NIIT 2022-23 Annual Report Analysis

Thu, 21 Sep

NIIT has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

NIIT Income Statement Analysis

• Operating income during the year rose 36.1% on a year-on-year (YoY) basis.
• The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 1.3% in FY23 as against 0.2% in FY22.
• Depreciation charges increased by 7.0% and finance costs increased by 4.5% YoY, respectively.
• Other income declined by 5.7% YoY.
• Net profit for the year declined by 64.9% YoY.
• Net profit margins during the year declined from 12.6% in FY22 to 3.3% in FY23.

NIIT Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	2,508	3,415	36.1%
Other income	Rs m	404	381	-5.7%
Total Revenues	Rs m	2,913	3,796	30.3%
Gross profit	Rs m	-4	-43	NA
Depreciation	Rs m	154	164	7.0%
Interest	Rs m	13	14	4.5%
Profit before tax	Rs m	233	159	-31.7%
Tax	Rs m	-84	48	NA
Profit after tax	Rs m	317	111	-64.9%
Gross profit margin	%	-0.2	-1.3
Effective tax rate	%	-36.0	30.2
Net profit margin	%	12.6	3.3

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NIIT Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 1 billion as compared to Rs 6 billion in FY22, thereby witnessing an decrease of -77.4%.
• Current assets fell 51% and stood at Rs 8 billion, while fixed assets fell 30% and stood at Rs 3 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 11 billion as against Rs 21 billion during FY22, thereby witnessing a fall of 46%.

NIIT Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	14,888	9,728	-34.7
Current Liabilities	Rs m	5,771	1,304	-77.4
Long-term Debt	Rs m	5	0	-100.0
Total Liabilities	Rs m	21,311	11,411	-46.5
Current assets	Rs m	16,594	8,093	-51.2
Fixed Assets	Rs m	4,717	3,318	-29.7
Total Assets	Rs m	21,311	11,411	-46.5

NIIT Cash Flow Statement Analysis

• NIIT's cash flow from operating activities (CFO) during FY23 stood at Rs 39 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 248 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -337 million, an improvement of 91% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -48 million from the Rs 1 billion net cash flows seen during FY22.

NIIT Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	2,878	39	-98.7%
Cash Flow from Investing Activities	Rs m	2,272	248	-89.1%
Cash Flow from Financing Activities	Rs m	-3,861	-337	-
Net Cash Flow	Rs m	1,309	-48	-

Current Valuations for NIIT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.8, an decline from the EPS of Rs 2.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 123.7, stands at 18.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 4.9 times.
• The company's price to cash flow (P/CF) ratio stood at 55.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	18.7	25.4
TTM Earnings per share	Rs	2.4	0.8
Diluted earnings per share	Rs	2.4	0.8
Price to Cash Flow	x	43.3	55.2
TTM P/E ratio	x	11.3	18.3
Price / Book Value ratio	x	3.5	1.6
Market Cap	Rs m	51,519	15,208
Dividends per share (Unadj.)	Rs	3.0	0.0

Ratio Analysis for NIIT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 6.2x during FY23, from 2.9x during FY22. 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 12.3x during FY23, from 18.3x during FY22. 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 1.1% during FY23, from 2.1% during FY23. 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 1.8% during FY23, from 1.7% during FY22. 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 1.1% during FY23, from 1.6% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.9	6.2
Debtors’ Days	Days	274	33
Interest coverage	x	18.3	12.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	1.6	1.1
Return on equity	%	2.1	1.1
Return on capital employed	%	1.7	1.8

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 77.9 to Rs 123.7, registering a gain of Rs 45.7 or around 58.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 33,044.9 (down 0.0%). Over the last one year it has moved up from 27,354.3 to 33,044.9, a gain of 5,691 points (up 20.8%).

Overall, the S&P BSE SENSEX is up 10.9% over the year.

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