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XCHANGING SOLUTIONS 2022-23 Annual Report Analysis

Tue, 26 Sep

XCHANGING SOLUTIONS has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

XCHANGING SOLUTIONS Income Statement Analysis

• Operating income during the year rose 0.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 7.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 28.4% in FY23 as against 30.6% in FY22.
• Depreciation charges decreased by 33.0% and finance costs decreased by 37.5% YoY, respectively.
• Other income grew by 24.9% YoY.
• Net profit for the year declined by 14.6% YoY.
• Net profit margins during the year declined from 30.2% in FY22 to 25.7% in FY23.

XCHANGING SOLUTIONS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,743	1,744	0.1%
Other income	Rs m	86	107	24.9%
Total Revenues	Rs m	1,828	1,851	1.2%
Gross profit	Rs m	534	496	-7.0%
Depreciation	Rs m	9	6	-33.0%
Interest	Rs m	2	1	-37.5%
Profit before tax	Rs m	609	596	-2.1%
Tax	Rs m	83	147	77.1%
Profit after tax	Rs m	526	449	-14.6%
Gross profit margin	%	30.6	28.4
Effective tax rate	%	13.6	24.7
Net profit margin	%	30.2	25.7

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XCHANGING SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1 billion as compared to Rs 1 billion in FY22, thereby witnessing an increase of 4.0%.
• Current assets rose 13% and stood at Rs 6 billion, while fixed assets rose 4% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 8 billion as against Rs 7 billion during FY22, thereby witnessing a growth of 10%.

XCHANGING SOLUTIONS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	6,135	6,762	10.2
Current Liabilities	Rs m	1,077	1,120	4.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,295	8,045	10.3
Current assets	Rs m	5,327	6,003	12.7
Fixed Assets	Rs m	1,969	2,043	3.8
Total Assets	Rs m	7,295	8,045	10.3

XCHANGING SOLUTIONS Cash Flow Statement Analysis

• XCHANGING SOLUTIONS's cash flow from operating activities (CFO) during FY23 stood at Rs 420 million, an improvement of 20.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 97 million, an improvement of 22.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -5 million, an improvement of 55% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 751 million from the Rs 486 million net cash flows seen during FY22.

XCHANGING SOLUTIONS Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	350	420	20.2%
Cash Flow from Investing Activities	Rs m	79	97	22.7%
Cash Flow from Financing Activities	Rs m	-11	-5	-
Net Cash Flow	Rs m	486	751	54.5%

Current Valuations for XCHANGING SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 4.0, an decline from the EPS of Rs 4.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 91.9, stands at 48.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 5.9 times.
• The company's price to cash flow (P/CF) ratio stood at 18.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	15.6	15.7
TTM Earnings per share	Rs	4.7	4.0
Diluted earnings per share	Rs	4.7	4.0
Price to Cash Flow	x	16.9	18.0
TTM P/E ratio	x	17.2	48.8
Price / Book Value ratio	x	1.8	1.2
Market Cap	Rs m	11,221	8,214
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 5.4x during FY23, from 4.9x during FY22. 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 597.0x during FY23, from 381.4x during FY22. 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 6.6% during FY23, from 8.6% during FY23. 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 8.8% during FY23, from 9.9% during FY22. 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 5.6% during FY23, from 7.2% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	4.9	5.4
Debtors’ Days	Days	310	158
Interest coverage	x	381.4	597.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.2	5.6
Return on equity	%	8.6	6.6
Return on capital employed	%	9.9	8.8

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 up from Rs 73.5 to Rs 91.9, registering a gain of Rs 18.4 or around 25.1%.

Overall, the S&P BSE SENSEX is up 11.5% over the year.

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