PERSISTENT SYSTEMS 2020-21 Annual Report Analysis

Wed, 31 Mar

PERSISTENT SYSTEMS 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.

PERSISTENT SYSTEMS Income Statement Analysis

• Operating income during the year rose 17.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 36.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.0% in FY21 as against 13.8% in FY20.
• Depreciation charges increased by 5.8% and finance costs decreased by 8.5% YoY, respectively.
• Other income declined by 8.7% YoY.
• Net profit for the year grew by 32.4% YoY.
• Net profit margins during the year grew from 9.5% in FY20 to 10.8% in FY21.

PERSISTENT SYSTEMS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	35,658	41,879	17.4%
Other income	Rs m	1,324	1,209	-8.7%
Total Revenues	Rs m	36,982	43,088	16.5%
Gross profit	Rs m	4,923	6,699	36.1%
Depreciation	Rs m	1,660	1,756	5.8%
Interest	Rs m	63	58	-8.5%
Profit before tax	Rs m	4,523	6,094	34.7%
Tax	Rs m	1,121	1,588	41.7%
Profit after tax	Rs m	3,403	4,507	32.4%
Gross profit margin	%	13.8	16.0
Effective tax rate	%	24.8	26.1
Net profit margin	%	9.5	10.8

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PERSISTENT SYSTEMS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 8 billion as compared to Rs 6 billion in FY20, thereby witnessing an increase of 18.8%.
• Long-term debt down at Rs 44 million as compared to Rs 46 million during FY20, a fall of 4.2%.
• Current assets rose 34% and stood at Rs 27 billion, while fixed assets fell 12% and stood at Rs 9 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 36 billion as against Rs 30 billion during FY20, thereby witnessing a growth of 19%.

PERSISTENT SYSTEMS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	23,567	27,486	16.6
Current Liabilities	Rs m	6,482	7,697	18.8
Long-term Debt	Rs m	46	44	-4.2
Total Liabilities	Rs m	29,962	35,618	18.9
Current assets	Rs m	19,856	26,703	34.5
Fixed Assets	Rs m	10,106	8,915	-11.8
Total Assets	Rs m	29,962	35,618	18.9

PERSISTENT SYSTEMS Cash Flow Statement Analysis

• PERSISTENT SYSTEMS's cash flow from operating activities (CFO) during FY21 stood at Rs 7 billion, an improvement of 109.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -5 billion, an improvement of 3,549.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -1 billion, an improvement of 56% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 519 million from the Rs 161 million net cash flows seen during FY20.

PERSISTENT SYSTEMS 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	3,516	7,359	109.3%
Cash Flow from Investing Activities	Rs m	-148	-5,417	-
Cash Flow from Financing Activities	Rs m	-3,291	-1,443	-
Net Cash Flow	Rs m	161	519	223.5%

Current Valuations for PERSISTENT SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 59.0, an improvement from the EPS of Rs 44.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,918.8, stands at 32.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.3 times, while the price to sales ratio stands at 3.5 times.
• The company's price to cash flow (P/CF) ratio stood at 15.0 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	466.5	547.9
TTM Earnings per share	Rs	44.5	59.0
Diluted earnings per share	Rs	44.5	59.0
Price to Cash Flow	x	8.3	15.0
TTM P/E ratio	x	12.4	32.5
Price / Book Value ratio	x	1.9	3.4
Market Cap	Rs m	44,326	93,627
Dividends per share (Unadj.)	Rs	12.0	20.0

Ratio Analysis for PERSISTENT SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.5x during FY21, from 3.1x 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 improved and stood at 106.2x during FY21, from 72.4x 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 improved and stood at 16.4% during FY21, from 14.4% 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 improved and stood at 22.3% during FY21, from 19.4% 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 improved and stood at 12.8% during FY21, from 11.6% 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	3.1	3.5
Debtors’ Days	Days	61	50
Interest coverage	x	72.4	106.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.6	12.8
Return on equity	%	14.4	16.4
Return on capital employed	%	19.4	22.3

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

PERSISTENT SYSTEMS Share Price Performance

Over the last one year, PERSISTENT SYSTEMS share price has moved up from Rs 551.0 to Rs 1,918.8, registering a gain of Rs 1,367.8 or around 248.2%.

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 PERSISTENT SYSTEMS and quarterly results for PERSISTENT SYSTEMS)

Read: Latest Annual Report Analysis of PERSISTENT SYSTEMS