EXPLEO SOLUTIONS 2023-24 Annual Report Analysis

Wed, 7 Aug

EXPLEO 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.

EXPLEO SOLUTIONS Income Statement Analysis

• Operating income during the year rose 6.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 25.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.4% in FY24 as against 22.2% in FY23.
• Depreciation charges increased by 20.7% and finance costs increased by 15.6% YoY, respectively.
• Other income declined by 53.4% YoY.
• Net profit for the year declined by 32.5% YoY.
• Net profit margins during the year declined from 14.8% in FY23 to 9.4% in FY24.

EXPLEO SOLUTIONS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	9,033	9,649	6.8%
Other income	Rs m	161	75	-53.4%
Total Revenues	Rs m	9,194	9,724	5.8%
Gross profit	Rs m	2,001	1,483	-25.9%
Depreciation	Rs m	279	337	20.7%
Interest	Rs m	23	26	15.6%
Profit before tax	Rs m	1,861	1,196	-35.7%
Tax	Rs m	522	291	-44.2%
Profit after tax	Rs m	1,339	904	-32.5%
Gross profit margin	%	22.2	15.4
Effective tax rate	%	28.1	24.4
Net profit margin	%	14.8	9.4

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EXPLEO SOLUTIONS Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 1 billion as compared to Rs 2 billion in FY23, thereby witnessing an decrease of -38.2%.
• Current assets rose 8% and stood at Rs 6 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 8 billion as against Rs 7 billion during FY23, thereby witnessing a growth of 4%.

EXPLEO SOLUTIONS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	5,301	6,110	15.3
Current Liabilities	Rs m	1,677	1,036	-38.2
Long-term Debt	Rs m	4	0	-100.0
Total Liabilities	Rs m	7,302	7,608	4.2
Current assets	Rs m	5,528	5,977	8.1
Fixed Assets	Rs m	1,774	1,631	-8.1
Total Assets	Rs m	7,302	7,608	4.2

EXPLEO SOLUTIONS Cash Flow Statement Analysis

• EXPLEO SOLUTIONS's cash flow from operating activities (CFO) during FY24 stood at Rs 692 million, an improvement of 199.9% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -292 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -152 million on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 236 million from the Rs -205 million net cash flows seen during FY23.

EXPLEO 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	231	692	199.9%
Cash Flow from Investing Activities	Rs m	-360	-292	-
Cash Flow from Financing Activities	Rs m	-66	-152	-
Net Cash Flow	Rs m	-205	236	-

Current Valuations for EXPLEO SOLUTIONS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 58.3, an decline from the EPS of Rs 86.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,288.0, stands at 21.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 18.0 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	582.0	621.7
TTM Earnings per share	Rs	86.3	58.3
Diluted earnings per share	Rs	86.3	58.3
Price to Cash Flow	x	11.9	18.0
TTM P/E ratio	x	14.3	21.2
Price / Book Value ratio	x	4.2	3.7
Market Cap	Rs m	22,272	22,366
Dividends per share (Unadj.)	Rs	5.0	0.0

Ratio Analysis for EXPLEO SOLUTIONS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 5.8x during FY24, from 3.3x 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 46.8x during FY24, from 83.5x 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 14.8% during FY24, from 25.3% 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 20.0% during FY24, from 35.5% 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 12.2% during FY24, from 18.6% 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	3.3	5.8
Debtors’ Days	Days	97	94
Interest coverage	x	83.5	46.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	18.6	12.2
Return on equity	%	25.3	14.8
Return on capital employed	%	35.5	20.0

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

EXPLEO SOLUTIONS Share Price Performance

Over the last one year, EXPLEO SOLUTIONS share price has moved down from Rs 1,734.8 to Rs 1,288.0, registering a loss of Rs 446.9 or around 25.8%.

Meanwhile, the S&P BSE IT Index is trading at Rs 39,919.8 (up 1.6%). Over the last one year it has moved up from 31,109.7 to 39,919.8, a gain of 8,810 points (up 28.3%).

Overall, the S&P BSE SENSEX is up 20.3% over the year.

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