INFOSYS 2021-22 Annual Report Analysis

Mon, 16 May

INFOSYS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

INFOSYS Income Statement Analysis

• Operating income during the year rose 21.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.9% in FY22 as against 27.4% in FY21.
• Depreciation charges increased by 6.4% and finance costs increased by 2.6% YoY, respectively.
• Other income declined by 9.9% YoY.
• Net profit for the year grew by 14.0% YoY.
• Net profit margins during the year declined from 19.3% in FY21 to 18.2% in FY22.

INFOSYS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,004,720	1,216,410	21.1%
Other income	Rs m	25,470	22,950	-9.9%
Total Revenues	Rs m	1,030,190	1,239,360	20.3%
Gross profit	Rs m	275,430	314,910	14.3%
Depreciation	Rs m	32,670	34,760	6.4%
Interest	Rs m	1,950	2,000	2.6%
Profit before tax	Rs m	266,280	301,100	13.1%
Tax	Rs m	72,050	79,640	10.5%
Profit after tax	Rs m	194,230	221,460	14.0%
Gross profit margin	%	27.4	25.9
Effective tax rate	%	27.1	26.4
Net profit margin	%	19.3	18.2

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INFOSYS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 336 billion as compared to Rs 239 billion in FY21, thereby witnessing an increase of 40.8%.
• Current assets rose 11% and stood at Rs 672 billion, while fixed assets rose 6% and stood at Rs 495 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,167 billion as against Rs 1,073 billion during FY21, thereby witnessing a growth of 9%.

INFOSYS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	759,790	747,440	-1.6
Current Liabilities	Rs m	238,650	336,030	40.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	1,072,880	1,166,730	8.7
Current assets	Rs m	607,330	671,850	10.6
Fixed Assets	Rs m	465,550	494,880	6.3
Total Assets	Rs m	1,072,880	1,166,730	8.7

INFOSYS Cash Flow Statement Analysis

• INFOSYS's cash flow from operating activities (CFO) during FY22 stood at Rs 239 billion, an improvement of 2.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -64 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -246 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -72 billion from the Rs 61 billion net cash flows seen during FY21.

INFOSYS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	232,240	238,850	2.8%
Cash Flow from Investing Activities	Rs m	-74,560	-64,160	-
Cash Flow from Financing Activities	Rs m	-97,860	-246,420	-
Net Cash Flow	Rs m	60,650	-72,420	-

Current Valuations for INFOSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 52.8, an improvement from the EPS of Rs 45.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,492.3, stands at 28.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.4 times, while the price to sales ratio stands at 5.1 times.
• The company's price to cash flow (P/CF) ratio stood at 26.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	236.7	290.1
TTM Earnings per share	Rs	45.8	52.8
Diluted earnings per share	Rs	46.2	52.6
Price to Cash Flow	x	25.4	26.7
TTM P/E ratio	x	29.6	28.3
Price / Book Value ratio	x	5.6	9.2
Market Cap	Rs m	4,220,949	6,846,142
Dividends per share (Unadj.)	Rs	27.0	31.0

Ratio Analysis for INFOSYS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 2.5x during FY21. 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 151.6x during FY22, from 137.6x during FY21. 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 29.6% during FY22, from 25.6% during FY22. 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 40.6% during FY22, from 35.3% during FY21. 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 19.2% during FY22, from 18.3% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	2.5	2.0
Debtors’ Days	Days	7	7
Interest coverage	x	137.6	151.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.3	19.2
Return on equity	%	25.6	29.6
Return on capital employed	%	35.3	40.6

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

INFOSYS Share Price Performance

Over the last one year, INFOSYS share price has moved up from Rs 1,316.8 to Rs 1,492.3, registering a gain of Rs 175.5 or around 13.3%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,792.8 (down 0.6%). Over the last one year it has moved up from 26,131.6 to 29,792.8, a gain of 3,661 points (up 14.0%).

Overall, the S&P BSE SENSEX is up 8.8% over the year.

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

Read: Latest Annual Report Analysis of INFOSYS