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HINDALCO 2017-18 Annual Report Analysis

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HINDALCO 2017-18 Annual Report Analysis
Fri, 21 Dec

HINDALCO has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

HINDALCO Income Statement Analysis

  • Operating income during the year rose 15.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 11.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.0% in FY18 as against 12.4% in FY17.
  • Depreciation charges increased by 1.1% and finance costs decreased by 31.9% YoY, respectively.
  • Other income declined by 0.6% YoY.
  • Net profit for the year grew by 223.2% YoY.
  • Net profit margins during the year grew from 1.9% in FY17 to 5.2% in FY18.

HINDALCO Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 1,001,838 1,151,717 15.0%
Other income Rs m 11,110 11,046 -0.6%
Total Revenues Rs m 1,012,948 1,162,763 14.8%
Gross profit Rs m 124,364 138,204 11.1%
Depreciation Rs m 44,572 45,062 1.1%
Interest Rs m 57,424 39,107 -31.9%
Profit before tax Rs m 33,477 65,080 94.4%
Tax Rs m 14,326 20,742 44.8%
Profit after tax Rs m 18,823 60,829 223.2%
Gross profit margin % 12.4 12.0
Effective tax rate % 42.8 31.9
Net profit margin % 1.9 5.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HINDALCO Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 323 billion as compared to Rs 382 billion in FY17, thereby witnessing an decrease of -15.3%.
  • Long-term debt down at Rs 479 billion as compared to Rs 519 billion during FY17, a fall of 7.7%.
  • Current assets fell 0% and stood at Rs 500 billion, while fixed assets rose 1% and stood at Rs 872 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 1,477 billion as against Rs 1,470 billion during FY17, thereby witnessing a growth of 0%.

HINDALCO Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 460,588 548,518 19.1
 
Current Liabilities Rs m 381,635 323,165 -15.3
Long-term Debt Rs m 518,553 478,743 -7.7
Total Liabilities Rs m 1,469,942 1,476,571 0.5
 
Current assets Rs m 501,140 499,633 -0.3
Fixed Assets Rs m 865,007 871,514 0.8
Total Assets Rs m 1,469,942 1,476,571 0.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HINDALCO Cash Flow Statement Analysis

  • HINDALCO's cash flow from operating activities (CFO) during FY18 stood at Rs 109 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 50 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -164 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -2 billion from the Rs 40 billion net cash flows seen during FY17.

HINDALCO Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 126,875 108,877 -14.2%
Cash Flow from Investing Activities Rs m -27,885 50,258 -
Cash Flow from Financing Activities Rs m -55,523 -164,124 -
Net Cash Flow Rs m 39,604 -1,815 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HINDALCO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.1, an improvement from the EPS of Rs 8.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 226.8, stands at 31.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 446.5 512.9
TTM Earnings per share Rs 8.4 27.1
Diluted earnings per share Rs 9.1 29.5
Price to Cash Flow x 8.0 4.4
TTM P/E ratio x 34.5 31.8
Price / Book Value ratio x 0.7 0.9
Market Cap Rs m 508,782 468,281
Dividends per share (Unadj.) Rs 1.1 1.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HINDALCO

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.5x during FY18, from 1.3x during FY17. 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 2.7x during FY18, from 1.6x during FY17. 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 11.1% during FY18, from 4.1% during FY18. 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 11.7% during FY18, from 9.3% during FY17. 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 6.8% during FY18, from 5.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.3 1.5
Debtors’ Days Days 30 32
Interest coverage x 1.6 2.7
Debt to equity ratio x 1.1 0.9
Return on assets % 5.2 6.8
Return on equity % 4.1 11.1
Return on capital employed % 9.3 11.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HINDALCO Share Price Performance

Over the last one year, HINDALCO share price has moved up from Rs 263.1 to Rs 226.8, registering a loss of Rs 36.3 or around 13.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 11,997.6 (up 0.9%). Over the last one year it has moved down from 14,536.6 to 11,997.6, a loss of 2,539 points (down 17.5%).

Overall, the S&P BSE SENSEX is up 7.8% over the year.

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

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HINDALCO Announces Quarterly Results (3QFY19); Net Profit Down 34.1% (Quarterly Result Update)

Feb 18, 2019 | Updated on Feb 18, 2019

For the quarter ended December 2018, HINDALCO has posted a net profit of Rs 2 bn (down 34.1% YoY). Sales on the other hand came in at Rs 119 bn (up 8.3% YoY). Read on for a complete analysis of HINDALCO's quarterly results.

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