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ECLERX SERVICES 2023-24 Annual Report Analysis

Mon, 2 Sep

ECLERX SERVICES 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.

ECLERX SERVICES Income Statement Analysis

• Operating income during the year rose 10.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 7.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 26.5% in FY24 as against 27.3% in FY23.
• Depreciation charges increased by 10.3% and finance costs increased by 10.2% YoY, respectively.
• Other income declined by 0.5% YoY.
• Net profit for the year grew by 4.6% YoY.
• Net profit margins during the year declined from 18.5% in FY23 to 17.5% in FY24.

ECLERX SERVICES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	26,479	29,255	10.5%
Other income	Rs m	660	656	-0.5%
Total Revenues	Rs m	27,138	29,912	10.2%
Gross profit	Rs m	7,232	7,739	7.0%
Depreciation	Rs m	1,140	1,258	10.3%
Interest	Rs m	222	244	10.2%
Profit before tax	Rs m	6,530	6,893	5.6%
Tax	Rs m	1,638	1,776	8.4%
Profit after tax	Rs m	4,892	5,117	4.6%
Gross profit margin	%	27.3	26.5
Effective tax rate	%	25.1	25.8
Net profit margin	%	18.5	17.5

For Investors: Our Big Prediction

ECLERX SERVICES Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 4 billion as compared to Rs 4 billion in FY23, thereby witnessing an increase of 7.6%.
• Current assets rose 42% and stood at Rs 19 billion, while fixed assets rose 7% and stood at Rs 9 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 29 billion as against Rs 22 billion during FY23, thereby witnessing a growth of 28%.

ECLERX SERVICES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	16,997	22,167	30.4
Current Liabilities	Rs m	3,502	3,770	7.6
Long-term Debt	Rs m	7	0	-100.0
Total Liabilities	Rs m	22,336	28,698	28.5
Current assets	Rs m	13,714	19,497	42.2
Fixed Assets	Rs m	8,622	9,201	6.7
Total Assets	Rs m	22,336	28,698	28.5

ECLERX SERVICES Cash Flow Statement Analysis

• ECLERX SERVICES's cash flow from operating activities (CFO) during FY24 stood at Rs 5 billion, an improvement of 6.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -5 billion, an improvement of 478.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -1 billion, an improvement of 76% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -641 million from the Rs -23 million net cash flows seen during FY23.

ECLERX SERVICES 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	4,926	5,259	6.8%
Cash Flow from Investing Activities	Rs m	-844	-4,879	-
Cash Flow from Financing Activities	Rs m	-4,401	-1,065	-
Net Cash Flow	Rs m	-23	-641	-

Current Valuations for ECLERX SERVICES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 106.1, an improvement from the EPS of Rs 101.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,855.6, stands at 26.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.1 times, while the price to sales ratio stands at 4.7 times.
• The company's price to cash flow (P/CF) ratio stood at 15.5 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	551.3	606.6
TTM Earnings per share	Rs	101.8	106.1
Diluted earnings per share	Rs	102.7	107.4
Price to Cash Flow	x	10.2	15.5
TTM P/E ratio	x	12.6	26.3
Price / Book Value ratio	x	4.1	4.5
Market Cap	Rs m	70,370	98,804
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for ECLERX SERVICES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.2x during FY24, from 3.9x 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 29.2x during FY24, from 30.4x 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 23.1% during FY24, from 28.8% 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 32.2% during FY24, from 39.7% 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 18.7% during FY24, from 22.9% 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	3.9	5.2
Debtors’ Days	Days	61	62
Interest coverage	x	30.4	29.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	22.9	18.7
Return on equity	%	28.8	23.1
Return on capital employed	%	39.7	32.2

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

ECLERX SERVICES Share Price Performance

Over the last one year, ECLERX SERVICES share price has moved up from Rs 1,623.8 to Rs 2,855.6, registering a gain of Rs 1,231.8 or around 75.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 43,713.4 (up 0.5%). Over the last one year it has moved up from 31,850.3 to 43,713.4, a gain of 11,863 points (up 37.2%).

Overall, the S&P BSE SENSEX is up 26.8% over the year.

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