HINDALCO 2018-19 Annual Report Analysis

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HINDALCO 2018-19 Annual Report Analysis
Wed, 7 Aug

HINDALCO has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

HINDALCO Income Statement Analysis

  • Operating income during the year rose 13.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 12.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.9% in FY19 as against 12.0% in FY18.
  • Depreciation charges increased by 6.0% and finance costs decreased by 3.4% YoY, respectively.
  • Other income grew by 2.0% YoY.
  • Net profit for the year declined by 9.7% YoY.
  • Net profit margins during the year declined from 5.2% in FY18 to 4.2% in FY19.

HINDALCO Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 1,151,828 1,305,423 13.3%
Other income Rs m 11,046 11,271 2.0%
Total Revenues Rs m 1,162,874 1,316,694 13.2%
Gross profit Rs m 138,204 155,105 12.2%
Depreciation Rs m 45,062 47,770 6.0%
Interest Rs m 39,107 37,780 -3.4%
Profit before tax Rs m 65,080 80,826 24.2%
Tax Rs m 20,742 25,881 24.8%
Profit after tax Rs m 60,829 54,950 -9.7%
Gross profit margin % 12.0 11.9
Effective tax rate % 31.9 32.0
Net profit margin % 5.2 4.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HINDALCO Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 337 billion as compared to Rs 328 billion in FY18, thereby witnessing an increase of 3.0%.
  • Long-term debt stood at Rs 480 billion as compared to Rs 479 billion during FY18, a growth of 0.3%.
  • Current assets rose 8% and stood at Rs 540 billion, while fixed assets rose 3% and stood at Rs 900 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 1,526 billion as against Rs 1,478 billion during FY18, thereby witnessing a growth of 3%.

HINDALCO Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 548,518 575,017 4.8
 
Current Liabilities Rs m 327,607 337,389 3.0
Long-term Debt Rs m 478,743 480,316 0.3
Total Liabilities Rs m 1,478,273 1,526,317 3.3
 
Current assets Rs m 499,633 539,935 8.1
Fixed Assets Rs m 871,514 899,563 3.2
Total Assets Rs m 1,478,273 1,526,317 3.3
* 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 FY19 stood at Rs 120 billion, an improvement of 9.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -57 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -55 billion, an improvement of 67% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 11 billion from the Rs -2 billion net cash flows seen during FY18.

HINDALCO Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 108,977 119,795 9.9%
Cash Flow from Investing Activities Rs m 50,258 -56,517 -
Cash Flow from Financing Activities Rs m -164,124 -54,613 -
Net Cash Flow Rs m -1,815 10,590 -
* 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 24.7, an decline from the EPS of Rs 27.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 177.5, stands at 30.4 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 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 516.8 587.1
TTM Earnings per share Rs 27.3 24.7
Diluted earnings per share Rs 29.5 26.6
Price to Cash Flow x 3.7 3.6
TTM P/E ratio x 32.8 30.4
Price / Book Value ratio x 0.9 0.9
Market Cap Rs m 395,585 366,571
Dividends per share (Unadj.) Rs 1.2 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 1.6x during FY19, from 1.5x during FY18. 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 improved and stood at 3.1x during FY19, from 2.7x during FY18. 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 9.6% during FY19, from 11.1% during FY19. 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 11.2% during FY19, from 11.7% during FY18. 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 6.1% during FY19, from 6.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 1.5 1.6
Debtors’ Days Days 32 32
Interest coverage x 2.7 3.1
Debt to equity ratio x 0.9 0.8
Return on assets % 6.8 6.1
Return on equity % 11.1 9.6
Return on capital employed % 11.7 11.2
* 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 down from Rs 219.1 to Rs 177.5, registering a loss of Rs 41.6 or around 19.0%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 8,934.7 (down 2.0%). Over the last one year it has moved down from 13,065.4 to 8,934.7, a loss of 4,131 points (down 31.6%).

Overall, the S&P BSE SENSEX is down 2.3% 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 (3QFY20); Net Profit Down 22.0% (Quarterly Result Update)

Feb 17, 2020 | Updated on Feb 17, 2020

For the quarter ended December 2019, HINDALCO has posted a net profit of Rs 2 bn (down 22.0% YoY). Sales on the other hand came in at Rs 102 bn (down 14.3% YoY). Read on for a complete analysis of HINDALCO's quarterly results.

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Dec 21, 2018 | Updated on Dec 21, 2018

Here's an analysis of the annual report of HINDALCO for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of HINDALCO. Also includes updates on the valuation of HINDALCO.

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