SAKSOFT 2023-24 Annual Report Analysis

Wed, 17 Jul

SAKSOFT 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.

SAKSOFT Income Statement Analysis

• Operating income during the year rose 14.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.9% in FY24 as against 16.2% in FY23.
• Depreciation charges increased by 19.4% and finance costs increased by 61.6% YoY, respectively.
• Other income declined by 26.3% YoY.
• Net profit for the year grew by 17.3% YoY.
• Net profit margins during the year grew from 12.3% in FY23 to 12.6% in FY24.

SAKSOFT Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	6,656	7,616	14.4%
Other income	Rs m	94	69	-26.3%
Total Revenues	Rs m	6,750	7,686	13.9%
Gross profit	Rs m	1,082	1,367	26.4%
Depreciation	Rs m	100	119	19.4%
Interest	Rs m	22	35	61.6%
Profit before tax	Rs m	1,054	1,282	21.6%
Tax	Rs m	235	320	36.6%
Profit after tax	Rs m	820	962	17.3%
Gross profit margin	%	16.2	17.9
Effective tax rate	%	22.3	25.0
Net profit margin	%	12.3	12.6

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SAKSOFT Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 2 billion as compared to Rs 1 billion in FY23, thereby witnessing an increase of 53.0%.
• Long-term debt stood at Rs 73 million as compared to Rs 0 million during FY23, a fall of 0.0%.
• Current assets rose 28% and stood at Rs 4 billion, while fixed assets rose 53% and stood at Rs 4 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 8 billion as against Rs 6 billion during FY23, thereby witnessing a growth of 39%.

SAKSOFT Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	4,011	5,000	24.6
Current Liabilities	Rs m	1,412	2,159	53.0
Long-term Debt	Rs m	0	73	0.0
Total Liabilities	Rs m	5,608	7,778	38.7
Current assets	Rs m	3,255	4,178	28.4
Fixed Assets	Rs m	2,353	3,600	53.0
Total Assets	Rs m	5,608	7,778	38.7

SAKSOFT Cash Flow Statement Analysis

• SAKSOFT's cash flow from operating activities (CFO) during FY24 stood at Rs 1 billion, an improvement of 38.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -638 million, an improvement of 7.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 11 million, an improvement of 110% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 540 million from the Rs 140 million net cash flows seen during FY23.

SAKSOFT 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	841	1,167	38.7%
Cash Flow from Investing Activities	Rs m	-594	-638	-
Cash Flow from Financing Activities	Rs m	-107	11	-
Net Cash Flow	Rs m	140	540	285.4%

Current Valuations for SAKSOFT

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.5, an improvement from the EPS of Rs 8.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 308.6, stands at 34.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 4.1 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 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	66.3	75.6
TTM Earnings per share	Rs	8.2	9.5
Diluted earnings per share	Rs	7.7	9.1
Price to Cash Flow	x	16.7	25.4
TTM P/E ratio	x	18.7	34.0
Price / Book Value ratio	x	2.8	5.5
Market Cap	Rs m	11,313	27,424
Dividends per share (Unadj.)	Rs	0.7	0.8

Ratio Analysis for SAKSOFT

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY24, from 2.3x 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 37.4x during FY24, from 49.3x 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 19.2% during FY24, from 20.4% 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 26.0% during FY24, from 26.8% 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 declined and down at 12.8% during FY24, from 15.0% 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	2.3	1.9
Debtors’ Days	Days	64	78
Interest coverage	x	49.3	37.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.0	12.8
Return on equity	%	20.4	19.2
Return on capital employed	%	26.8	26.0

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

SAKSOFT Share Price Performance

Over the last one year, SAKSOFT share price has moved down from Rs 318.1 to Rs 308.6, registering a loss of Rs 9.5 or around 3.0%.

Meanwhile, the S&P BSE IT Index is trading at Rs 39,971.9 (up 0.6%). Over the last one year it has moved up from 31,378.2 to 39,971.9, a gain of 8,594 points (up 27.4%).

Overall, the S&P BSE SENSEX is up 21.2% over the year.

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