NIIT 2020-21 Annual Report Analysis

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NIIT 2020-21 Annual Report Analysis
Mon, 8 Nov

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 127.9% in FY20 to 13.7% 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 % 127.9 13.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 303.5, stands at 22.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 2.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 19.7 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 99.3 10.7
Price to Cash Flow x 3.1 19.7
TTM P/E ratio x 23.5 22.2
Price / Book Value ratio x 0.8 1.2
Market Cap Rs m 42,941 40,554
Dividends per share (Unadj.) Rs 10.0 2.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 132.9 to Rs 303.5, registering a gain of Rs 170.6 or around 128.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 34,794.5 (up 1.1%). Over the last one year it has moved up from 21,707.5 to 34,794.5, a gain of 13,087 points (up 60.3%).

Overall, the S&P BSE SENSEX is up 49.1% over the year.

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

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