SIS 2021-22 Annual Report Analysis

Tue, 9 Aug

SIS 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.

SIS Income Statement Analysis

• Operating income during the year rose 10.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 102.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 4.9% in FY22 as against 2.7% in FY21.
• Depreciation charges decreased by 1.3% and finance costs decreased by 22.7% YoY, respectively.
• Other income declined by 88.4% YoY.
• Net profit for the year declined by 11.8% YoY.
• Net profit margins during the year declined from 4.0% in FY21 to 3.2% in FY22.

SIS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	91,273	100,591	10.2%
Other income	Rs m	4,778	554	-88.4%
Total Revenues	Rs m	96,051	101,145	5.3%
Gross profit	Rs m	2,445	4,958	102.8%
Depreciation	Rs m	1,130	1,116	-1.3%
Interest	Rs m	1,273	984	-22.7%
Profit before tax	Rs m	4,820	3,413	-29.2%
Tax	Rs m	1,154	179	-84.5%
Profit after tax	Rs m	3,667	3,233	-11.8%
Gross profit margin	%	2.7	4.9
Effective tax rate	%	23.9	5.3
Net profit margin	%	4.0	3.2

Emerging Opportunity: Our Research Hints at a Potential Massive Bull Run in...

SIS Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 22 billion as compared to Rs 23 billion in FY21, thereby witnessing an decrease of -1.3%.
• Long-term debt down at Rs 6 billion as compared to Rs 7 billion during FY21, a fall of 18.2%.
• Current assets fell 4% and stood at Rs 29 billion, while fixed assets rose 3% and stood at Rs 20 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 49 billion as against Rs 50 billion during FY21, thereby witnessing a fall of 1%.

SIS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	18,229	20,487	12.4
Current Liabilities	Rs m	22,706	22,419	-1.3
Long-term Debt	Rs m	7,421	6,069	-18.2
Total Liabilities	Rs m	49,808	49,318	-1.0
Current assets	Rs m	29,993	28,940	-3.5
Fixed Assets	Rs m	19,815	20,379	2.8
Total Assets	Rs m	49,808	49,318	-1.0

SIS Cash Flow Statement Analysis

• SIS's cash flow from operating activities (CFO) during FY22 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -2 billion from the Rs 6 billion net cash flows seen during FY21.

SIS 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	6,396	2,335	-63.5%
Cash Flow from Investing Activities	Rs m	-1,635	-1,224	-
Cash Flow from Financing Activities	Rs m	438	-3,511	-
Net Cash Flow	Rs m	5,570	-2,366	-

Current Valuations for SIS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.0, an decline from the EPS of Rs 24.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 444.7, stands at 18.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 0.6 times.
• The company's price to cash flow (P/CF) ratio stood at 15.4 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	615.5	684.2
TTM Earnings per share	Rs	24.7	22.0
Diluted earnings per share	Rs	24.9	22.0
Price to Cash Flow	x	12.0	15.4
TTM P/E ratio	x	15.7	18.9
Price / Book Value ratio	x	3.2	3.3
Market Cap	Rs m	58,702	66,914
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for SIS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY22, from 1.3x 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 4.5x during FY22, from 4.8x 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 15.8% during FY22, from 20.1% 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 16.6% during FY22, from 23.8% 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 8.6% during FY22, from 9.9% 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	1.3	1.3
Debtors’ Days	Days	50	50
Interest coverage	x	4.8	4.5
Debt to equity ratio	x	0.4	0.3
Return on assets	%	9.9	8.6
Return on equity	%	20.1	15.8
Return on capital employed	%	23.8	16.6

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

SIS Share Price Performance

Over the last one year, SIS share price has moved down from Rs 471.7 to Rs 444.7, registering a loss of Rs 27.1 or around 5.7%.

Overall, the S&P BSE SENSEX is up 8.0% over the year.

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

Read: Latest Annual Report Analysis of SIS