EXPLEO SOLUTIONS 2020-21 Annual Report Analysis

Wed, 31 Mar

EXPLEO SOLUTIONS has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

EXPLEO SOLUTIONS Income Statement Analysis

• Operating income during the year rose 11.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 31.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.2% in FY21 as against 19.7% in FY20.
• Depreciation charges decreased by 0.3% and finance costs decreased by 4.7% YoY, respectively.
• Other income declined by 30.2% YoY.
• Net profit for the year grew by 26.4% YoY.
• Net profit margins during the year grew from 14.8% in FY20 to 16.8% in FY21.

EXPLEO SOLUTIONS Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	2,702	3,009	11.4%
Other income	Rs m	78	54	-30.2%
Total Revenues	Rs m	2,780	3,063	10.2%
Gross profit	Rs m	532	698	31.2%
Depreciation	Rs m	58	58	-0.3%
Interest	Rs m	11	11	-4.7%
Profit before tax	Rs m	541	684	26.5%
Tax	Rs m	142	180	26.9%
Profit after tax	Rs m	399	504	26.4%
Gross profit margin	%	19.7	23.2
Effective tax rate	%	26.2	26.3
Net profit margin	%	14.8	16.8

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EXPLEO SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 549 million as compared to Rs 534 million in FY20, thereby witnessing an increase of 2.8%.
• Current assets rose 27% and stood at Rs 2 billion, while fixed assets rose 5% and stood at Rs 368 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 3 billion as against Rs 2 billion during FY20, thereby witnessing a growth of 24%.

EXPLEO SOLUTIONS Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,521	2,017	32.7
Current Liabilities	Rs m	534	549	2.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	2,126	2,627	23.6
Current assets	Rs m	1,774	2,259	27.3
Fixed Assets	Rs m	351	368	4.6
Total Assets	Rs m	2,126	2,627	23.6

EXPLEO SOLUTIONS Cash Flow Statement Analysis

• EXPLEO SOLUTIONS's cash flow from operating activities (CFO) during FY21 stood at Rs 664 million, an improvement of 297.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -429 million, an improvement of 417.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -28 million, an improvement of 90% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 193 million from the Rs -189 million net cash flows seen during FY20.

EXPLEO SOLUTIONS Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	167	664	297.6%
Cash Flow from Investing Activities	Rs m	-83	-429	-
Cash Flow from Financing Activities	Rs m	-289	-28	-
Net Cash Flow	Rs m	-189	193	-

Current Valuations for EXPLEO SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 49.2, an improvement from the EPS of Rs 38.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 516.6, stands at 10.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 7.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	263.6	293.6
TTM Earnings per share	Rs	38.9	49.2
Diluted earnings per share	Rs	38.9	49.2
Price to Cash Flow	x	3.3	7.2
TTM P/E ratio	x	3.7	10.5
Price / Book Value ratio	x	2.1	2.0
Market Cap	Rs m	3,240	4,024
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for EXPLEO SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.1x during FY21, from 3.3x during FY20. 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 65.8x during FY21, from 49.8x during FY20. 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 25.0% during FY21, from 26.2% during FY21. 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 34.4% during FY21, from 36.3% during FY20. 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 19.6% during FY21, from 19.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	3.3	4.1
Debtors’ Days	Days	103	74
Interest coverage	x	49.8	65.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	19.3	19.6
Return on equity	%	26.2	25.0
Return on capital employed	%	36.3	34.4

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

EXPLEO SOLUTIONS Share Price Performance

Over the last one year, EXPLEO SOLUTIONS share price has moved up from Rs 145.9 to Rs 516.6, registering a gain of Rs 370.7 or around 254.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of EXPLEO SOLUTIONS