HUL 2019-20 Annual Report Analysis

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HUL 2019-20 Annual Report Analysis
Thu, 6 Aug

HUL 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.

HUL Income Statement Analysis

  • Operating income during the year rose 1.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 11.0% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.8% in FY20 as against 22.6% in FY19.
  • Depreciation charges increased by 77.3% and finance costs increased by 257.6% YoY, respectively.
  • Other income grew by 14.9% YoY.
  • Net profit for the year grew by 11.6% YoY.
  • Net profit margins during the year grew from 15.2% in FY19 to 16.7% in FY20.

HUL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 393,100 397,830 1.2%
Other income Rs m 5,500 6,320 14.9%
Total Revenues Rs m 398,600 404,150 1.4%
Gross profit Rs m 88,800 98,610 11.0%
Depreciation Rs m 5,650 10,020 77.3%
Interest Rs m 330 1,180 257.6%
Profit before tax Rs m 88,320 93,730 6.1%
Tax Rs m 25,440 24,090 -5.3%
Profit after tax Rs m 60,600 67,640 11.6%
Gross profit margin % 22.6 24.8
Effective tax rate % 28.8 25.7
Net profit margin % 15.2 16.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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HUL Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 93 billion as compared to Rs 87 billion in FY19, thereby witnessing an increase of 7.5%.
  • Current assets rose 3% and stood at Rs 123 billion, while fixed assets rose 19% and stood at Rs 61 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 202 billion as against Rs 186 billion during FY19, thereby witnessing a growth of 8%.

HUL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 78,670 82,290 4.6
 
Current Liabilities Rs m 86,670 93,170 7.5
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 186,290 201,530 8.2
 
Current assets Rs m 119,140 123,210 3.4
Fixed Assets Rs m 51,210 60,760 18.6
Total Assets Rs m 186,290 201,530 8.2
* 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 FY20 stood at Rs 76 billion, an improvement of 31.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 18 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -68 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 26 billion from the Rs -280 million net cash flows seen during FY19.

HUL 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 58,000 76,230 31.4%
Cash Flow from Investing Activities Rs m -4,380 17,910 -
Cash Flow from Financing Activities Rs m -53,900 -68,190 -
Net Cash Flow Rs m -280 25,950 -
* 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 31.2, an improvement from the EPS of Rs 28.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,216.3, stands at 69.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 52.1 times, while the price to sales ratio stands at 10.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 61.8 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 181.6 183.8
TTM Earnings per share Rs 28.0 31.2
Diluted earnings per share Rs 28.0 31.3
Price to Cash Flow x 72.4 61.8
TTM P/E ratio x 69.9 69.9
Price / Book Value ratio x 43.9 52.1
Market Cap Rs m 4,797,140 4,796,572
Dividends per share (Unadj.) Rs 22.0 25.0
* 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 deteriorated and stood at 1.3x during FY20, from 1.4x 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 80.4x during FY20, from 268.6x 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 improved and stood at 82.2% during FY20, from 77.0% 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 improved and stood at 112.9% during FY20, from 109.8% 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 improved and stood at 34.1% during FY20, from 32.7% 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 1.4 1.3
Debtors’ Days Days 17 11
Interest coverage x 268.6 80.4
Debt to equity ratio x 0.0 0.0
Return on assets % 32.7 34.1
Return on equity % 77.0 82.2
Return on capital employed % 109.8 112.9
* 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 1,744.9 to Rs 2,216.3, registering a gain of Rs 471.4 or around 27.0%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,600.1 (up 1.4%). Over the last one year it has moved up from 10,943.2 to 11,600.1, a gain of 657 points (up 6.0%).

Overall, the S&P BSE SENSEX is up 3.6% over the year.

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

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For the quarter ended September 2020, HUL has posted a net profit of Rs 20 bn (up 8.7% YoY). Sales on the other hand came in at Rs 114 bn (up 16.1% YoY). Read on for a complete analysis of HUL's quarterly results.

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Jun 7, 2019 | Updated on Jun 7, 2019

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