MPHASIS 2023-24 Annual Report Analysis

Mon, 29 Apr

MPHASIS has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

MPHASIS Income Statement Analysis

• Operating income during the year fell 3.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 0.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.2% in FY24 as against 17.6% in FY23.
• Depreciation charges increased by 26.2% and finance costs increased by 65.4% YoY, respectively.
• Other income grew by 34.8% YoY.
• Net profit for the year declined by 5.1% YoY.
• Net profit margins during the year declined from 11.9% in FY23 to 11.7% in FY24.

MPHASIS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	137,985	132,785	-3.8%
Other income	Rs m	1,616	2,178	34.8%
Total Revenues	Rs m	139,601	134,963	-3.3%
Gross profit	Rs m	24,340	24,219	-0.5%
Depreciation	Rs m	3,252	4,105	26.2%
Interest	Rs m	973	1,609	65.4%
Profit before tax	Rs m	21,731	20,683	-4.8%
Tax	Rs m	5,351	5,135	-4.0%
Profit after tax	Rs m	16,379	15,548	-5.1%
Gross profit margin	%	17.6	18.2
Effective tax rate	%	24.6	24.8
Net profit margin	%	11.9	11.7

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MPHASIS Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 42 billion as compared to Rs 28 billion in FY23, thereby witnessing an increase of 50.3%.
• Current assets rose 11% and stood at Rs 66 billion, while fixed assets rose 33% and stood at Rs 72 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 138 billion as against Rs 114 billion during FY23, thereby witnessing a growth of 22%.

MPHASIS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	77,311	85,413	10.5
Current Liabilities	Rs m	27,978	42,046	50.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	113,672	138,446	21.8
Current assets	Rs m	59,530	66,324	11.4
Fixed Assets	Rs m	54,142	72,122	33.2
Total Assets	Rs m	113,672	138,446	21.8

MPHASIS Cash Flow Statement Analysis

• MPHASIS's cash flow from operating activities (CFO) during FY24 stood at Rs 22 billion, an improvement of 49.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -25 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 771 million, an improvement of 105% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -2 billion from the Rs 2 billion net cash flows seen during FY23.

MPHASIS Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	14,618	21,797	49.1%
Cash Flow from Investing Activities	Rs m	1,825	-24,821	-
Cash Flow from Financing Activities	Rs m	-14,402	771	-
Net Cash Flow	Rs m	2,173	-2,392	-

Current Valuations for MPHASIS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 82.3, an decline from the EPS of Rs 86.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,369.9, stands at 28.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.2 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 21.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	732.4	702.6
TTM Earnings per share	Rs	86.9	82.3
Diluted earnings per share	Rs	86.7	82.3
Price to Cash Flow	x	17.3	21.6
TTM P/E ratio	x	20.7	28.8
Price / Book Value ratio	x	6.2	5.0
Market Cap	Rs m	478,023	424,834
Dividends per share (Unadj.)	Rs	50.0	55.0

Ratio Analysis for MPHASIS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY24, from 2.1x during FY23. 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 13.9x during FY24, from 23.3x during FY23. 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 18.2% during FY24, from 21.2% during FY24. 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 26.1% during FY24, from 29.4% during FY23. 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 12.4% during FY24, from 15.3% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.1	1.6
Debtors’ Days	Days	67	67
Interest coverage	x	23.3	13.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.3	12.4
Return on equity	%	21.2	18.2
Return on capital employed	%	29.4	26.1

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

MPHASIS Share Price Performance

Over the last one year, MPHASIS share price has moved up from Rs 1,815.0 to Rs 2,369.9, registering a gain of Rs 554.9 or around 30.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 34,371.1 (down 0.1%). Over the last one year it has moved up from 27,503.5 to 34,371.1, a gain of 6,868 points (up 25.0%).

Overall, the S&P BSE SENSEX is up 23.5% over the year.

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