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HIL 2022-23 Annual Report Analysis

Mon, 10 Jul

HIL 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.

HIL Income Statement Analysis

• Operating income during the year fell 1.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 43.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.4% in FY23 as against 11.2% in FY22.
• Depreciation charges decreased by 4.8% and finance costs increased by 55.2% YoY, respectively.
• Other income declined by 16.8% YoY.
• Net profit for the year declined by 53.9% YoY.
• Net profit margins during the year declined from 6.0% in FY22 to 2.8% in FY23.

HIL Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	35,202	34,790	-1.2%
Other income	Rs m	304	253	-16.8%
Total Revenues	Rs m	35,507	35,043	-1.3%
Gross profit	Rs m	3,936	2,217	-43.7%
Depreciation	Rs m	1,163	1,108	-4.8%
Interest	Rs m	126	196	55.2%
Profit before tax	Rs m	2,951	1,167	-60.4%
Tax	Rs m	847	196	-76.8%
Profit after tax	Rs m	2,104	971	-53.9%
Gross profit margin	%	11.2	6.4
Effective tax rate	%	28.7	16.8
Net profit margin	%	6.0	2.8

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HIL Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 8 billion as compared to Rs 7 billion in FY22, thereby witnessing an increase of 3.8%.
• Long-term debt stood at Rs 2 billion as compared to Rs 2 billion during FY22, a growth of 24.8%.
• Current assets rose 3% and stood at Rs 10 billion, while fixed assets rose 9% and stood at Rs 13 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 24 billion as against Rs 22 billion during FY22, thereby witnessing a growth of 6%.

HIL Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	11,641	12,435	6.8
Current Liabilities	Rs m	7,414	7,694	3.8
Long-term Debt	Rs m	1,634	2,038	24.8
Total Liabilities	Rs m	22,231	23,644	6.4
Current assets	Rs m	10,112	10,455	3.4
Fixed Assets	Rs m	12,119	13,189	8.8
Total Assets	Rs m	22,231	23,644	6.4

HIL Cash Flow Statement Analysis

• HIL's cash flow from operating activities (CFO) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -2 billion, an improvement of 252.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 421 million, an improvement of 123% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -2 million from the Rs -648 million net cash flows seen during FY22.

HIL 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	1,663	1,320	-20.6%
Cash Flow from Investing Activities	Rs m	-504	-1,777	-
Cash Flow from Financing Activities	Rs m	-1,793	421	-
Net Cash Flow	Rs m	-648	-2	-

Current Valuations for HIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 128.8, an decline from the EPS of Rs 280.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,021.5, stands at 23.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 0.7 times.
• The company's price to cash flow (P/CF) ratio stood at 11.8 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	4,687.4	4,614.0
TTM Earnings per share	Rs	280.2	128.8
Diluted earnings per share	Rs	279.2	128.8
Price to Cash Flow	x	9.2	11.8
TTM P/E ratio	x	14.4	23.2
Price / Book Value ratio	x	3.1	2.0
Market Cap	Rs m	36,255	24,461
Dividends per share (Unadj.)	Rs	65.0	45.0

Ratio Analysis for HIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated 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 deteriorated and stood at 7.0x during FY23, from 24.4x 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 declined and down at 7.8% 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 declined and down at 9.4% during FY23, from 23.2% 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 declined and down at 4.9% during FY23, from 10.0% 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	114	135
Interest coverage	x	24.4	7.0
Debt to equity ratio	x	0.1	0.2
Return on assets	%	10.0	4.9
Return on equity	%	18.1	7.8
Return on capital employed	%	23.2	9.4

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

HIL Share Price Performance

Over the last one year, HIL share price has moved down from Rs 3,524.6 to Rs 3,021.5, registering a loss of Rs 503.2 or around 14.3%.

Overall, the S&P BSE SENSEX is up 22.9% over the year.

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