HCL INFOSYS 2018-19 Annual Report Analysis
Tue, 24 Sep

HCL INFOSYS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

HCL INFOSYS Income Statement Analysis

  • Operating income during the year rose 21.8% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 27.6% YoY during the fiscal. Operating profit margins witnessed a growth and down at 2.2% in FY19 as against 3.8% in FY18.
  • Depreciation charges decreased by 21.2% and finance costs decreased by 12.8% YoY, respectively.
  • Other income declined by 21.7% YoY.
  • Net profit for the year declined by 29.2% YoY.
  • Net profit margins during the year grew from 5.6% in FY18 to 3.3% in FY19.

HCL INFOSYS Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 35,646 43,400 21.8%
Other income Rs m 1,307 1,024 -21.7%
Total Revenues Rs m 36,954 44,424 20.2%
Gross profit Rs m -1,342 -971 -27.6%
Depreciation Rs m 275 216 -21.2%
Interest Rs m 1,411 1,230 -12.8%
Profit before tax Rs m -1,721 -1,395 -19.0%
Tax Rs m 51 82 61.6%
Profit after tax Rs m -2,086 -1,477 -29.2%
Gross profit margin % -3.8 -2.2
Effective tax rate % -3.0 -5.9
Net profit margin % -5.6 -3.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HCL INFOSYS Balance Sheet Analysis

  • The company's current liabilities during FY19 down at Rs 18 billion as compared to Rs 24 billion in FY18, thereby witnessing an decrease of -24.9%.
  • Long-term debt down at Rs 991 million as compared to Rs 2 billion during FY18, a fall of 41.4%.
  • Current assets fell 33% and stood at Rs 14 billion, while fixed assets fell 15% and stood at Rs 1 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 20 billion as against Rs 29 billion during FY18, thereby witnessing a fall of 31%.

HCL INFOSYS Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 2,353 1,042 -55.7
 
Current Liabilities Rs m 23,718 17,808 -24.9
Long-term Debt Rs m 1,692 991 -41.4
Total Liabilities Rs m 28,797 19,974 -30.6
 
Current assets Rs m 21,413 14,327 -33.1
Fixed Assets Rs m 1,676 1,420 -15.3
Total Assets Rs m 28,797 19,974 -30.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HCL INFOSYS Cash Flow Statement Analysis

  • HCL INFOSYS's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs 1 billion, an improvement of 39.6% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -5 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 384 million from the Rs -223 million net cash flows seen during FY18.

HCL INFOSYS Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m -3,508 3,871 -
Cash Flow from Investing Activities Rs m 921 1,286 39.6%
Cash Flow from Financing Activities Rs m 2,347 -4,771 -
Net Cash Flow Rs m -223 384 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HCL INFOSYS

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs -4.5, an improvement from the EPS of Rs -6.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 8.5, stands at -1.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 11.5 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at -1.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 108.3 131.8
TTM Earnings per share Rs -6.3 -4.5
Diluted earnings per share Rs -9.4 -6.6
Price to Cash Flow x -1.6 -1.5
TTM P/E ratio x -1.9 -1.3
Price / Book Value ratio x 7.5 11.5
Market Cap Rs m 2,811 1,904
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HCL INFOSYS

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY19, from 0.9x during FY18. 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 -0.1x during FY19, from -0.2x during FY18. 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 -141.8% during FY19, from -88.6% during FY19. 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 -8.1% during FY19, from -15.4% during FY18. 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 -1.2% during FY19, from -2.3% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 0.9 0.8
Debtors’ Days Days 132 48
Interest coverage x -0.2 -0.1
Debt to equity ratio x 0.7 1.0
Return on assets % -2.3 -1.2
Return on equity % -88.6 -141.8
Return on capital employed % -15.4 -8.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HCL INFOSYS Share Price Performance

Over the last one year, HCL INFOSYS share price has moved down from Rs 25.9 to Rs 8.5, registering a loss of Rs 17.4 or around 67.0%.

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

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