XCHANGING SOLUTIONS 2023-24 Annual Report Analysis

Tue, 2 Jul

XCHANGING SOLUTIONS 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.

XCHANGING SOLUTIONS Income Statement Analysis

• Operating income during the year rose 0.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 5.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 26.8% in FY24 as against 28.4% in FY23.
• Depreciation charges decreased by 11.5% and finance costs increased by 1770.0% YoY, respectively.
• Other income grew by 104.0% YoY.
• Net profit for the year declined by 69.5% YoY.
• Net profit margins during the year declined from 25.7% in FY23 to 7.9% in FY24.

XCHANGING SOLUTIONS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,744	1,744	0.0%
Other income	Rs m	107	218	104.0%
Total Revenues	Rs m	1,851	1,963	6.0%
Gross profit	Rs m	496	468	-5.7%
Depreciation	Rs m	6	5	-11.5%
Interest	Rs m	1	19	1,770.0%
Profit before tax	Rs m	596	662	11.0%
Tax	Rs m	147	525	257.0%
Profit after tax	Rs m	449	137	-69.5%
Gross profit margin	%	28.4	26.8
Effective tax rate	%	24.7	79.3
Net profit margin	%	25.7	7.9

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XCHANGING SOLUTIONS 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 34.8%.
• Long-term debt stood at Rs 1 billion as compared to Rs 0 million during FY23, a fall of 0.0%.
• Current assets fell 28% and stood at Rs 4 billion, while fixed assets fell 8% and stood at Rs 2 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 6 billion as against Rs 8 billion during FY23, thereby witnessing a fall of 23%.

XCHANGING SOLUTIONS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	6,762	3,539	-47.7
Current Liabilities	Rs m	1,120	1,510	34.8
Long-term Debt	Rs m	0	1,043	0.0
Total Liabilities	Rs m	8,045	6,210	-22.8
Current assets	Rs m	6,003	4,327	-27.9
Fixed Assets	Rs m	2,043	1,883	-7.8
Total Assets	Rs m	8,045	6,210	-22.8

XCHANGING SOLUTIONS Cash Flow Statement Analysis

• XCHANGING SOLUTIONS's cash flow from operating activities (CFO) during FY24 stood at Rs -121 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 355 million, an improvement of 267.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -2 billion from the Rs 751 million net cash flows seen during FY23.

XCHANGING SOLUTIONS 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	420	-121	-
Cash Flow from Investing Activities	Rs m	97	355	267.3%
Cash Flow from Financing Activities	Rs m	-5	-2,322	-
Net Cash Flow	Rs m	751	-2,072	-

Current Valuations for XCHANGING SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.2, an decline from the EPS of Rs 4.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 127.0, stands at 103.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 8.1 times.
• The company's price to cash flow (P/CF) ratio stood at 90.2 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	15.7	15.7
TTM Earnings per share	Rs	4.0	1.2
Diluted earnings per share	Rs	4.0	1.2
Price to Cash Flow	x	13.0	90.2
TTM P/E ratio	x	13.2	103.2
Price / Book Value ratio	x	1.2	3.6
Market Cap	Rs m	8,214	12,839
Dividends per share (Unadj.)	Rs	0.0	34.0

Ratio Analysis for XCHANGING SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.9x during FY24, from 5.4x 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 36.4x during FY24, from 597.0x 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 3.9% during FY24, from 6.6% 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 improved and stood at 14.9% during FY24, from 8.8% 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 2.5% during FY24, from 5.6% 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	5.4	2.9
Debtors’ Days	Days	158	239
Interest coverage	x	597.0	36.4
Debt to equity ratio	x	0.0	0.3
Return on assets	%	5.6	2.5
Return on equity	%	6.6	3.9
Return on capital employed	%	8.8	14.9

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

XCHANGING SOLUTIONS Share Price Performance

Over the last one year, XCHANGING SOLUTIONS share price has moved up from Rs 87.8 to Rs 127.0, registering a gain of Rs 39.1 or around 44.6%.

Overall, the S&P BSE SENSEX is up 24.4% over the year.

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