MINDTREE 2021-22 Annual Report Analysis

Mon, 16 May

MINDTREE 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.

MINDTREE Income Statement Analysis

• Operating income during the year rose 32.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 32.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.9% in FY22 as against 20.8% in FY21.
• Depreciation charges decreased by 6.8% and finance costs decreased by 0.4% YoY, respectively.
• Other income grew by 102.6% YoY.
• Net profit for the year grew by 48.8% YoY.
• Net profit margins during the year grew from 13.9% in FY21 to 15.7% in FY22.

MINDTREE Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	79,678	105,253	32.1%
Other income	Rs m	1,517	3,073	102.6%
Total Revenues	Rs m	81,195	108,326	33.4%
Gross profit	Rs m	16,567	21,956	32.5%
Depreciation	Rs m	2,596	2,420	-6.8%
Interest	Rs m	504	502	-0.4%
Profit before tax	Rs m	14,984	22,107	47.5%
Tax	Rs m	3,879	5,578	43.8%
Profit after tax	Rs m	11,105	16,529	48.8%
Gross profit margin	%	20.8	20.9
Effective tax rate	%	25.9	25.2
Net profit margin	%	13.9	15.7

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MINDTREE Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 22 billion as compared to Rs 16 billion in FY21, thereby witnessing an increase of 38.2%.
• Current assets rose 33% and stood at Rs 61 billion, while fixed assets rose 19% and stood at Rs 21 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 82 billion as against Rs 63 billion during FY21, thereby witnessing a growth of 29%.

MINDTREE Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	43,092	54,319	26.1
Current Liabilities	Rs m	15,926	22,008	38.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	63,263	81,573	28.9
Current assets	Rs m	45,754	60,740	32.8
Fixed Assets	Rs m	17,509	20,833	19.0
Total Assets	Rs m	63,263	81,573	28.9

MINDTREE Cash Flow Statement Analysis

• MINDTREE's cash flow from operating activities (CFO) during FY22 stood at Rs 15 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -7 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -6 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 3 billion from the Rs 4 billion net cash flows seen during FY21.

MINDTREE 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	19,960	15,370	-23.0%
Cash Flow from Investing Activities	Rs m	-11,833	-6,860	-
Cash Flow from Financing Activities	Rs m	-4,225	-5,957	-
Net Cash Flow	Rs m	3,688	2,916	-20.9%

Current Valuations for MINDTREE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 100.3, an improvement from the EPS of Rs 67.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,941.0, stands at 29.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.9 times, while the price to sales ratio stands at 4.6 times.
• The company's price to cash flow (P/CF) ratio stood at 30.6 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	483.7	638.6
TTM Earnings per share	Rs	67.4	100.3
Diluted earnings per share	Rs	67.4	100.3
Price to Cash Flow	x	25.1	30.6
TTM P/E ratio	x	30.9	29.3
Price / Book Value ratio	x	5.4	10.7
Market Cap	Rs m	234,808	580,042
Dividends per share (Unadj.)	Rs	25.0	37.0

Ratio Analysis for MINDTREE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.8x during FY22, from 2.9x 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 45.0x during FY22, from 30.7x 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 30.4% during FY22, from 25.8% 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 41.6% during FY22, from 35.9% 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 20.9% during FY22, from 18.4% 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	2.9	2.8
Debtors’ Days	Days	58	60
Interest coverage	x	30.7	45.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.4	20.9
Return on equity	%	25.8	30.4
Return on capital employed	%	35.9	41.6

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

MINDTREE Share Price Performance

Over the last one year, MINDTREE share price has moved up from Rs 2,106.8 to Rs 2,941.0, registering a gain of Rs 834.2 or around 39.6%.

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 MINDTREE and quarterly results for MINDTREE)