COFORGE 2023-24 Annual Report Analysis

Mon, 5 Aug

COFORGE 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.

COFORGE Income Statement Analysis

• Operating income during the year rose 14.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.6% in FY24 as against 15.3% in FY23.
• Depreciation charges increased by 23.2% and finance costs increased by 55.8% YoY, respectively.
• Other income declined by 0.8% YoY.
• Net profit for the year grew by 12.1% YoY.
• Net profit margins during the year declined from 9.3% in FY23 to 9.1% in FY24.

COFORGE Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	80,146	91,790	14.5%
Other income	Rs m	619	614	-0.8%
Total Revenues	Rs m	80,765	92,404	14.4%
Gross profit	Rs m	12,284	14,276	16.2%
Depreciation	Rs m	2,585	3,185	23.2%
Interest	Rs m	806	1,256	55.8%
Profit before tax	Rs m	9,512	10,449	9.9%
Tax	Rs m	2,061	2,093	1.6%
Profit after tax	Rs m	7,451	8,356	12.1%
Gross profit margin	%	15.3	15.6
Effective tax rate	%	21.7	20.0
Net profit margin	%	9.3	9.1

Must See: These Segments are Witnessing Incredible Growth with Modi's Push

COFORGE Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 15 billion as compared to Rs 17 billion in FY23, thereby witnessing an decrease of -11.9%.
• Long-term debt stood at Rs 3 billion as compared to Rs 3 billion during FY23, a growth of 0.5%.
• Current assets fell 0% and stood at Rs 26 billion, while fixed assets rose 14% and stood at Rs 47 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 73 billion as against Rs 67 billion during FY23, thereby witnessing a growth of 9%.

COFORGE Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	29,941	35,846	19.7
Current Liabilities	Rs m	17,393	15,315	-11.9
Long-term Debt	Rs m	3,382	3,399	0.5
Total Liabilities	Rs m	67,189	72,968	8.6
Current assets	Rs m	26,064	26,025	-0.1
Fixed Assets	Rs m	41,125	46,943	14.1
Total Assets	Rs m	67,189	72,968	8.6

COFORGE Cash Flow Statement Analysis

• COFORGE's cash flow from operating activities (CFO) during FY24 stood at Rs 9 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -2 billion from the Rs 1 billion net cash flows seen during FY23.

COFORGE 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	9,505	9,034	-5.0%
Cash Flow from Investing Activities	Rs m	-2,716	-2,478	-
Cash Flow from Financing Activities	Rs m	-5,582	-8,870	-
Net Cash Flow	Rs m	1,231	-2,486	-

Current Valuations for COFORGE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 135.2, an improvement from the EPS of Rs 122.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5,878.5, stands at 49.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.9 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 28.4 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	1,311.9	1,484.8
TTM Earnings per share	Rs	122.0	135.2
Diluted earnings per share	Rs	111.7	125.3
Price to Cash Flow	x	25.4	28.4
TTM P/E ratio	x	34.2	49.1
Price / Book Value ratio	x	8.0	9.1
Market Cap	Rs m	238,681	327,461
Dividends per share (Unadj.)	Rs	64.0	76.0

Ratio Analysis for COFORGE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY24, from 1.5x 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 9.3x during FY24, from 12.8x 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 declined and down at 23.3% during FY24, from 24.9% 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 declined and down at 29.8% during FY24, from 31.0% 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 13.2% during FY24, from 12.3% 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	1.5	1.7
Debtors’ Days	Days	73	72
Interest coverage	x	12.8	9.3
Debt to equity ratio	x	0.1	0.1
Return on assets	%	12.3	13.2
Return on equity	%	24.9	23.3
Return on capital employed	%	31.0	29.8

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

COFORGE Share Price Performance

Over the last one year, COFORGE share price has moved up from Rs 4,887.3 to Rs 5,878.5, registering a gain of Rs 991.2 or around 20.3%.

Meanwhile, the S&P BSE IT Index is trading at Rs 39,217.2 (down 3.5%). Over the last one year it has moved up from 30,781.2 to 39,217.2, a gain of 8,436 points (up 27.4%).

Overall, the S&P BSE SENSEX is up 18.6% over the year.

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