R SYSTEM INTL 2022-23 Annual Report Analysis

Mon, 20 May

R SYSTEM INTL has announced its results for the year ended December 2023. Let us have a look at the detailed performance review of the company during FY22-23.

R SYSTEM INTL Income Statement Analysis

• Operating income during the year rose 11.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.0% in CY23 as against 13.2% in CY22.
• Depreciation charges increased by 55.5% and finance costs increased by 82.7% YoY, respectively.
• Other income grew by 12.1% YoY.
• Net profit for the year grew by 0.3% YoY.
• Net profit margins during the year declined from 9.2% in CY22 to 8.3% in CY23.

R SYSTEM INTL Income Statement 2022-23

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Net Sales	Rs m	15,158	16,845	11.1%
Other income	Rs m	103	115	12.1%
Total Revenues	Rs m	15,261	16,961	11.1%
Gross profit	Rs m	1,997	2,518	26.1%
Depreciation	Rs m	350	544	55.5%
Interest	Rs m	49	90	82.7%
Profit before tax	Rs m	1,702	2,000	17.6%
Tax	Rs m	305	599	96.6%
Profit after tax	Rs m	1,397	1,401	0.3%
Gross profit margin	%	13.2	15.0
Effective tax rate	%	17.9	30.0
Net profit margin	%	9.2	8.3

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R SYSTEM INTL Balance Sheet Analysis

• The company's current liabilities during CY23 stood at Rs 4 billion as compared to Rs 2 billion in CY22, thereby witnessing an increase of 86.0%.
• Long-term debt stood at Rs 17 million as compared to Rs 13 million during CY22, a growth of 28.0%.
• Current assets fell 1% and stood at Rs 6 billion, while fixed assets rose 263% and stood at Rs 7 billion in CY23.
• Overall, the total assets and liabilities for CY23 stood at Rs 13 billion as against Rs 8 billion during CY22, thereby witnessing a growth of 58%.

R SYSTEM INTL Balance Sheet as on December 2023

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*	% Change
Networth	Rs m	5,455	6,114	12.1
Current Liabilities	Rs m	1,980	3,683	86.0
Long-term Debt	Rs m	13	17	28.0
Total Liabilities	Rs m	8,111	12,833	58.2
Current assets	Rs m	6,301	6,262	-0.6
Fixed Assets	Rs m	1,809	6,571	263.2
Total Assets	Rs m	8,111	12,833	58.2

R SYSTEM INTL Cash Flow Statement Analysis

• R SYSTEM INTL's cash flow from operating activities (CFO) during CY23 stood at Rs 2 billion, an improvement of 119.3% on a YoY basis.
• Cash flow from investing activities (CFI) during CY23 stood at Rs -2 billion, an improvement of 942.5% on a YoY basis.
• Cash flow from financial activities (CFF) during CY23 stood at Rs -409 million, an improvement of 53% on a YoY basis.
• Overall, net cash flows for the company during CY23 stood at Rs -489 million from the Rs 19 million net cash flows seen during CY22.

R SYSTEM INTL Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-22	Dec-23
Cash Flow from Operating Activities	Rs m	964	2,114	119.3%
Cash Flow from Investing Activities	Rs m	-214	-2,228	-
Cash Flow from Financing Activities	Rs m	-864	-409	-
Net Cash Flow	Rs m	19	-489	-

Current Valuations for R SYSTEM INTL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.8, an improvement from the EPS of Rs 11.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 548.7, stands at 46.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 10.6 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 25.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Sales per share (Unadj.)	Rs	128.1	142.4
TTM Earnings per share	Rs	11.8	11.8
Diluted earnings per share	Rs	11.8	11.8
Price to Cash Flow	x	17.2	25.4
TTM P/E ratio	x	21.5	46.2
Price / Book Value ratio	x	5.9	8.1
Market Cap	Rs m	31,915	49,451
Dividends per share (Unadj.)	Rs	6.5	6.8

Ratio Analysis for R SYSTEM INTL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during CY23, from 3.2x during CY22. 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 23.3x during CY23, from 35.7x during CY22. 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 22.9% during CY23, from 25.6% during CY23. 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 34.1% during CY23, from 32.0% during CY22. 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 11.6% during CY23, from 17.8% during CY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-22*	12 Dec-23*
Current ratio	x	3.2	1.7
Debtors’ Days	Days	62	54
Interest coverage	x	35.7	23.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.8	11.6
Return on equity	%	25.6	22.9
Return on capital employed	%	32.0	34.1

To see how R SYSTEM INTL has performed over the last 5 years, please visit here.

R SYSTEM INTL Share Price Performance

Over the last one year, R SYSTEM INTL share price has moved up from Rs 253.3 to Rs 254.8, registering a gain of Rs 1.5 or around 0.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 28,479.0 (up 2.5%). Over the last one year it has moved down from 36,402.7 to 28,479.0, a loss of 7,924 points (down 21.8%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for R SYSTEM INTL and quarterly results for R SYSTEM INTL)