NIIT 2018-19 Annual Report Analysis

Sun, 31 Mar

NIIT 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.

NIIT Income Statement Analysis

• Operating income during the year rose 7.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.3% in FY19 as against 8.4% in FY18.
• Depreciation charges decreased by 17.9% and finance costs increased by 2.1% YoY, respectively.
• Other income grew by 3.2% YoY.
• Net profit for the year grew by 208.5% YoY.
• Net profit margins during the year declined from 0.3% in FY18 to 0.8% in FY19.

NIIT Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	8,505	9,108	7.1%
Other income	Rs m	86	89	3.2%
Total Revenues	Rs m	8,591	9,197	7.1%
Gross profit	Rs m	713	663	-7.0%
Depreciation	Rs m	401	329	-17.9%
Interest	Rs m	221	226	2.1%
Profit before tax	Rs m	177	197	11.6%
Tax	Rs m	201	271	35.2%
Profit after tax	Rs m	-24	-74	208.5%
Gross profit margin	%	8.4	7.3
Effective tax rate	%	113.6	137.6
Net profit margin	%	-0.3	-0.8

Must See: Do You Invest in Midcap Stocks? Here's a Great News for You

NIIT Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 4 billion as compared to Rs 5 billion in FY18, thereby witnessing an decrease of -18.5%.
• Long-term debt stood at Rs 1 billion as compared to Rs 928 million during FY18, a growth of 57.8%.
• Current assets rose 137% and stood at Rs 11 billion, while fixed assets fell 63% and stood at Rs 3 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 15 billion as against Rs 14 billion during FY18, thereby witnessing a growth of 6%.

NIIT Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	7,117	8,180	14.9
Current Liabilities	Rs m	5,007	4,081	-18.5
Long-term Debt	Rs m	928	1,464	57.8
Total Liabilities	Rs m	13,918	14,744	5.9
Current assets	Rs m	4,769	11,326	137.5
Fixed Assets	Rs m	9,149	3,418	-62.6
Total Assets	Rs m	13,918	14,744	5.9

NIIT Cash Flow Statement Analysis

• NIIT's cash flow from operating activities (CFO) during FY19 stood at Rs 457 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -590 million, an improvement of 12.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 12 million, an improvement of 106% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -72 million from the Rs 42 million net cash flows seen during FY18.

NIIT 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	880	457	-48.1%
Cash Flow from Investing Activities	Rs m	-524	-590	-
Cash Flow from Financing Activities	Rs m	-210	12	-
Net Cash Flow	Rs m	42	-72	-

Current Valuations for NIIT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -0.4, an decline from the EPS of Rs -0.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 90.4, stands at 68.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 1.7 times.
• The company's price to cash flow (P/CF) ratio stood at 61.0 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	51.1	54.4
TTM Earnings per share	Rs	-0.1	-0.4
Diluted earnings per share	Rs	-0.2	-0.6
Price to Cash Flow	x	35.4	61.0
TTM P/E ratio	x	259.5	68.2
Price / Book Value ratio	x	2.3	1.9
Market Cap	Rs m	16,060	15,547
Dividends per share (Unadj.)	Rs	0.0	5.0

Ratio Analysis for NIIT

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.8x during FY19, from 1.0x 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 1.9x during FY19, from 1.8x 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 declined and down at -0.9% during FY19, from -0.3% 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 declined and down at 4.4% during FY19, from 4.9% 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 declined and down at 1.0% during FY19, from 1.4% 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	1.0	2.8
Debtors’ Days	Days	71	66
Interest coverage	x	1.8	1.9
Debt to equity ratio	x	0.1	0.2
Return on assets	%	1.4	1.0
Return on equity	%	-0.3	-0.9
Return on capital employed	%	4.9	4.4

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 down from Rs 99.7 to Rs 90.4, registering a loss of Rs 9.4 or around 9.4%.

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 NIIT and quarterly results for NIIT)

Read: Latest Annual Report Analysis of NIIT