NIIT TECHNOLOGIES 2016-17 Annual Report Analysis

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NIIT TECHNOLOGIES 2016-17 Annual Report Analysis
Fri, 15 Mar

NIIT TECHNOLOGIES has announced its results for the year ended March 2017. Let us have a look at the detailed performance review of the company during FY16-17.

NIIT TECHNOLOGIES Income Statement Analysis

  • Operating income during the year rose 4.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 0.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.1% in FY17 as against 17.7% in FY16.
  • Depreciation charges increased by 16.0% and finance costs increased by 23.0% YoY, respectively.
  • Other income grew by 30.9% YoY.
  • Net profit for the year declined by 2.8% YoY.
  • Net profit margins during the year declined from 10.4% in FY16 to 9.6% in FY17.

NIIT TECHNOLOGIES Income Statement 2016-17

No. of Mths Year Ending 12 Mar-16* 12 Mar-17* % Change
Net Sales Rs m 26,824 28,021 4.5%
Other income Rs m 206 269 30.9%
Total Revenues Rs m 27,030 28,290 4.7%
Gross profit Rs m 4,759 4,795 0.8%
Depreciation Rs m 1,101 1,277 16.0%
Interest Rs m 49 60 23.0%
Profit before tax Rs m 3,815 3,727 -2.3%
Tax Rs m 832 785 -5.6%
Profit after tax Rs m 2,800 2,721 -2.8%
Gross profit margin % 17.7 17.1
Effective tax rate % 21.8 21.1
Net profit margin % 10.4 9.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NIIT TECHNOLOGIES Balance Sheet Analysis

  • The company's current liabilities during FY17 down at Rs 4 billion as compared to Rs 5 billion in FY16, thereby witnessing an decrease of -10.9%.
  • Long-term debt stood at Rs 214 million as compared to Rs 64 million during FY16, a growth of 235.4%.
  • Current assets rose 14% and stood at Rs 15 billion, while fixed assets rose 1% and stood at Rs 8 billion in FY17.
  • Overall, the total assets and liabilities for FY17 stood at Rs 24 billion as against Rs 22 billion during FY16, thereby witnessing a growth of 9%.

NIIT TECHNOLOGIES Balance Sheet as on March 2017

No. of Mths Year Ending 12 Mar-16* 12 Mar-17* % Change
Networth Rs m 16,553 16,862 1.9
 
Current Liabilities Rs m 5,027 4,479 -10.9
Long-term Debt Rs m 64 214 235.4
Total Liabilities Rs m 22,491 24,456 8.7
 
Current assets Rs m 12,774 14,606 14.3
Fixed Assets Rs m 8,372 8,476 1.2
Total Assets Rs m 22,491 24,456 8.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



NIIT TECHNOLOGIES Cash Flow Statement Analysis

  • NIIT TECHNOLOGIES's cash flow from operating activities (CFO) during FY17 stood at Rs 5 billion, an improvement of 31.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY17 stood at Rs -3 billion, an improvement of 0.7% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY17 stood at Rs -669 million, an improvement of 8% on a YoY basis.
  • Overall, net cash flows for the company during FY17 stood at Rs 623 million from the Rs -165 million net cash flows seen during FY16.

NIIT TECHNOLOGIES Cash Flow Statement 2016-17

Particulars No. of months 12 12 % Change
Year Ending Mar-16 Mar-17
Cash Flow from Operating Activities Rs m 3,603 4,723 31.1%
Cash Flow from Investing Activities Rs m -3,041 -3,063 -
Cash Flow from Financing Activities Rs m -727 -669 -
Net Cash Flow Rs m -165 623 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for NIIT TECHNOLOGIES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.3, an decline from the EPS of Rs 45.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,329.6, stands at 19.8 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 1.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 20.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-16* 12 Mar-17*
Sales per share (Unadj.) Rs 438.4 456.7
TTM Earnings per share Rs 45.8 44.3
Diluted earnings per share Rs 45.9 44.6
Price to Cash Flow x 20.0 20.3
TTM P/E ratio x 19.9 19.8
Price / Book Value ratio x 1.8 1.7
Market Cap Rs m 81,358 81,159
Dividends per share (Unadj.) Rs 10.0 12.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for NIIT TECHNOLOGIES

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.3x during FY17, from 2.5x during FY16. 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 63.1x during FY17, from 79.2x during FY16. 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 16.1% during FY17, from 16.9% during FY17. 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 20.9% during FY17, from 22.1% during FY16. 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 11.4% during FY17, from 12.7% during FY16. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-16* 12 Mar-17*
Current ratio x 2.5 3.3
Debtors’ Days Days 80 61
Interest coverage x 79.2 63.1
Debt to equity ratio x 0.0 0.0
Return on assets % 12.7 11.4
Return on equity % 16.9 16.1
Return on capital employed % 22.1 20.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

NIIT TECHNOLOGIES Share Price Performance

Over the last one year, NIIT TECHNOLOGIES share price has moved up from Rs 988.2 to Rs 1,329.6, registering a gain of Rs 341.5 or around 34.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,084.3 (up 1.3%). Over the last one year it has moved up from 12,411.3 to 15,084.3, a gain of 2,673 points (up 21.5%).

Overall, the S&P BSE SENSEX is up 12.3% over the year.

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

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