SIGMA SOLVE 2023-24 Annual Report Analysis

Wed, 31 Jul

SIGMA SOLVE 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.

SIGMA SOLVE Income Statement Analysis

• Operating income during the year rose 16.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 35.5% in FY24 as against 40.6% in FY23.
• Depreciation charges increased by 185.6% and finance costs increased by 2157.1% YoY, respectively.
• Other income grew by 148.2% YoY.
• Net profit for the year grew by 5.2% YoY.
• Net profit margins during the year declined from 32.9% in FY23 to 29.7% in FY24.

SIGMA SOLVE Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	558	651	16.5%
Other income	Rs m	14	35	148.2%
Total Revenues	Rs m	573	686	19.8%
Gross profit	Rs m	227	231	1.9%
Depreciation	Rs m	4	11	185.6%
Interest	Rs m	0	3	2,157.1%
Profit before tax	Rs m	237	252	6.5%
Tax	Rs m	53	59	10.9%
Profit after tax	Rs m	184	193	5.2%
Gross profit margin	%	40.6	35.5
Effective tax rate	%	22.4	23.3
Net profit margin	%	32.9	29.7

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

SIGMA SOLVE Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 62 million as compared to Rs 80 million in FY23, thereby witnessing an decrease of -23.0%.
• Long-term debt down at Rs 29 million as compared to Rs 30 million during FY23, a fall of 4.8%.
• Current assets rose 85% and stood at Rs 231 million, while fixed assets fell 67% and stood at Rs 168 million in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 399 million as against Rs 640 million during FY23, thereby witnessing a fall of 38%.

SIGMA SOLVE Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	363	302	-16.8
Current Liabilities	Rs m	80	62	-23.0
Long-term Debt	Rs m	30	29	-4.8
Total Liabilities	Rs m	640	399	-37.6
Current assets	Rs m	125	231	85.4
Fixed Assets	Rs m	515	168	-67.4
Total Assets	Rs m	640	399	-37.6

SIGMA SOLVE Cash Flow Statement Analysis

• SIGMA SOLVE's cash flow from operating activities (CFO) during FY24 stood at Rs 74 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 365 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -412 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 27 million from the Rs -73 million net cash flows seen during FY23.

SIGMA SOLVE 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	203	74	-63.5%
Cash Flow from Investing Activities	Rs m	-308	365	-
Cash Flow from Financing Activities	Rs m	32	-412	-
Net Cash Flow	Rs m	-73	27	-

Current Valuations for SIGMA SOLVE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.8, an improvement from the EPS of Rs 17.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 406.0, stands at 21.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.8 times, while the price to sales ratio stands at 6.4 times.
• The company's price to cash flow (P/CF) ratio stood at 22.1 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	54.3	63.3
TTM Earnings per share	Rs	17.9	18.8
Diluted earnings per share	Rs	17.9	18.8
Price to Cash Flow	x	0.0	22.1
TTM P/E ratio	x	0.0	21.6
Price / Book Value ratio	x	6.8	14.9
Market Cap	Rs m	2,465	4,505
Dividends per share (Unadj.)	Rs	0.5	0.5

Ratio Analysis for SIGMA SOLVE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.7x during FY24, from 1.6x 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 80.8x during FY24, from 1,692.4x 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 improved and stood at 64.0% during FY24, from 50.6% 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 77.1% during FY24, from 60.2% 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 49.2% during FY24, from 28.7% 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	1.6	3.7
Debtors’ Days	Days	355	819
Interest coverage	x	1,692.4	80.8
Debt to equity ratio	x	0.1	0.1
Return on assets	%	28.7	49.2
Return on equity	%	50.6	64.0
Return on capital employed	%	60.2	77.1

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

SIGMA SOLVE Share Price Performance

Over the last one year, SIGMA SOLVE share price has moved down from Rs 462.5 to Rs 406.0, registering a loss of Rs 56.5 or around 12.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 41,778.9 (up 0.2%). Over the last one year it has moved up from 30,276.6 to 41,778.9, a gain of 11,502 points (up 38.0%).

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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