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PERSISTENT SYSTEMS 2021-22 Annual Report Analysis

Sat, 25 Jun

PERSISTENT SYSTEMS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

PERSISTENT SYSTEMS Income Statement Analysis

• Operating income during the year rose 36.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 38.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.6% in FY22 as against 16.3% in FY21.
• Depreciation charges decreased by 5.4% and finance costs increased by 104.3% YoY, respectively.
• Other income grew by 43.3% YoY.
• Net profit for the year grew by 53.2% YoY.
• Net profit margins during the year grew from 10.8% in FY21 to 12.1% in FY22.

PERSISTENT SYSTEMS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	41,879	57,107	36.4%
Other income	Rs m	1,078	1,545	43.3%
Total Revenues	Rs m	42,957	58,652	36.5%
Gross profit	Rs m	6,830	9,477	38.7%
Depreciation	Rs m	1,756	1,660	-5.4%
Interest	Rs m	58	118	104.3%
Profit before tax	Rs m	6,094	9,243	51.7%
Tax	Rs m	1,588	2,339	47.3%
Profit after tax	Rs m	4,507	6,904	53.2%
Gross profit margin	%	16.3	16.6
Effective tax rate	%	26.1	25.3
Net profit margin	%	10.8	12.1

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PERSISTENT SYSTEMS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 14 billion as compared to Rs 8 billion in FY21, thereby witnessing an increase of 84.6%.
• Long-term debt stood at Rs 3 billion as compared to Rs 44 million during FY21, a growth of 6226.6%.
• Current assets rose 6% and stood at Rs 28 billion, while fixed assets rose 177% and stood at Rs 25 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 53 billion as against Rs 36 billion during FY21, thereby witnessing a growth of 49%.

PERSISTENT SYSTEMS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	27,486	32,537	18.4
Current Liabilities	Rs m	7,697	14,210	84.6
Long-term Debt	Rs m	44	2,801	6,226.6
Total Liabilities	Rs m	35,618	53,018	48.9
Current assets	Rs m	26,703	28,339	6.1
Fixed Assets	Rs m	8,915	24,679	176.8
Total Assets	Rs m	35,618	53,018	48.9

PERSISTENT SYSTEMS Cash Flow Statement Analysis

• PERSISTENT SYSTEMS's cash flow from operating activities (CFO) during FY22 stood at Rs 8 billion, an improvement of 14.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -10 billion, an improvement of 80.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 2 billion, an improvement of 226% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 559 million from the Rs 519 million net cash flows seen during FY21.

PERSISTENT SYSTEMS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	7,359	8,450	14.8%
Cash Flow from Investing Activities	Rs m	-5,417	-9,773	-
Cash Flow from Financing Activities	Rs m	-1,443	1,823	-
Net Cash Flow	Rs m	519	559	7.6%

Current Valuations for PERSISTENT SYSTEMS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 90.3, an improvement from the EPS of Rs 59.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,266.3, stands at 36.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.7 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 30.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	547.9	747.2
TTM Earnings per share	Rs	59.0	90.3
Diluted earnings per share	Rs	59.0	90.3
Price to Cash Flow	x	23.4	30.5
TTM P/E ratio	x	32.5	36.2
Price / Book Value ratio	x	3.4	8.0
Market Cap	Rs m	93,627	261,576
Dividends per share (Unadj.)	Rs	20.0	31.0

Ratio Analysis for PERSISTENT SYSTEMS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 3.5x during FY21. 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 79.1x during FY22, from 106.2x during FY21. 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 21.2% during FY22, from 16.4% during FY22. 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 26.5% during FY22, from 22.3% during FY21. 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 13.2% during FY22, from 12.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	3.5	2.0
Debtors’ Days	Days	50	61
Interest coverage	x	106.2	79.1
Debt to equity ratio	x	0.0	0.1
Return on assets	%	12.8	13.2
Return on equity	%	16.4	21.2
Return on capital employed	%	22.3	26.5

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 2,621.4 to Rs 3,266.3, registering a gain of Rs 644.9 or around 24.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,147.6 (down 0.6%). Over the last one year it has moved down from 30,055.6 to 28,147.6, a loss of 1,908 points (down 6.3%).

Overall, the S&P BSE SENSEX is up 0.8% 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