NIIT 2020-21 Annual Report Analysis

Wed, 31 Mar

NIIT 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.

NIIT Income Statement Analysis

• Operating income during the year rose 4.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 88.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.4% in FY21 as against 147.2% in FY20.
• Depreciation charges decreased by 7.1% and finance costs decreased by 57.2% YoY, respectively.
• Other income declined by 23.3% YoY.
• Net profit for the year declined by 89.2% YoY.
• Net profit margins during the year declined from 144.3% in FY20 to 14.9% in FY21.

NIIT Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	9,199	9,612	4.5%
Other income	Rs m	1,177	903	-23.3%
Total Revenues	Rs m	10,376	10,515	1.3%
Gross profit	Rs m	13,539	1,576	-88.4%
Depreciation	Rs m	666	619	-7.1%
Interest	Rs m	203	87	-57.2%
Profit before tax	Rs m	13,846	1,773	-87.2%
Tax	Rs m	574	337	-41.4%
Profit after tax	Rs m	13,272	1,437	-89.2%
Gross profit margin	%	147.2	16.4
Effective tax rate	%	4.1	19.0
Net profit margin	%	144.3	14.9

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NIIT Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 5 billion as compared to Rs 6 billion in FY20, thereby witnessing an decrease of -16.3%.
• Long-term debt down at Rs 77 million as compared to Rs 239 million during FY20, a fall of 67.7%.
• Current assets rose 3% and stood at Rs 18 billion, while fixed assets rose 16% and stood at Rs 5 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 23 billion as against Rs 22 billion during FY20, thereby witnessing a growth of 6%.

NIIT Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	15,073	16,253	7.8
Current Liabilities	Rs m	5,789	4,843	-16.3
Long-term Debt	Rs m	239	77	-67.7
Total Liabilities	Rs m	21,669	22,960	6.0
Current assets	Rs m	17,209	17,779	3.3
Fixed Assets	Rs m	4,459	5,181	16.2
Total Assets	Rs m	21,669	22,960	6.0

NIIT Cash Flow Statement Analysis

• NIIT's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 362.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -378 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -978 million, an improvement of 88% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 881 million from the Rs -125 million net cash flows seen during FY20.

NIIT 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	505	2,335	362.0%
Cash Flow from Investing Activities	Rs m	7,439	-378	-
Cash Flow from Financing Activities	Rs m	-8,092	-978	-
Net Cash Flow	Rs m	-125	881	-

Current Valuations for NIIT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.1, an decline from the EPS of Rs 93.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 137.8, stands at 11.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 9.9 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	65.0	67.5
TTM Earnings per share	Rs	93.8	10.1
Diluted earnings per share	Rs	99.0	10.7
Price to Cash Flow	x	0.8	9.9
TTM P/E ratio	x	0.8	11.5
Price / Book Value ratio	x	0.8	1.2
Market Cap	Rs m	12,060	20,249
Dividends per share (Unadj.)	Rs	10.0	2.5

Ratio Analysis for NIIT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.7x during FY21, from 3.0x 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 deteriorated and stood at 21.4x during FY21, from 69.1x 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 declined and down at 8.8% during FY21, from 88.1% 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 declined and down at 11.4% during FY21, from 91.8% 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 declined and down at 6.6% during FY21, from 62.2% 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	3.0	3.7
Debtors’ Days	Days	55	53
Interest coverage	x	69.1	21.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	62.2	6.6
Return on equity	%	88.1	8.8
Return on capital employed	%	91.8	11.4

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

NIIT Share Price Performance

Over the last one year, NIIT share price has moved up from Rs 82.1 to Rs 137.8, registering a gain of Rs 55.8 or around 67.9%.

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 NIIT and quarterly results for NIIT)

Read: Latest Annual Report Analysis of NIIT