HINDALCO 2019-20 Annual Report Analysis

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HINDALCO 2019-20 Annual Report Analysis
Mon, 23 Nov

HINDALCO has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

HINDALCO Income Statement Analysis

  • Operating income during the year fell 9.5% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 9.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.9% in FY20 as against 11.9% in FY19.
  • Depreciation charges increased by 6.6% and finance costs increased by 11.1% YoY, respectively.
  • Other income grew by 5.2% YoY.
  • Net profit for the year declined by 31.4% YoY.
  • Net profit margins during the year declined from 4.2% in FY19 to 3.2% in FY20.

HINDALCO Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 1,305,423 1,181,440 -9.5%
Other income Rs m 11,271 11,860 5.2%
Total Revenues Rs m 1,316,694 1,193,300 -9.4%
Gross profit Rs m 155,105 140,260 -9.6%
Depreciation Rs m 47,770 50,910 6.6%
Interest Rs m 37,780 41,970 11.1%
Profit before tax Rs m 80,826 59,240 -26.7%
Tax Rs m 25,881 21,570 -16.7%
Profit after tax Rs m 54,950 37,670 -31.4%
Gross profit margin % 11.9 11.9
Effective tax rate % 32.0 36.4
Net profit margin % 4.2 3.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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HINDALCO Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 372 billion as compared to Rs 340 billion in FY19, thereby witnessing an increase of 9.4%.
  • Long-term debt stood at Rs 584 billion as compared to Rs 480 billion during FY19, a growth of 21.5%.
  • Current assets rose 23% and stood at Rs 663 billion, while fixed assets rose 8% and stood at Rs 970 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 1,695 billion as against Rs 1,526 billion during FY19, thereby witnessing a growth of 11%.

HINDALCO Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 575,017 583,174 1.4
 
Current Liabilities Rs m 340,250 372,170 9.4
Long-term Debt Rs m 480,316 583,790 21.5
Total Liabilities Rs m 1,526,317 1,695,280 11.1
 
Current assets Rs m 540,340 662,820 22.7
Fixed Assets Rs m 899,563 969,570 7.8
Total Assets Rs m 1,526,317 1,695,280 11.1
* 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 FY20 stood at Rs 127 billion, an improvement of 5.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -83 billion, an improvement of 47.0% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs 66 billion, an improvement of 221% on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 122 billion from the Rs 11 billion net cash flows seen during FY19.

HINDALCO Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 119,770 126,650 5.7%
Cash Flow from Investing Activities Rs m -56,480 -83,010 -
Cash Flow from Financing Activities Rs m -54,660 66,100 -
Net Cash Flow Rs m 10,555 121,740 1,053.4%
* 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 16.9, an decline from the EPS of Rs 24.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 220.3, stands at 88.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 5.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 587.1 531.3
TTM Earnings per share Rs 24.7 16.9
Diluted earnings per share Rs 24.5 16.8
Price to Cash Flow x 4.8 5.6
TTM P/E ratio x 87.8 88.6
Price / Book Value ratio x 0.9 0.6
Market Cap Rs m 489,761 494,665
Dividends per share (Unadj.) Rs 1.2 1.0
* 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 1.8x during FY20, from 1.6x during FY19. 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 2.4x during FY20, from 3.1x during FY19. 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 6.5% during FY20, from 9.6% during FY20. 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 8.7% during FY20, from 11.2% during FY19. 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 4.7% during FY20, from 6.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.6 1.8
Debtors’ Days Days 32 29
Interest coverage x 3.1 2.4
Debt to equity ratio x 0.8 1.0
Return on assets % 6.1 4.7
Return on equity % 9.6 6.5
Return on capital employed % 11.2 8.7
* 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 190.2 to Rs 220.3, registering a gain of Rs 30.1 or around 15.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 9,773.4 (up 1.3%). Over the last one year it has moved up from 9,377.4 to 9,773.4, a gain of 396 points (up 4.2%).

Overall, the S&P BSE SENSEX is up 8.8% over the year.

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

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Related Views on News

HINDALCO Announces Quarterly Results (3QFY21); Net Profit Up 76.2% (Quarterly Result Update)

Feb 11, 2021 | Updated on Feb 11, 2021

For the quarter ended December 2020, HINDALCO has posted a net profit of Rs 3 bn (up 76.2% YoY). Sales on the other hand came in at Rs 114 bn (up 11.0% YoY). Read on for a complete analysis of HINDALCO's quarterly results.

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.

HINDALCO 2018-19 Annual Report Analysis (Annual Result Update)

Aug 7, 2019 | Updated on Aug 7, 2019

Here's an analysis of the annual report of HINDALCO for 2018-19. 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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