HIL 2017-18 Annual Report Analysis

Sat, 31 Mar

HIL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

HIL Income Statement Analysis

• Operating income during the year rose 24.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 49.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.8% in FY18 as against 9.8% in FY17.
• Depreciation charges increased by 14.5% and finance costs decreased by 25.4% YoY, respectively.
• Other income grew by 13.1% YoY.
• Net profit for the year grew by 47.8% YoY.
• Net profit margins during the year grew from 5.5% in FY17 to 6.6% in FY18.

HIL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	9,928	12,322	24.1%
Other income	Rs m	226	255	13.1%
Total Revenues	Rs m	10,154	12,577	23.9%
Gross profit	Rs m	971	1,452	49.5%
Depreciation	Rs m	410	469	14.5%
Interest	Rs m	52	39	-25.4%
Profit before tax	Rs m	735	1,199	63.1%
Tax	Rs m	189	392	107.2%
Profit after tax	Rs m	546	808	47.8%
Gross profit margin	%	9.8	11.8
Effective tax rate	%	25.7	32.7
Net profit margin	%	5.5	6.6

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HIL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 3 billion as compared to Rs 3 billion in FY17, thereby witnessing an increase of 25.5%.
• Long-term debt stood at Rs 665 million as compared to Rs 590 million during FY17, a growth of 12.7%.
• Current assets rose 29% and stood at Rs 4 billion, while fixed assets rose 7% and stood at Rs 6 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 10 billion as against Rs 9 billion during FY17, thereby witnessing a growth of 16%.

HIL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	5,030	5,652	12.4
Current Liabilities	Rs m	2,678	3,362	25.5
Long-term Debt	Rs m	590	665	12.7
Total Liabilities	Rs m	8,805	10,187	15.7
Current assets	Rs m	3,456	4,460	29.1
Fixed Assets	Rs m	5,349	5,727	7.1
Total Assets	Rs m	8,805	10,187	15.7

HIL Cash Flow Statement Analysis

• HIL's cash flow from operating activities (CFO) during FY18 stood at Rs 2 billion, an improvement of 24.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -2 billion, an improvement of 365.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -203 million, an improvement of 81% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 19 million from the Rs 61 million net cash flows seen during FY17.

HIL Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	1,506	1,874	24.4%
Cash Flow from Investing Activities	Rs m	-355	-1,652	-
Cash Flow from Financing Activities	Rs m	-1,090	-203	-
Net Cash Flow	Rs m	61	19	-69.4%

Current Valuations for HIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 108.3, an improvement from the EPS of Rs 73.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,618.0, stands at 15.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	1,330.9	1,651.7
TTM Earnings per share	Rs	73.2	108.3
Diluted earnings per share	Rs	72.7	107.5
Price to Cash Flow	x	6.2	7.7
TTM P/E ratio	x	10.8	15.1
Price / Book Value ratio	x	1.0	1.7
Market Cap	Rs m	4,854	9,843
Dividends per share (Unadj.)	Rs	20.0	22.5

Ratio Analysis for HIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY18, from 1.3x during FY17. 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 32.0x during FY18, from 15.2x during FY17. 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 14.3% during FY18, from 10.9% during FY18. 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 19.6% during FY18, from 14.0% during FY17. 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 8.3% during FY18, from 6.8% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.3	1.3
Debtors’ Days	Days	318	295
Interest coverage	x	15.2	32.0
Debt to equity ratio	x	0.1	0.1
Return on assets	%	6.8	8.3
Return on equity	%	10.9	14.3
Return on capital employed	%	14.0	19.6

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 up from Rs 783.6 to Rs 1,618.0, registering a gain of Rs 834.4 or around 106.5%.

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Read: Latest Annual Report Analysis of HIL