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HUL 2021-22 Annual Report Analysis

Tue, 31 May

HUL 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.

HUL Income Statement Analysis

• Operating income during the year rose 11.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.4% in FY22 as against 24.2% in FY21.
• Depreciation charges increased by 1.6% and finance costs decreased by 9.4% YoY, respectively.
• Other income declined by 37.1% YoY.
• Net profit for the year grew by 11.1% YoY.
• Net profit margins during the year declined from 17.0% in FY21 to 16.9% in FY22.

HUL Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	470,280	524,460	11.5%
Other income	Rs m	4,100	2,580	-37.1%
Total Revenues	Rs m	474,380	527,040	11.1%
Gross profit	Rs m	113,870	128,130	12.5%
Depreciation	Rs m	10,740	10,910	1.6%
Interest	Rs m	1,170	1,060	-9.4%
Profit before tax	Rs m	106,060	118,740	12.0%
Tax	Rs m	26,060	29,870	14.6%
Profit after tax	Rs m	80,000	88,870	11.1%
Gross profit margin	%	24.2	24.4
Effective tax rate	%	24.6	25.2
Net profit margin	%	17.0	16.9

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HUL Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 113 billion as compared to Rs 111 billion in FY21, thereby witnessing an increase of 1.6%.
• Current assets rose 9% and stood at Rs 155 billion, while fixed assets rose 1% and stood at Rs 550 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 705 billion as against Rs 687 billion during FY21, thereby witnessing a growth of 3%.

HUL Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	476,690	490,610	2.9
Current Liabilities	Rs m	111,030	112,800	1.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	687,400	705,060	2.6
Current assets	Rs m	142,170	155,220	9.2
Fixed Assets	Rs m	545,230	549,840	0.8
Total Assets	Rs m	687,400	705,060	2.6

HUL Cash Flow Statement Analysis

• HUL's cash flow from operating activities (CFO) during FY22 stood at Rs 90 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -17 billion, an improvement of 13.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -80 billion, an improvement of 14% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -7 billion from the Rs -14 billion net cash flows seen during FY21.

HUL 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	91,630	90,480	-1.3%
Cash Flow from Investing Activities	Rs m	-15,280	-17,280	-
Cash Flow from Financing Activities	Rs m	-93,090	-80,150	-
Net Cash Flow	Rs m	-13,740	-6,950	-

Current Valuations for HUL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 37.8, an improvement from the EPS of Rs 34.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,322.0, stands at 61.4 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 10.4 times.
• The company's price to cash flow (P/CF) ratio stood at 56.1 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	200.2	223.2
TTM Earnings per share	Rs	34.0	37.8
Diluted earnings per share	Rs	34.0	37.8
Price to Cash Flow	x	62.9	56.1
TTM P/E ratio	x	71.4	61.4
Price / Book Value ratio	x	11.1	11.4
Market Cap	Rs m	5,305,677	5,593,085
Dividends per share (Unadj.)	Rs	40.5	34.0

Ratio Analysis for HUL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY22, from 1.3x 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 113.0x during FY22, from 91.6x 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 18.1% during FY22, from 16.8% 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 24.4% during FY22, from 22.5% 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 12.8% during FY22, from 11.8% 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	1.3	1.4
Debtors’ Days	Days	1	2
Interest coverage	x	91.6	113.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.8	12.8
Return on equity	%	16.8	18.1
Return on capital employed	%	22.5	24.4

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 down from Rs 2,341.4 to Rs 2,322.0, registering a loss of Rs 19.4 or around 0.8%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 14,093.3 (down 0.1%). Over the last one year it has moved up from 13,130.7 to 14,093.3, a gain of 963 points (up 7.3%).

Overall, the S&P BSE SENSEX is up 9.2% over the year.

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

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