UPL 2018-19 Annual Report Analysis

Sun, 31 Mar

UPL 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.

UPL Income Statement Analysis

• Operating income during the year rose 26.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.2% in FY19 as against 19.9% in FY18.
• Depreciation charges increased by 30.5% and finance costs increased by 26.2% YoY, respectively.
• Other income declined by 4.8% YoY.
• Net profit for the year declined by 23.1% YoY.
• Net profit margins during the year declined from 11.8% in FY18 to 7.1% in FY19.

UPL Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	172,500	218,370	26.6%
Other income	Rs m	3,360	3,200	-4.8%
Total Revenues	Rs m	175,860	221,570	26.0%
Gross profit	Rs m	34,350	33,180	-3.4%
Depreciation	Rs m	6,750	8,810	30.5%
Interest	Rs m	7,910	9,980	26.2%
Profit before tax	Rs m	23,050	17,590	-23.7%
Tax	Rs m	2,750	1,980	-28.0%
Profit after tax	Rs m	20,300	15,610	-23.1%
Gross profit margin	%	19.9	15.2
Effective tax rate	%	11.9	11.3
Net profit margin	%	11.8	7.1

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

UPL Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 163 billion as compared to Rs 76 billion in FY18, thereby witnessing an increase of 112.8%.
• Long-term debt stood at Rs 264 billion as compared to Rs 59 billion during FY18, a growth of 349.2%.
• Current assets rose 78% and stood at Rs 267 billion, while fixed assets rose 377% and stood at Rs 357 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 624 billion as against Rs 225 billion during FY18, thereby witnessing a growth of 177%.

UPL Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	91,690	147,150	60.5
Current Liabilities	Rs m	76,420	162,620	112.8
Long-term Debt	Rs m	58,730	263,820	349.2
Total Liabilities	Rs m	225,140	624,350	177.3
Current assets	Rs m	150,240	267,220	77.9
Fixed Assets	Rs m	74,900	357,130	376.8
Total Assets	Rs m	225,140	624,350	177.3

UPL Cash Flow Statement Analysis

• UPL 's cash flow from operating activities (CFO) during FY19 stood at Rs 24 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -309 billion, an improvement of 1,377.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 289 billion, an improvement of 3,707% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -320 million from the Rs -180 million net cash flows seen during FY18.

UPL 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	28,390	23,560	-17.0%
Cash Flow from Investing Activities	Rs m	-20,930	-309,200	-
Cash Flow from Financing Activities	Rs m	-8,010	288,940	-
Net Cash Flow	Rs m	-180	-320	-

Current Valuations for UPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 30.6, an decline from the EPS of Rs 39.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 956.0, stands at 47.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.9 times, while the price to sales ratio stands at 2.2 times.
• The company's price to cash flow (P/CF) ratio stood at 15.6 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	338.7	428.7
TTM Earnings per share	Rs	39.9	30.6
Diluted earnings per share	Rs	27.0	20.8
Price to Cash Flow	x	20.2	15.6
TTM P/E ratio	x	25.6	47.8
Price / Book Value ratio	x	4.4	2.6
Market Cap	Rs m	401,635	381,185
Dividends per share (Unadj.)	Rs	8.0	8.0

Ratio Analysis for UPL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY19, from 2.0x 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 deteriorated and stood at 2.8x during FY19, from 3.9x 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 10.6% during FY19, from 22.1% 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 6.7% during FY19, from 20.6% 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 4.1% during FY19, from 12.5% 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	2.0	1.6
Debtors’ Days	Days	13	20
Interest coverage	x	3.9	2.8
Debt to equity ratio	x	0.6	1.8
Return on assets	%	12.5	4.1
Return on equity	%	22.1	10.6
Return on capital employed	%	20.6	6.7

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

UPL Share Price Performance

Over the last one year, UPL share price has moved up from Rs 728.1 to Rs 956.0, registering a gain of Rs 228.0 or around 31.3%.

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

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

Read: Latest Annual Report Analysis of UPL