R SYSTEM INTL 2021-22 Annual Report Analysis

Sat, 31 Dec

R SYSTEM INTL has announced its results for the year ended December 2022. Let us have a look at the detailed performance review of the company during FY21-22.

R SYSTEM INTL Income Statement Analysis

• Operating income during the year rose 31.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 24.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.2% in CY22 as against 13.9% in CY21.
• Depreciation charges increased by 26.3% and finance costs decreased by 0.3% YoY, respectively.
• Other income declined by 75.4% YoY.
• Net profit for the year declined by 1.2% YoY.
• Net profit margins during the year declined from 12.2% in CY21 to 9.2% in CY22.

R SYSTEM INTL Income Statement 2021-22

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*	% Change
Net Sales	Rs m	11,556	15,158	31.2%
Other income	Rs m	419	103	-75.4%
Total Revenues	Rs m	11,975	15,261	27.4%
Gross profit	Rs m	1,608	1,997	24.2%
Depreciation	Rs m	277	350	26.3%
Interest	Rs m	49	49	-0.3%
Profit before tax	Rs m	1,701	1,702	0.0%
Tax	Rs m	286	305	6.4%
Profit after tax	Rs m	1,414	1,397	-1.2%
Gross profit margin	%	13.9	13.2
Effective tax rate	%	16.8	17.9
Net profit margin	%	12.2	9.2

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R SYSTEM INTL Balance Sheet Analysis

• The company's current liabilities during CY22 stood at Rs 2 billion as compared to Rs 2 billion in CY21, thereby witnessing an increase of 21.0%.
• Long-term debt stood at Rs 13 million as compared to Rs 6 million during CY21, a growth of 104.8%.
• Current assets rose 18% and stood at Rs 6 billion, while fixed assets rose 30% and stood at Rs 2 billion in CY22.
• Overall, the total assets and liabilities for CY22 stood at Rs 8 billion as against Rs 7 billion during CY21, thereby witnessing a growth of 20%.

R SYSTEM INTL Balance Sheet as on December 2022

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*	% Change
Networth	Rs m	4,603	5,455	18.5
Current Liabilities	Rs m	1,636	1,980	21.0
Long-term Debt	Rs m	6	13	104.8
Total Liabilities	Rs m	6,749	8,111	20.2
Current assets	Rs m	5,358	6,301	17.6
Fixed Assets	Rs m	1,392	1,809	30.0
Total Assets	Rs m	6,749	8,111	20.2

R SYSTEM INTL Cash Flow Statement Analysis

• R SYSTEM INTL's cash flow from operating activities (CFO) during CY22 stood at Rs 964 million, an improvement of 10.4% on a YoY basis.
• Cash flow from investing activities (CFI) during CY22 stood at Rs -214 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY22 stood at Rs -864 million, an improvement of 25% on a YoY basis.
• Overall, net cash flows for the company during CY22 stood at Rs 19 million from the Rs -92 million net cash flows seen during CY21.

R SYSTEM INTL Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-21	Dec-22
Cash Flow from Operating Activities	Rs m	873	964	10.4%
Cash Flow from Investing Activities	Rs m	212	-214	-
Cash Flow from Financing Activities	Rs m	-1,159	-864	-
Net Cash Flow	Rs m	-92	19	-

Current Valuations for R SYSTEM INTL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.8, an decline from the EPS of Rs 12.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 253.8, stands at 21.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 18.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*
Sales per share (Unadj.)	Rs	97.7	128.1
TTM Earnings per share	Rs	12.0	11.8
Diluted earnings per share	Rs	12.0	11.8
Price to Cash Flow	x	22.7	18.3
TTM P/E ratio	x	27.1	21.5
Price / Book Value ratio	x	5.9	5.9
Market Cap	Rs m	27,281	31,915
Dividends per share (Unadj.)	Rs	5.7	6.5

Ratio Analysis for R SYSTEM INTL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.2x during CY22, from 3.3x during CY21. 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 35.7x during CY22, from 35.6x during CY21. 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 25.6% during CY22, from 30.7% during CY22. 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 32.0% during CY22, from 38.0% during CY21. 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 17.8% during CY22, from 21.7% during CY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-21*	12 Dec-22*
Current ratio	x	3.3	3.2
Debtors’ Days	Days	56	62
Interest coverage	x	35.6	35.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	21.7	17.8
Return on equity	%	30.7	25.6
Return on capital employed	%	38.0	32.0

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 113.9 to Rs 253.3, registering a gain of Rs 139.4 or around 122.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 36,402.7 (down 0.3%). Over the last one year it has moved up from 26,543.2 to 36,402.7, a gain of 9,860 points (up 37.1%).

Overall, the S&P BSE SENSEX is up 16.8% over the year.

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