EXPLEO SOLUTIONS 2022-23 Annual Report Analysis

Fri, 21 Jul

EXPLEO 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.

EXPLEO SOLUTIONS Income Statement Analysis

• Operating income during the year rose 21.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 61.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.2% in FY23 as against 16.7% in FY22.
• Depreciation charges increased by 48.6% and finance costs increased by 86.1% YoY, respectively.
• Other income grew by 166.9% YoY.
• Net profit for the year grew by 97.8% YoY.
• Net profit margins during the year grew from 9.1% in FY22 to 14.8% in FY23.

EXPLEO SOLUTIONS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	7,425	9,033	21.7%
Other income	Rs m	60	161	166.9%
Total Revenues	Rs m	7,486	9,194	22.8%
Gross profit	Rs m	1,240	2,001	61.3%
Depreciation	Rs m	188	279	48.6%
Interest	Rs m	12	23	86.1%
Profit before tax	Rs m	1,101	1,861	69.0%
Tax	Rs m	424	522	23.1%
Profit after tax	Rs m	677	1,339	97.8%
Gross profit margin	%	16.7	22.2
Effective tax rate	%	38.5	28.1
Net profit margin	%	9.1	14.8

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EXPLEO SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an decrease of -3.9%.
• Long-term debt down at Rs 4 million as compared to Rs 5 million during FY22, a fall of 14.0%.
• Current assets rose 23% and stood at Rs 6 billion, while fixed assets rose 25% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 7 billion as against Rs 6 billion during FY22, thereby witnessing a growth of 24%.

EXPLEO SOLUTIONS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	3,944	5,301	34.4
Current Liabilities	Rs m	1,746	1,677	-3.9
Long-term Debt	Rs m	5	4	-14.0
Total Liabilities	Rs m	5,902	7,302	23.7
Current assets	Rs m	4,485	5,528	23.2
Fixed Assets	Rs m	1,417	1,774	25.3
Total Assets	Rs m	5,902	7,302	23.7

EXPLEO SOLUTIONS Cash Flow Statement Analysis

• EXPLEO SOLUTIONS's cash flow from operating activities (CFO) during FY23 stood at Rs 231 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -360 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -66 million, an improvement of 37% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -205 million from the Rs 172 million net cash flows seen during FY22.

EXPLEO 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	242	231	-4.8%
Cash Flow from Investing Activities	Rs m	42	-360	-
Cash Flow from Financing Activities	Rs m	-104	-66	-
Net Cash Flow	Rs m	172	-205	-

Current Valuations for EXPLEO SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 86.3, an improvement from the EPS of Rs 43.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,592.7, stands at 26.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 2.7 times.
• The company's price to cash flow (P/CF) ratio stood at 13.8 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	478.4	582.0
TTM Earnings per share	Rs	43.6	86.3
Diluted earnings per share	Rs	43.6	86.3
Price to Cash Flow	x	30.2	13.8
TTM P/E ratio	x	45.9	26.6
Price / Book Value ratio	x	4.7	4.2
Market Cap	Rs m	18,538	22,272
Dividends per share (Unadj.)	Rs	0.0	5.0

Ratio Analysis for EXPLEO SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.3x during FY23, from 2.6x 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 deteriorated and stood at 83.5x during FY23, from 91.8x 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 improved and stood at 25.3% during FY23, from 17.2% 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 improved and stood at 35.5% during FY23, from 28.2% 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 improved and stood at 18.6% during FY23, from 11.7% 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	2.6	3.3
Debtors’ Days	Days	85	97
Interest coverage	x	91.8	83.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.7	18.6
Return on equity	%	17.2	25.3
Return on capital employed	%	28.2	35.5

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 1,367.0 to Rs 1,592.7, registering a gain of Rs 225.7 or around 16.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 30,099.2 (down 4.4%). Over the last one year it has moved up from 28,929.0 to 30,099.2, a gain of 1,170 points (up 4.0%).

Overall, the S&P BSE SENSEX is up 20.4% over the year.

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