ZEN TECHNOLOGIES 2020-21 Annual Report Analysis

Wed, 31 Mar

ZEN TECHNOLOGIES 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.

ZEN TECHNOLOGIES Income Statement Analysis

• Operating income during the year fell 63.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 88.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.5% in FY21 as against 42.0% in FY20.
• Depreciation charges increased by 8.4% and finance costs decreased by 67.4% YoY, respectively.
• Other income grew by 56.8% YoY.
• Net profit for the year declined by 95.3% YoY.
• Net profit margins during the year declined from 39.3% in FY20 to 5.1% in FY21.

ZEN TECHNOLOGIES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	1,493	546	-63.4%
Other income	Rs m	19	30	56.8%
Total Revenues	Rs m	1,512	577	-61.9%
Gross profit	Rs m	627	74	-88.2%
Depreciation	Rs m	46	50	8.4%
Interest	Rs m	34	11	-67.4%
Profit before tax	Rs m	567	44	-92.3%
Tax	Rs m	-19	16	-183.1%
Profit after tax	Rs m	586	28	-95.3%
Gross profit margin	%	42.0	13.5
Effective tax rate	%	-3.4	36.4
Net profit margin	%	39.3	5.1

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ZEN TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 97 million as compared to Rs 133 million in FY20, thereby witnessing an decrease of -26.9%.
• Long-term debt down at Rs 12 million as compared to Rs 14 million during FY20, a fall of 12.8%.
• Current assets rose 11% and stood at Rs 1 billion, while fixed assets fell 5% and stood at Rs 730 million in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 2 billion as against Rs 2 billion during FY20, thereby witnessing a growth of 5%.

ZEN TECHNOLOGIES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	1,867	2,044	9.5
Current Liabilities	Rs m	133	97	-26.9
Long-term Debt	Rs m	14	12	-12.8
Total Liabilities	Rs m	1,937	2,028	4.7
Current assets	Rs m	1,165	1,297	11.4
Fixed Assets	Rs m	772	730	-5.5
Total Assets	Rs m	1,937	2,028	4.7

ZEN TECHNOLOGIES Cash Flow Statement Analysis

• ZEN TECHNOLOGIES's cash flow from operating activities (CFO) during FY21 stood at Rs 136 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -180 million, an improvement of 52.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 95 million, an improvement of 176% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 51 million from the Rs 382 million net cash flows seen during FY20.

ZEN TECHNOLOGIES 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	624	136	-78.2%
Cash Flow from Investing Activities	Rs m	-118	-180	-
Cash Flow from Financing Activities	Rs m	-124	95	-
Net Cash Flow	Rs m	382	51	-86.6%

Current Valuations for ZEN TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.3, an decline from the EPS of Rs 7.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 77.8, stands at 224.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 11.3 times.
• The company's price to cash flow (P/CF) ratio stood at 65.2 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	19.3	6.9
TTM Earnings per share	Rs	7.6	0.3
Diluted earnings per share	Rs	7.4	0.3
Price to Cash Flow	x	2.9	65.2
TTM P/E ratio	x	3.1	224.0
Price / Book Value ratio	x	2.1	2.5
Market Cap	Rs m	3,993	5,039
Dividends per share (Unadj.)	Rs	0.4	0.1

Ratio Analysis for ZEN TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 13.4x during FY21, from 8.8x 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 deteriorated and stood at 5.0x during FY21, from 17.9x 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 1.4% during FY21, from 31.4% 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 2.7% during FY21, from 31.9% 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 declined and down at 1.9% during FY21, from 32.0% 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	8.8	13.4
Debtors’ Days	Days	1,137	1,243
Interest coverage	x	17.9	5.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	32.0	1.9
Return on equity	%	31.4	1.4
Return on capital employed	%	31.9	2.7

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

ZEN TECHNOLOGIES Share Price Performance

Over the last one year, ZEN TECHNOLOGIES share price has moved up from Rs 22.8 to Rs 77.8, registering a gain of Rs 55.1 or around 242.0%.

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 ZEN TECHNOLOGIES and quarterly results for ZEN TECHNOLOGIES)

Read: Latest Annual Report Analysis of ZEN TECHNOLOGIES