CYIENT 2018-19 Annual Report Analysis

Sun, 31 Mar

CYIENT has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

CYIENT Income Statement Analysis

• Operating income during the year rose 18.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.2% in FY19 as against 13.6% in FY18.
• Depreciation charges increased by 5.9% and finance costs increased by 59.8% YoY, respectively.
• Other income grew by 0.7% YoY.
• Net profit for the year grew by 13.8% YoY.
• Net profit margins during the year declined from 10.7% in FY18 to 10.3% in FY19.

CYIENT Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	39,103	46,175	18.1%
Other income	Rs m	1,519	1,529	0.7%
Total Revenues	Rs m	40,622	47,704	17.4%
Gross profit	Rs m	5,304	6,104	15.1%
Depreciation	Rs m	1,052	1,114	5.9%
Interest	Rs m	204	326	59.8%
Profit before tax	Rs m	5,567	6,193	11.2%
Tax	Rs m	1,380	1,427	3.4%
Profit after tax	Rs m	4,187	4,766	13.8%
Gross profit margin	%	13.6	13.2
Effective tax rate	%	24.8	23.0
Net profit margin	%	10.7	10.3

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CYIENT Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 13 billion as compared to Rs 11 billion in FY18, thereby witnessing an increase of 17.7%.
• Long-term debt stood at Rs 1 billion as compared to Rs 630 million during FY18, a growth of 77.1%.
• Current assets rose 12% and stood at Rs 29 billion, while fixed assets rose 18% and stood at Rs 18 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 47 billion as against Rs 42 billion during FY18, thereby witnessing a growth of 14%.

CYIENT Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	23,218	25,570	10.1
Current Liabilities	Rs m	11,463	13,494	17.7
Long-term Debt	Rs m	630	1,116	77.1
Total Liabilities	Rs m	41,633	47,484	14.1
Current assets	Rs m	26,298	29,449	12.0
Fixed Assets	Rs m	15,335	18,035	17.6
Total Assets	Rs m	41,633	47,484	14.1

CYIENT Cash Flow Statement Analysis

• CYIENT's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion, an improvement of 24.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion, an improvement of 152.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -521 million from the Rs 1 billion net cash flows seen during FY18.

CYIENT Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	2,963	3,701	24.9%
Cash Flow from Investing Activities	Rs m	-869	-2,197	-
Cash Flow from Financing Activities	Rs m	-1,359	-2,321	-
Net Cash Flow	Rs m	1,033	-521	-

Current Valuations for CYIENT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.1, an improvement from the EPS of Rs 37.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 648.0, stands at 15.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 13.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	347.3	418.0
TTM Earnings per share	Rs	37.2	43.1
Diluted earnings per share	Rs	38.0	43.2
Price to Cash Flow	x	14.5	13.7
TTM P/E ratio	x	18.0	15.0
Price / Book Value ratio	x	2.8	3.1
Market Cap	Rs m	65,137	80,541
Dividends per share (Unadj.)	Rs	13.0	15.0

Ratio Analysis for CYIENT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.2x during FY19, from 2.3x during FY18. 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 20.0x during FY19, from 28.3x during FY18. 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 18.6% during FY19, from 18.0% during FY19. 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 24.4% during FY19, from 24.2% during FY18. 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 10.7% during FY19, from 10.5% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.3	2.2
Debtors’ Days	Days	65	64
Interest coverage	x	28.3	20.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.5	10.7
Return on equity	%	18.0	18.6
Return on capital employed	%	24.2	24.4

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

CYIENT Share Price Performance

Over the last one year, CYIENT share price has moved down from Rs 688.8 to Rs 648.0, registering a loss of Rs 40.9 or around 5.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,280.3 (up 0.4%). Over the last one year it has moved up from 12,100.6 to 15,280.3, a gain of 3,180 points (up 26.3%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of CYIENT