HINDALCO 2021-22 Annual Report Analysis

Tue, 2 Aug

HINDALCO has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

HINDALCO Income Statement Analysis

• Operating income during the year fell 51.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.1% in FY22 as against 10.4% in FY21.
• Depreciation charges decreased by 73.6% and finance costs decreased by 62.2% YoY, respectively.
• Other income declined by 57.9% YoY.
• Net profit for the year grew by 58.3% YoY.
• Net profit margins during the year grew from 2.5% in FY21 to 8.1% in FY22.

HINDALCO Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	1,399,330	676,530	-51.7%
Other income	Rs m	16,870	7,110	-57.9%
Total Revenues	Rs m	1,416,200	683,640	-51.7%
Gross profit	Rs m	145,270	109,150	-24.9%
Depreciation	Rs m	66,280	17,520	-73.6%
Interest	Rs m	37,520	14,170	-62.2%
Profit before tax	Rs m	58,340	84,570	45.0%
Tax	Rs m	23,560	29,500	25.2%
Profit after tax	Rs m	34,780	55,070	58.3%
Gross profit margin	%	10.4	16.1
Effective tax rate	%	40.4	34.9
Net profit margin	%	2.5	8.1

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HINDALCO Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 283 billion as compared to Rs 485 billion in FY21, thereby witnessing an decrease of -41.7%.
• Long-term debt down at Rs 117 billion as compared to Rs 590 billion during FY21, a fall of 80.2%.
• Current assets fell 43% and stood at Rs 389 billion, while fixed assets fell 50% and stood at Rs 602 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 991 billion as against Rs 1,888 billion during FY21, thereby witnessing a fall of 48%.

HINDALCO Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	666,080	545,510	-18.1
Current Liabilities	Rs m	484,930	282,770	-41.7
Long-term Debt	Rs m	589,850	116,680	-80.2
Total Liabilities	Rs m	1,888,120	990,570	-47.5
Current assets	Rs m	676,280	388,670	-42.5
Fixed Assets	Rs m	1,211,840	601,900	-50.3
Total Assets	Rs m	1,888,120	990,570	-47.5

HINDALCO Cash Flow Statement Analysis

• HINDALCO's cash flow from operating activities (CFO) during FY22 stood at Rs 52 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -19 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -9 billion, an improvement of 82% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 24 billion from the Rs -129 billion net cash flows seen during FY21.

HINDALCO Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	172,320	52,080	-69.8%
Cash Flow from Investing Activities	Rs m	-256,370	-19,370	-
Cash Flow from Financing Activities	Rs m	-48,820	-8,690	-
Net Cash Flow	Rs m	-129,300	24,020	-

Current Valuations for HINDALCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.8, an improvement from the EPS of Rs 15.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 415.6, stands at 6.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.7 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 14.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	628.9	304.1
TTM Earnings per share	Rs	15.6	24.8
Diluted earnings per share	Rs	15.5	24.5
Price to Cash Flow	x	7.3	14.8
TTM P/E ratio	x	14.2	6.6
Price / Book Value ratio	x	0.8	2.0
Market Cap	Rs m	500,311	1,073,187
Dividends per share (Unadj.)	Rs	3.0	4.0

Ratio Analysis for HINDALCO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY22, from 1.4x during FY21. 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 7.0x during FY22, from 2.6x during FY21. 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 10.1% during FY22, from 5.2% during FY22. 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 14.9% during FY22, from 7.6% during FY21. 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 7.0% during FY22, from 3.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	3	1
Interest coverage	x	2.6	7.0
Debt to equity ratio	x	0.9	0.2
Return on assets	%	3.8	7.0
Return on equity	%	5.2	10.1
Return on capital employed	%	7.6	14.9

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 445.9 to Rs 415.6, registering a loss of Rs 30.4 or around 6.8%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 18,325.6 (down 0.4%). Over the last one year it has moved down from 21,030.3 to 18,325.6, a loss of 2,705 points (down 12.9%).

Overall, the S&P BSE SENSEX is up 10.4% over the year.

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

Read: Latest Annual Report Analysis of HINDALCO