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HUL 2018-19 Annual Report Analysis

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HUL 2018-19 Annual Report Analysis
Fri, 7 Jun

HUL 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.

HUL Income Statement Analysis

  • Operating income during the year rose 10.6% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.6% in FY19 as against 21.1% in FY18.
  • Depreciation charges increased by 8.7% and finance costs increased by 26.9% YoY, respectively.
  • Other income grew by 43.2% YoY.
  • Net profit for the year grew by 16.0% YoY.
  • Net profit margins during the year grew from 14.5% in FY18 to 15.2% in FY19.

HUL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 355,450 393,100 10.6%
Other income Rs m 3,840 5,500 43.2%
Total Revenues Rs m 359,290 398,600 10.9%
Gross profit Rs m 74,990 88,800 18.4%
Depreciation Rs m 5,200 5,650 8.7%
Interest Rs m 260 330 26.9%
Profit before tax Rs m 73,370 88,320 20.4%
Tax Rs m 20,790 25,440 22.4%
Profit after tax Rs m 52,250 60,600 16.0%
Gross profit margin % 21.1 22.6
Effective tax rate % 28.3 28.8
Net profit margin % 14.5 15.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HUL Balance Sheet Analysis

  • The company's current liabilities during FY19 down at Rs 87 billion as compared to Rs 89 billion in FY18, thereby witnessing an decrease of -2.5%.
  • Current assets rose 2% and stood at Rs 119 billion, while fixed assets rose 3% and stood at Rs 51 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 186 billion as against Rs 179 billion during FY18, thereby witnessing a growth of 4%.

HUL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 72,810 78,670 8.0
 
Current Liabilities Rs m 88,870 86,670 -2.5
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 178,620 186,290 4.3
 
Current assets Rs m 116,600 119,140 2.2
Fixed Assets Rs m 49,890 51,210 2.6
Total Assets Rs m 178,620 186,290 4.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HUL Cash Flow Statement Analysis

  • HUL's cash flow from operating activities (CFO) during FY19 stood at Rs 58 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -4 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -54 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -280 million from the Rs 210 million net cash flows seen during FY18.

HUL 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 60,590 58,000 -4.3%
Cash Flow from Investing Activities Rs m -10,630 -4,380 -
Cash Flow from Financing Activities Rs m -49,750 -53,900 -
Net Cash Flow Rs m 210 -280 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HUL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.0, an improvement from the EPS of Rs 24.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,834.5, stands at 65.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 43.9 times, while the price to sales ratio stands at 8.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 59.9 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 164.2 181.6
TTM Earnings per share Rs 24.1 28.0
Diluted earnings per share Rs 24.1 28.0
Price to Cash Flow x 69.1 59.9
TTM P/E ratio x 65.8 65.8
Price / Book Value ratio x 34.4 43.9
Market Cap Rs m 3,970,830 3,970,361
Dividends per share (Unadj.) Rs 20.0 22.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HUL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.4x during FY19, from 1.3x 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 deteriorated and stood at 268.6x during FY19, from 283.2x 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 improved and stood at 77.0% during FY19, from 71.8% 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 improved and stood at 109.8% during FY19, from 100.7% 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 improved and stood at 32.7% during FY19, from 29.4% 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 1.3 1.4
Debtors’ Days Days 13 17
Interest coverage x 283.2 268.6
Debt to equity ratio x 0.0 0.0
Return on assets % 29.4 32.7
Return on equity % 71.8 77.0
Return on capital employed % 100.7 109.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HUL Share Price Performance

Over the last one year, HUL share price has moved up from Rs 1,601.8 to Rs 1,834.5, registering a gain of Rs 232.7 or around 14.5%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,537.9 (down 0.2%). Over the last one year it has moved up from 11,243.8 to 11,537.9, a gain of 294 points (up 2.6%).

Overall, the S&P BSE SENSEX is up 12.6% over the year.

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

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