HINDALCO 2022-23 Annual Report Analysis

Wed, 2 Aug

HINDALCO has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

HINDALCO Income Statement Analysis

• Operating income during the year rose 14.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 21.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.2% in FY23 as against 14.8% in FY22.
• Depreciation charges increased by 5.3% and finance costs decreased by 3.2% YoY, respectively.
• Other income grew by 6.2% YoY.
• Net profit for the year declined by 28.9% YoY.
• Net profit margins during the year declined from 7.3% in FY22 to 4.5% in FY23.

HINDALCO Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	1,950,590	2,232,020	14.4%
Other income	Rs m	12,360	13,130	6.2%
Total Revenues	Rs m	1,962,950	2,245,150	14.4%
Gross profit	Rs m	288,350	226,600	-21.4%
Depreciation	Rs m	67,290	70,860	5.3%
Interest	Rs m	37,680	36,460	-3.2%
Profit before tax	Rs m	195,740	132,410	-32.4%
Tax	Rs m	53,730	31,440	-41.5%
Profit after tax	Rs m	142,010	100,970	-28.9%
Gross profit margin	%	14.8	10.2
Effective tax rate	%	27.4	23.7
Net profit margin	%	7.3	4.5

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HINDALCO Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 605 billion as compared to Rs 773 billion in FY22, thereby witnessing an decrease of -21.8%.
• Long-term debt down at Rs 514 billion as compared to Rs 516 billion during FY22, a fall of 0.4%.
• Current assets fell 9% and stood at Rs 893 billion, while fixed assets rose 9% and stood at Rs 1,342 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 2,235 billion as against Rs 2,219 billion during FY22, thereby witnessing a growth of 1%.

HINDALCO Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	783,150	950,040	21.3
Current Liabilities	Rs m	773,360	604,570	-21.8
Long-term Debt	Rs m	516,350	514,340	-0.4
Total Liabilities	Rs m	2,218,550	2,234,890	0.7
Current assets	Rs m	985,430	893,110	-9.4
Fixed Assets	Rs m	1,233,120	1,341,780	8.8
Total Assets	Rs m	2,218,550	2,234,890	0.7

HINDALCO Cash Flow Statement Analysis

• HINDALCO's cash flow from operating activities (CFO) during FY23 stood at Rs 192 billion, an improvement of 14.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -81 billion, an improvement of 14.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -103 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 12 billion from the Rs 33 billion net cash flows seen during FY22.

HINDALCO Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	168,380	192,080	14.1%
Cash Flow from Investing Activities	Rs m	-70,740	-81,210	-
Cash Flow from Financing Activities	Rs m	-67,650	-103,450	-
Net Cash Flow	Rs m	33,000	11,990	-63.7%

Current Valuations for HINDALCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.4, an decline from the EPS of Rs 63.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 452.3, stands at 10.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.5 times.
• The company's price to cash flow (P/CF) ratio stood at 5.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	876.9	1,004.4
TTM Earnings per share	Rs	63.8	45.4
Diluted earnings per share	Rs	63.2	44.9
Price to Cash Flow	x	6.1	5.8
TTM P/E ratio	x	9.0	10.1
Price / Book Value ratio	x	1.4	1.1
Market Cap	Rs m	1,073,187	1,004,437
Dividends per share (Unadj.)	Rs	4.0	3.0

Ratio Analysis for HINDALCO

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY23, from 1.3x during FY22. 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 4.6x during FY23, from 6.2x during FY22. 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 10.6% during FY23, from 18.1% during FY23. 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 11.5% during FY23, from 18.0% during FY22. 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 FY23, from 8.1% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.3	1.5
Debtors’ Days	Days	4	3
Interest coverage	x	6.2	4.6
Debt to equity ratio	x	0.7	0.5
Return on assets	%	8.1	6.1
Return on equity	%	18.1	10.6
Return on capital employed	%	18.0	11.5

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 418.3 to Rs 452.3, registering a gain of Rs 34.0 or around 8.1%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 21,801.3 (down 2.4%). Over the last one year it has moved up from 18,325.6 to 21,801.3, a gain of 3,476 points (up 19.0%).

Overall, the S&P BSE SENSEX is up 13.2% over the year.

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