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XCHANGING SOLUTIONS 2021-22 Annual Report Analysis

Sun, 17 Jul

XCHANGING SOLUTIONS 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.

XCHANGING SOLUTIONS Income Statement Analysis

• Operating income during the year fell 11.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 30.6% in FY22 as against 28.3% in FY21.
• Depreciation charges decreased by 34.1% and finance costs decreased by 38.5% YoY, respectively.
• Other income declined by 46.2% YoY.
• Net profit for the year declined by 15.8% YoY.
• Net profit margins during the year declined from 31.9% in FY21 to 30.2% in FY22.

XCHANGING SOLUTIONS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,957	1,743	-11.0%
Other income	Rs m	159	86	-46.2%
Total Revenues	Rs m	2,117	1,828	-13.6%
Gross profit	Rs m	554	534	-3.6%
Depreciation	Rs m	14	9	-34.1%
Interest	Rs m	3	2	-38.5%
Profit before tax	Rs m	697	609	-12.6%
Tax	Rs m	72	83	14.8%
Profit after tax	Rs m	624	526	-15.8%
Gross profit margin	%	28.3	30.6
Effective tax rate	%	10.4	13.6
Net profit margin	%	31.9	30.2

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XCHANGING SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 1 billion as compared to Rs 1 billion in FY21, thereby witnessing an decrease of -2.4%.
• Current assets rose 14% and stood at Rs 5 billion, while fixed assets fell 5% and stood at Rs 2 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 7 billion as against Rs 7 billion during FY21, thereby witnessing a growth of 9%.

XCHANGING SOLUTIONS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,557	6,135	10.4
Current Liabilities	Rs m	1,153	1,126	-2.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	6,723	7,295	8.5
Current assets	Rs m	4,727	5,406	14.4
Fixed Assets	Rs m	1,996	1,889	-5.4
Total Assets	Rs m	6,723	7,295	8.5

XCHANGING SOLUTIONS Cash Flow Statement Analysis

• XCHANGING SOLUTIONS's cash flow from operating activities (CFO) during FY22 stood at Rs 350 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs 79 million, an improvement of 2.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -11 million, an improvement of 41% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 486 million from the Rs 653 million net cash flows seen during FY21.

XCHANGING SOLUTIONS 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	620	350	-43.6%
Cash Flow from Investing Activities	Rs m	77	79	2.1%
Cash Flow from Financing Activities	Rs m	-18	-11	-
Net Cash Flow	Rs m	653	486	-25.5%

Current Valuations for XCHANGING SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.7, an decline from the EPS of Rs 5.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 69.1, stands at 14.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 21.0 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	17.6	15.6
TTM Earnings per share	Rs	5.6	4.7
Diluted earnings per share	Rs	5.6	4.7
Price to Cash Flow	x	11.3	21.0
TTM P/E ratio	x	11.5	14.6
Price / Book Value ratio	x	1.3	1.8
Market Cap	Rs m	7,208	11,221
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for XCHANGING SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.8x during FY22, from 4.1x 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 improved and stood at 381.4x during FY22, from 269.0x 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 declined and down at 8.6% during FY22, from 11.2% 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 declined and down at 9.9% during FY22, from 12.6% 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 declined and down at 7.2% during FY22, from 9.3% 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	4.1	4.8
Debtors’ Days	Days	174	310
Interest coverage	x	269.0	381.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.3	7.2
Return on equity	%	11.2	8.6
Return on capital employed	%	12.6	9.9

To see how XCHANGING SOLUTIONS has performed over the last 5 years, please visit here.

XCHANGING SOLUTIONS Share Price Performance

Over the last one year, XCHANGING SOLUTIONS share price has moved down from Rs 96.4 to Rs 69.1, registering a loss of Rs 27.3 or around 28.3%.

Overall, the S&P BSE SENSEX is up 1.6% over the year.

(To know more, check out historical annual results for XCHANGING SOLUTIONS and quarterly results for XCHANGING SOLUTIONS)

Read: Latest Annual Report Analysis of XCHANGING SOLUTIONS