ZENSAR TECHNOLOGIES 2023-24 Annual Report Analysis

Wed, 17 Jul

ZENSAR TECHNOLOGIES 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.

ZENSAR TECHNOLOGIES Income Statement Analysis

• Operating income during the year fell 58.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.7% in FY24 as against 11.1% in FY23.
• Depreciation charges decreased by 69.7% and finance costs decreased by 46.4% YoY, respectively.
• Other income grew by 51.3% YoY.
• Net profit for the year grew by 45.6% YoY.
• Net profit margins during the year grew from 6.8% in FY23 to 23.6% in FY24.

ZENSAR TECHNOLOGIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	48,482	20,192	-58.4%
Other income	Rs m	1,183	1,790	51.3%
Total Revenues	Rs m	49,665	21,982	-55.7%
Gross profit	Rs m	5,368	5,194	-3.2%
Depreciation	Rs m	1,830	555	-69.7%
Interest	Rs m	280	150	-46.4%
Profit before tax	Rs m	4,441	6,279	41.4%
Tax	Rs m	1,165	1,509	29.5%
Profit after tax	Rs m	3,276	4,770	45.6%
Gross profit margin	%	11.1	25.7
Effective tax rate	%	26.2	24.0
Net profit margin	%	6.8	23.6

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ZENSAR TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 3 billion as compared to Rs 9 billion in FY23, thereby witnessing an decrease of -59.5%.
• Current assets fell 25% and stood at Rs 17 billion, while fixed assets fell 19% and stood at Rs 14 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 31 billion as against Rs 40 billion during FY23, thereby witnessing a fall of 22%.

ZENSAR TECHNOLOGIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	29,557	26,450	-10.5
Current Liabilities	Rs m	8,581	3,472	-59.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	40,252	31,293	-22.3
Current assets	Rs m	23,184	17,428	-24.8
Fixed Assets	Rs m	17,068	13,865	-18.8
Total Assets	Rs m	40,252	31,293	-22.3

ZENSAR TECHNOLOGIES Cash Flow Statement Analysis

• ZENSAR TECHNOLOGIES's cash flow from operating activities (CFO) during FY24 stood at Rs 5 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -2 billion, an improvement of 28% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -218 million from the Rs -310 million net cash flows seen during FY23.

ZENSAR TECHNOLOGIES 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	7,143	4,613	-35.4%
Cash Flow from Investing Activities	Rs m	-5,275	-3,255	-
Cash Flow from Financing Activities	Rs m	-2,186	-1,576	-
Net Cash Flow	Rs m	-310	-218	-

Current Valuations for ZENSAR TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.0, an improvement from the EPS of Rs 14.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 778.9, stands at 26.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.7 times, while the price to sales ratio stands at 8.7 times.
• The company's price to cash flow (P/CF) ratio stood at 19.2 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	214.1	89.1
TTM Earnings per share	Rs	14.5	21.0
Diluted earnings per share	Rs	14.5	21.0
Price to Cash Flow	x	12.2	19.2
TTM P/E ratio	x	19.0	26.5
Price / Book Value ratio	x	2.3	3.9
Market Cap	Rs m	67,543	102,393
Dividends per share (Unadj.)	Rs	5.0	9.0

Ratio Analysis for ZENSAR TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.0x during FY24, from 2.7x 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 improved and stood at 42.9x during FY24, from 16.9x 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 improved and stood at 18.0% during FY24, from 11.1% 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 improved and stood at 24.3% during FY24, from 16.0% 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 improved and stood at 15.7% during FY24, from 8.8% 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	2.7	5.0
Debtors’ Days	Days	55	141
Interest coverage	x	16.9	42.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.8	15.7
Return on equity	%	11.1	18.0
Return on capital employed	%	16.0	24.3

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

ZENSAR TECHNOLOGIES Share Price Performance

Over the last one year, ZENSAR TECHNOLOGIES share price has moved up from Rs 438.9 to Rs 778.9, registering a gain of Rs 340.0 or around 77.5%.

Meanwhile, the S&P BSE IT Index is trading at Rs 39,971.9 (up 0.6%). Over the last one year it has moved up from 31,378.2 to 39,971.9, a gain of 8,594 points (up 27.4%).

Overall, the S&P BSE SENSEX is up 21.2% over the year.

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