HCL TECHNOLOGIES 2023-24 Annual Report Analysis

Mon, 29 Jul

HCL 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.

HCL TECHNOLOGIES Income Statement Analysis

• Operating income during the year rose 8.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 6.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 22.0% in FY24 as against 22.3% in FY23.
• Depreciation charges increased by 0.7% and finance costs increased by 56.7% YoY, respectively.
• Other income grew by 11.1% YoY.
• Net profit for the year grew by 5.8% YoY.
• Net profit margins during the year declined from 14.6% in FY23 to 14.3% in FY24.

HCL TECHNOLOGIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,014,560	1,099,130	8.3%
Other income	Rs m	13,620	15,130	11.1%
Total Revenues	Rs m	1,028,180	1,114,260	8.4%
Gross profit	Rs m	226,240	241,800	6.9%
Depreciation	Rs m	41,450	41,730	0.7%
Interest	Rs m	3,530	5,530	56.7%
Profit before tax	Rs m	194,880	209,670	7.6%
Tax	Rs m	46,430	52,570	13.2%
Profit after tax	Rs m	148,450	157,100	5.8%
Gross profit margin	%	22.3	22.0
Effective tax rate	%	23.8	25.1
Net profit margin	%	14.6	14.3

Dear Reader: If You Invest in Midcap Stocks, this is for You

HCL TECHNOLOGIES Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 227 billion as compared to Rs 214 billion in FY23, thereby witnessing an increase of 6.0%.
• Long-term debt stood at Rs 22 billion as compared to Rs 21 billion during FY23, a growth of 5.3%.
• Current assets rose 11% and stood at Rs 593 billion, while fixed assets rose 2% and stood at Rs 394 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 987 billion as against Rs 922 billion during FY23, thereby witnessing a growth of 7%.

HCL TECHNOLOGIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	650,170	676,240	4.0
Current Liabilities	Rs m	214,310	227,260	6.0
Long-term Debt	Rs m	21,110	22,230	5.3
Total Liabilities	Rs m	921,590	987,460	7.1
Current assets	Rs m	535,770	593,310	10.7
Fixed Assets	Rs m	385,820	394,150	2.2
Total Assets	Rs m	921,590	987,460	7.1

HCL TECHNOLOGIES Cash Flow Statement Analysis

• HCL TECHNOLOGIES's cash flow from operating activities (CFO) during FY24 stood at Rs 224 billion, an improvement of 24.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -67 billion, an improvement of 71.0% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -155 billion, an improvement of 3% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 4 billion from the Rs -14 billion net cash flows seen during FY23.

HCL 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	180,090	224,480	24.6%
Cash Flow from Investing Activities	Rs m	-39,310	-67,230	-
Cash Flow from Financing Activities	Rs m	-158,810	-154,640	-
Net Cash Flow	Rs m	-14,450	3,760	-

Current Valuations for HCL TECHNOLOGIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 57.9, an improvement from the EPS of Rs 54.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,629.2, stands at 26.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 18.5 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	373.9	405.0
TTM Earnings per share	Rs	54.7	57.9
Diluted earnings per share	Rs	54.7	57.9
Price to Cash Flow	x	15.5	18.5
TTM P/E ratio	x	19.9	26.9
Price / Book Value ratio	x	4.3	5.4
Market Cap	Rs m	2,820,380	3,681,019
Dividends per share (Unadj.)	Rs	48.0	52.0

Ratio Analysis for HCL TECHNOLOGIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY24, from 2.5x 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 38.9x during FY24, from 56.2x 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 23.2% during FY24, from 22.8% 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 improved and stood at 30.8% during FY24, from 29.6% 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 16.5% during FY24, from 16.5% 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	2.5	2.6
Debtors’ Days	Days	9	8
Interest coverage	x	56.2	38.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	16.5	16.5
Return on equity	%	22.8	23.2
Return on capital employed	%	29.6	30.8

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

HCL TECHNOLOGIES Share Price Performance

Over the last one year, HCL TECHNOLOGIES share price has moved up from Rs 1,103.3 to Rs 1,629.2, registering a gain of Rs 526.0 or around 47.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 41,950.5 (up 0.3%). Over the last one year it has moved up from 29,893.2 to 41,950.5, a gain of 12,057 points (up 40.3%).

Overall, the S&P BSE SENSEX is up 23.1% over the year.

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