFO EDGE Income Statement Analysis

• Operating income during the year rose 16.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 62.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 81.3% in FY19 as against 58.2% in FY18.
• Depreciation charges decreased by 25.3% and finance costs increased by 36.4% YoY, respectively.
• Other income grew by 35.5% YoY.
• Net profit for the year grew by 65.5% YoY.
• Net profit margins during the year grew from 55.2% in FY18 to 78.4% in FY19.

INFO EDGE Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	9,882	11,509	16.5%
Other income	Rs m	888	1,203	35.5%
Total Revenues	Rs m	10,770	12,712	18.0%
Gross profit	Rs m	5,756	9,352	62.5%
Depreciation	Rs m	296	221	-25.3%
Interest	Rs m	51	70	36.4%
Profit before tax	Rs m	6,296	10,264	63.0%
Tax	Rs m	845	1,243	47.1%
Profit after tax	Rs m	5,451	9,021	65.5%
Gross profit margin	%	58.2	81.3
Effective tax rate	%	13.4	12.1
Net profit margin	%	55.2	78.4

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INFO EDGE Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 6 billion as compared to Rs 6 billion in FY18, thereby witnessing an increase of 16.1%.
• Long-term debt stood at Rs 4 million as compared to Rs 3 million during FY18, a growth of 33.1%.
• Current assets rose 8% and stood at Rs 19 billion, while fixed assets rose 42% and stood at Rs 19 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 39 billion as against Rs 32 billion during FY18, thereby witnessing a growth of 23%.

INFO EDGE Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	19,660	25,200	28.2
Current Liabilities	Rs m	5,554	6,451	16.1
Long-term Debt	Rs m	3	4	33.1
Total Liabilities	Rs m	31,501	38,713	22.9
Current assets	Rs m	17,887	19,331	8.1
Fixed Assets	Rs m	13,614	19,382	42.4
Total Assets	Rs m	31,501	38,713	22.9

INFO EDGE Cash Flow Statement Analysis

• INFO EDGE's cash flow from operating activities (CFO) during FY19 stood at Rs 3 billion, an improvement of 8.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -591 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -781 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 1 billion from the Rs 293 million net cash flows seen during FY18.

INFO EDGE Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	2,535	2,757	8.8%
Cash Flow from Investing Activities	Rs m	-1,494	-591	-
Cash Flow from Financing Activities	Rs m	-748	-781	-
Net Cash Flow	Rs m	293	1,385	373.3%

Current Valuations for INFO EDGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 73.9, an improvement from the EPS of Rs 44.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,842.9, stands at 84.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 9.4 times, while the price to sales ratio stands at 19.5 times.
• The company's price to cash flow (P/CF) ratio stood at 20.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	81.3	94.3
TTM Earnings per share	Rs	44.8	73.9
Diluted earnings per share	Rs	42.3	69.9
Price to Cash Flow	x	26.2	20.1
TTM P/E ratio	x	82.5	84.4
Price / Book Value ratio	x	7.0	7.4
Market Cap	Rs m	137,244	186,157
Dividends per share (Unadj.)	Rs	5.5	6.0

Ratio Analysis for INFO EDGE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.0x during FY19, from 3.2x during FY18. 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 147.4x during FY19, from 123.5x during FY18. 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 35.8% during FY19, from 27.7% during FY19. 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 41.0% during FY19, from 32.3% during FY18. 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 23.5% during FY19, from 17.5% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	3.2	3.0
Debtors’ Days	Days	2	2
Interest coverage	x	123.5	147.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.5	23.5
Return on equity	%	27.7	35.8
Return on capital employed	%	32.3	41.0

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

INFO EDGE Share Price Performance

Over the last one year, INFO EDGE share price has moved up from Rs 1,166.8 to Rs 1,842.9, registering a gain of Rs 676.1 or around 57.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,280.3 (up 0.4%). Over the last one year it has moved up from 12,100.6 to 15,280.3, a gain of 3,180 points (up 26.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of INFO EDGE