R SYSTEM INTL 2019-20 Annual Report Analysis

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R SYSTEM INTL 2019-20 Annual Report Analysis
Mon, 8 Nov

R SYSTEM INTL has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

R SYSTEM INTL Income Statement Analysis

  • Operating income during the year rose 8.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 57.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.1% in CY20 as against 9.0% in CY19.
  • Depreciation charges increased by 72.0% and finance costs increased by 262.0% YoY, respectively.
  • Other income declined by 16.1% YoY.
  • Net profit for the year grew by 41.4% YoY.
  • Net profit margins during the year grew from 7.0% in CY19 to 9.2% in CY20.

R SYSTEM INTL Income Statement 2019-20

No. of Mths Year Ending 12 Dec-19* 12 Dec-20* % Change
Net Sales Rs m 8,094 8,806 8.8%
Other income Rs m 154 129 -16.1%
Total Revenues Rs m 8,248 8,935 8.3%
Gross profit Rs m 730 1,150 57.5%
Depreciation Rs m 149 256 72.0%
Interest Rs m 16 57 262.0%
Profit before tax Rs m 719 966 34.3%
Tax Rs m 138 144 4.4%
Profit after tax Rs m 581 822 41.4%
Gross profit margin % 9.0 13.1
Effective tax rate % 19.2 14.9
Net profit margin % 7.0 9.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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R SYSTEM INTL Balance Sheet Analysis

  • The company's current liabilities during CY20 stood at Rs 1 billion as compared to Rs 1 billion in CY19, thereby witnessing an increase of 20.8%.
  • Long-term debt stood at Rs 84 million as compared to Rs 53 million during CY19, a growth of 57.5%.
  • Current assets rose 30% and stood at Rs 5 billion, while fixed assets rose 31% and stood at Rs 1 billion in CY20.
  • Overall, the total assets and liabilities for CY20 stood at Rs 6 billion as against Rs 5 billion during CY19, thereby witnessing a growth of 31%.

R SYSTEM INTL Balance Sheet as on December 2020

No. of Mths Year Ending 12 Dec-19* 12 Dec-20* % Change
Networth Rs m 3,381 4,266 26.2
 
Current Liabilities Rs m 1,238 1,495 20.8
Long-term Debt Rs m 53 84 57.5
Total Liabilities Rs m 4,866 6,359 30.7
 
Current assets Rs m 3,897 5,085 30.5
Fixed Assets Rs m 969 1,274 31.5
Total Assets Rs m 4,866 6,359 30.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



R SYSTEM INTL Cash Flow Statement Analysis

  • R SYSTEM INTL's cash flow from operating activities (CFO) during CY20 stood at Rs 1 billion, an improvement of 93.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during CY20 stood at Rs -383 million on a YoY basis.
  • Cash flow from financial activities (CFF) during CY20 stood at Rs 110 million, an improvement of 124% on a YoY basis.
  • Overall, net cash flows for the company during CY20 stood at Rs 1 billion from the Rs 262 million net cash flows seen during CY19.

R SYSTEM INTL Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Dec-19 Dec-20
Cash Flow from Operating Activities Rs m 643 1,244 93.4%
Cash Flow from Investing Activities Rs m 61 -383 -
Cash Flow from Financing Activities Rs m -460 110 -
Net Cash Flow Rs m 262 1,029 292.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for R SYSTEM INTL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.9, an improvement from the EPS of Rs 4.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 248.0, stands at 21.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 1.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 27.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Dec-19* 12 Dec-20*
Sales per share (Unadj.) Rs 67.3 73.6
TTM Earnings per share Rs 4.8 6.9
Diluted earnings per share Rs 4.9 6.9
Price to Cash Flow x 40.9 27.5
TTM P/E ratio x 21.6 21.5
Price / Book Value ratio x 1.9 2.7
Market Cap Rs m 29,844 29,670
Dividends per share (Unadj.) Rs 1.5 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for R SYSTEM INTL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.4x during CY20, from 3.1x during CY19. 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 18.1x during CY20, from 47.0x during CY19. 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 19.3% during CY20, from 17.2% during CY20. 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 23.5% during CY20, from 21.4% during CY19. 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 13.8% during CY20, from 12.3% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Dec-19* 12 Dec-20*
Current ratio x 3.1 3.4
Debtors’ Days Days 60 54
Interest coverage x 47.0 18.1
Debt to equity ratio x 0.0 0.0
Return on assets % 12.3 13.8
Return on equity % 17.2 19.3
Return on capital employed % 21.4 23.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how R SYSTEM INTL has performed over the last 5 years, please visit here.

R SYSTEM INTL Share Price Performance

Over the last one year, R SYSTEM INTL share price has moved up from Rs 122.3 to Rs 248.0, registering a gain of Rs 125.8 or around 102.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 34,794.5 (up 1.1%). Over the last one year it has moved up from 21,707.5 to 34,794.5, a gain of 13,087 points (up 60.3%).

Overall, the S&P BSE SENSEX is up 49.1% over the year.

(To know more, check out historical annual results for R SYSTEM INTL and quarterly results for R SYSTEM INTL)

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