UNITED SPIRITS 2018-19 Annual Report Analysis

Sun, 31 Mar

UNITED SPIRITS has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

UNITED SPIRITS Income Statement Analysis

• Operating income during the year rose 8.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 20.1% YoY during the fiscal. Operating profit margins witnessed a growth and stood at 13.7% in FY19 as against 12.4% in FY18.
• Depreciation charges increased by 11.6% and finance costs decreased by 14.5% YoY, respectively.
• Other income declined by 68.4% YoY.
• Net profit for the year grew by 5.1% YoY.
• Net profit margins during the year grew from 7.0% in FY18 to 6.7% in FY19.

UNITED SPIRITS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	-93,747	-101,909	8.7%
Other income	Rs m	2,189	692	-68.4%
Total Revenues	Rs m	-91,558	-101,217	10.5%
Gross profit	Rs m	11,627	13,962	20.1%
Depreciation	Rs m	1,923	2,147	11.6%
Interest	Rs m	2,775	2,372	-14.5%
Profit before tax	Rs m	9,118	10,135	11.2%
Tax	Rs m	2,599	3,281	26.2%
Profit after tax	Rs m	6,519	6,854	5.1%
Gross profit margin	%	-12.4	-13.7
Effective tax rate	%	28.5	32.4
Net profit margin	%	-7.0	-6.7

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UNITED SPIRITS Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 61 billion as compared to Rs 58 billion in FY18, thereby witnessing an increase of 5.6%.
• Long-term debt stood at Rs 8 billion as compared to Rs 8 billion during FY18, a growth of 2.3%.
• Current assets rose 7% and stood at Rs 62 billion, while fixed assets rose 15% and stood at Rs 36 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 98 billion as against Rs 89 billion during FY18, thereby witnessing a growth of 10%.

UNITED SPIRITS Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	24,191	30,903	27.7
Current Liabilities	Rs m	58,175	61,438	5.6
Long-term Debt	Rs m	7,628	7,804	2.3
Total Liabilities	Rs m	88,942	97,749	9.9
Current assets	Rs m	58,017	62,198	7.2
Fixed Assets	Rs m	30,925	35,551	15.0
Total Assets	Rs m	88,942	97,749	9.9

UNITED SPIRITS Cash Flow Statement Analysis

• UNITED SPIRITS's cash flow from operating activities (CFO) during FY19 stood at Rs 9 billion, an improvement of 2.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -655 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -8 billion, an improvement of 16% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 745 million from the Rs 634 million net cash flows seen during FY18.

UNITED SPIRITS Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	9,251	9,483	2.5%
Cash Flow from Investing Activities	Rs m	1,044	-655	-
Cash Flow from Financing Activities	Rs m	-9,661	-8,083	-
Net Cash Flow	Rs m	634	745	17.5%

Current Valuations for UNITED SPIRITS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.4, an decline from the EPS of Rs 44.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 553.0, stands at 61.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.0 times, while the price to sales ratio stands at -3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 165.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	-645.1	-140.2
TTM Earnings per share	Rs	44.9	9.4
Diluted earnings per share	Rs	9.0	9.4
Price to Cash Flow	x	269.0	165.2
TTM P/E ratio	x	404.4	61.0
Price / Book Value ratio	x	17.5	48.1
Market Cap	Rs m	423,972	1,487,066
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for UNITED SPIRITS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.0x during FY19, from 1.0x during FY18. 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 5.3x during FY19, from 4.3x during FY18. 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 22.2% during FY19, from 26.9% during FY19. 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 32.3% during FY19, from 37.4% during FY18. 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 9.4% during FY19, from 10.4% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.0	1.0
Debtors’ Days	Days	-106	-91
Interest coverage	x	4.3	5.3
Debt to equity ratio	x	0.3	0.3
Return on assets	%	10.4	9.4
Return on equity	%	26.9	22.2
Return on capital employed	%	37.4	32.3

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

UNITED SPIRITS Share Price Performance

Over the last one year, UNITED SPIRITS share price has moved down from Rs 3,125.8 to Rs 553.0, registering a loss of Rs 2,572.8 or around 82.3%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of UNITED SPIRITS