HUL 2020-21 Annual Report Analysis

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HUL 2020-21 Annual Report Analysis
Mon, 26 Jul

HUL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

HUL Income Statement Analysis

  • Operating income during the year rose 18.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 17.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.2% in FY21 as against 24.3% in FY20.
  • Depreciation charges increased by 7.2% and finance costs decreased by 0.8% YoY, respectively.
  • Other income declined by 35.1% YoY.
  • Net profit for the year grew by 18.4% YoY.
  • Net profit margins during the year grew from 16.7% in FY20 to 16.9% in FY21.

HUL Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 397,830 470,290 18.2%
Other income Rs m 6,320 4,100 -35.1%
Total Revenues Rs m 404,150 474,390 17.4%
Gross profit Rs m 96,550 113,860 17.9%
Depreciation Rs m 10,020 10,740 7.2%
Interest Rs m 1,180 1,170 -0.8%
Profit before tax Rs m 91,670 106,050 15.7%
Tax Rs m 24,110 26,060 8.1%
Profit after tax Rs m 67,560 79,990 18.4%
Gross profit margin % 24.3 24.2
Effective tax rate % 26.3 24.6
Net profit margin % 16.7 16.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HUL Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 111 billion as compared to Rs 93 billion in FY20, thereby witnessing an increase of 19.2%.
  • Current assets rose 15% and stood at Rs 142 billion, while fixed assets rose 621% and stood at Rs 545 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 687 billion as against Rs 199 billion during FY20, thereby witnessing a growth of 246%.

HUL Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 82,140 476,690 480.3
 
Current Liabilities Rs m 93,170 111,030 19.2
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 198,690 687,410 246.0
 
Current assets Rs m 123,030 142,010 15.4
Fixed Assets Rs m 75,660 545,400 620.9
Total Assets Rs m 198,690 687,410 246.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HUL Cash Flow Statement Analysis

  • HUL's cash flow from operating activities (CFO) during FY21 stood at Rs 92 billion, an improvement of 20.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -93 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -14 billion from the Rs 26 billion net cash flows seen during FY20.

HUL Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 76,230 91,630 20.2%
Cash Flow from Investing Activities Rs m 17,910 -15,280 -
Cash Flow from Financing Activities Rs m -68,190 -93,090 -
Net Cash Flow Rs m 25,950 -13,740 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HUL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.0, an improvement from the EPS of Rs 31.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 2,352.0, stands at 67.4 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 11.1 times, while the price to sales ratio stands at 11.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 60.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 183.8 200.2
TTM Earnings per share Rs 31.2 34.0
Diluted earnings per share Rs 28.8 34.0
Price to Cash Flow x 65.6 60.9
TTM P/E ratio x 62.1 67.4
Price / Book Value ratio x 52.2 11.1
Market Cap Rs m 5,091,277 5,526,066
Dividends per share (Unadj.) Rs 25.0 40.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HUL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY21, from 1.3x during FY20. 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 91.6x during FY21, from 78.7x during FY20. 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 16.8% during FY21, from 82.2% during FY21. 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 22.5% during FY21, from 113.0% during FY20. 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 11.8% during FY21, from 34.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.3 1.3
Debtors’ Days Days 11 14
Interest coverage x 78.7 91.6
Debt to equity ratio x 0.0 0.0
Return on assets % 34.6 11.8
Return on equity % 82.2 16.8
Return on capital employed % 113.0 22.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 2,209.8 to Rs 2,352.0, registering a gain of Rs 142.2 or around 6.4%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 13,631.6 (down 0.1%). Over the last one year it has moved up from 11,477.3 to 13,631.6, a gain of 2,154 points (up 18.8%).

Overall, the S&P BSE SENSEX is up 39.6% over the year.

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

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