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UNITED SPIRITS 2018-19 Annual Report Analysis

Mon, 16 Sep

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 15.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.9% in FY19 as against 14.1% 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 4.9% YoY.
• Net profit margins during the year declined from 7.4% in FY18 to 7.3% in FY19.

UNITED SPIRITS Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	85,906	93,408	8.7%
Other income	Rs m	2,189	692	-68.4%
Total Revenues	Rs m	88,095	94,100	6.8%
Gross profit	Rs m	12,072	13,918	15.3%
Depreciation	Rs m	1,923	2,147	11.6%
Interest	Rs m	2,775	2,372	-14.5%
Profit before tax	Rs m	9,563	10,091	5.5%
Tax	Rs m	2,599	3,281	26.2%
Profit after tax	Rs m	6,519	6,836	4.9%
Gross profit margin	%	14.1	14.9
Effective tax rate	%	27.2	32.5
Net profit margin	%	7.4	7.3

UNITED SPIRITS Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 52 billion as compared to Rs 57 billion in FY18, thereby witnessing an decrease of -8.6%.
• Long-term debt stood at Rs 8 billion as compared to Rs 8 billion during FY18, a growth of 2.3%.
• Current assets fell 7% and stood at Rs 53 billion, while fixed assets rose 5% and stood at Rs 20 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 91 billion as against Rs 89 billion during FY18, thereby witnessing a growth of 2%.

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	56,777	51,878	-8.6
Long-term Debt	Rs m	7,628	7,804	2.3
Total Liabilities	Rs m	89,258	91,089	2.1
Current assets	Rs m	56,619	52,638	-7.0
Fixed Assets	Rs m	18,931	19,848	4.8
Total Assets	Rs m	89,258	91,089	2.1

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 47.0, an improvement from the EPS of Rs 44.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 609.4, stands at 11.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 9.9 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	591.2	642.8
TTM Earnings per share	Rs	44.9	47.0
Diluted earnings per share	Rs	44.9	47.0
Price to Cash Flow	x	10.5	9.9
TTM P/E ratio	x	11.4	11.4
Price / Book Value ratio	x	17.5	3.1
Market Cap	Rs m	88,558	88,564
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 4.4x 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 22.1% 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 10.1% 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	115	99
Interest coverage	x	4.4	5.3
Debt to equity ratio	x	0.3	0.3
Return on assets	%	10.4	10.1
Return on equity	%	26.9	22.1
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 up from Rs 581.8 to Rs 609.4, registering a gain of Rs 27.6 or around 4.7%.

Overall, the S&P BSE SENSEX is down 2.5% over the year.

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