HUL 2022-23 Annual Report Analysis

Wed, 31 May

HUL 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.

HUL Income Statement Analysis

• Operating income during the year rose 15.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 9.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 23.3% in FY23 as against 24.4% in FY22.
• Depreciation charges increased by 4.3% and finance costs increased by 7.5% YoY, respectively.
• Other income grew by 98.4% YoY.
• Net profit for the year grew by 14.1% YoY.
• Net profit margins during the year declined from 16.9% in FY22 to 16.7% in FY23.

HUL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	524,460	605,800	15.5%
Other income	Rs m	2,580	5,120	98.4%
Total Revenues	Rs m	527,040	610,920	15.9%
Gross profit	Rs m	128,130	140,850	9.9%
Depreciation	Rs m	10,910	11,380	4.3%
Interest	Rs m	1,060	1,140	7.5%
Profit before tax	Rs m	118,740	133,450	12.4%
Tax	Rs m	29,870	32,010	7.2%
Profit after tax	Rs m	88,870	101,440	14.1%
Gross profit margin	%	24.4	23.3
Effective tax rate	%	25.2	24.0
Net profit margin	%	16.9	16.7

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HUL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 120 billion as compared to Rs 113 billion in FY22, thereby witnessing an increase of 6.6%.
• Current assets rose 10% and stood at Rs 170 billion, while fixed assets rose 2% and stood at Rs 561 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 731 billion as against Rs 705 billion during FY22, thereby witnessing a growth of 4%.

HUL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	490,610	503,040	2.5
Current Liabilities	Rs m	112,800	120,280	6.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	705,060	730,770	3.6
Current assets	Rs m	155,090	169,860	9.5
Fixed Assets	Rs m	549,840	560,790	2.0
Total Assets	Rs m	705,060	730,770	3.6

HUL Cash Flow Statement Analysis

• HUL's cash flow from operating activities (CFO) during FY23 stood at Rs 100 billion, an improvement of 10.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -15 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -90 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -4 billion from the Rs -7 billion net cash flows seen during FY22.

HUL 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	90,480	99,910	10.4%
Cash Flow from Investing Activities	Rs m	-17,280	-14,940	-
Cash Flow from Financing Activities	Rs m	-80,150	-89,530	-
Net Cash Flow	Rs m	-6,950	-4,460	-

Current Valuations for HUL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.2, an improvement from the EPS of Rs 37.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,639.3, stands at 61.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.3 times, while the price to sales ratio stands at 10.2 times.
• The company's price to cash flow (P/CF) ratio stood at 49.8 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	223.2	257.8
TTM Earnings per share	Rs	37.8	43.2
Diluted earnings per share	Rs	37.8	43.2
Price to Cash Flow	x	48.2	49.8
TTM P/E ratio	x	54.2	61.1
Price / Book Value ratio	x	11.4	11.2
Market Cap	Rs m	5,593,085	5,614,172
Dividends per share (Unadj.)	Rs	34.0	39.0

Ratio Analysis for HUL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY23, from 1.4x 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 improved and stood at 118.1x during FY23, from 113.0x 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 improved and stood at 20.2% 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 improved and stood at 26.8% during FY23, from 24.4% 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 improved and stood at 14.0% during FY23, from 12.8% 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	1.4	1.4
Debtors’ Days	Days	2	2
Interest coverage	x	113.0	118.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.8	14.0
Return on equity	%	18.1	20.2
Return on capital employed	%	24.4	26.8

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 2,349.7 to Rs 2,639.3, registering a gain of Rs 289.7 or around 12.3%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 18,225.8 (down 0.1%). Over the last one year it has moved up from 14,166.7 to 18,225.8, a gain of 4,059 points (up 28.7%).

Overall, the S&P BSE SENSEX is up 15.6% over the year.

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