UPL 2019-20 Annual Report Analysis

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UPL 2019-20 Annual Report Analysis
Tue, 29 Dec

UPL has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

UPL Income Statement Analysis

  • Operating income during the year rose 63.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 63.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.5% in FY20 as against 17.5% in FY19.
  • Depreciation charges increased by 52.8% and finance costs increased by 53.8% YoY, respectively.
  • Other income declined by 56.7% YoY.
  • Net profit for the year grew by 43.4% YoY.
  • Net profit margins during the year declined from 6.9% in FY19 to 6.1% in FY20.

UPL Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 218,370 357,560 63.7%
Other income Rs m 2,400 1,040 -56.7%
Total Revenues Rs m 220,770 358,600 62.4%
Gross profit Rs m 38,130 62,420 63.7%
Depreciation Rs m 9,690 14,810 52.8%
Interest Rs m 9,630 14,810 53.8%
Profit before tax Rs m 21,210 33,840 59.5%
Tax Rs m 1,650 5,860 255.2%
Profit after tax Rs m 15,190 21,780 43.4%
Gross profit margin % 17.5 17.5
Effective tax rate % 7.8 17.3
Net profit margin % 6.9 6.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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UPL Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 167 billion as compared to Rs 163 billion in FY19, thereby witnessing an increase of 2.6%.
  • Long-term debt stood at Rs 274 billion as compared to Rs 264 billion during FY19, a growth of 3.7%.
  • Current assets rose 8% and stood at Rs 292 billion, while fixed assets rose 11% and stood at Rs 378 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 701 billion as against Rs 632 billion during FY19, thereby witnessing a growth of 11%.

UPL Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 146,450 162,960 11.3
 
Current Liabilities Rs m 162,610 166,860 2.6
Long-term Debt Rs m 263,830 273,710 3.7
Total Liabilities Rs m 631,660 700,830 11.0
 
Current assets Rs m 269,660 291,900 8.2
Fixed Assets Rs m 340,920 377,540 10.7
Total Assets Rs m 631,660 700,830 11.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



UPL Cash Flow Statement Analysis

  • UPL 's cash flow from operating activities (CFO) during FY20 stood at Rs 87 billion, an improvement of 270.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs -26 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -22 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 39 billion from the Rs -320 million net cash flows seen during FY19.

UPL Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 23,560 87,390 270.9%
Cash Flow from Investing Activities Rs m -309,200 -26,430 -
Cash Flow from Financing Activities Rs m 288,940 -21,750 -
Net Cash Flow Rs m -320 38,980 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for UPL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.5, an decline from the EPS of Rs 29.8 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 452.4, stands at 12.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.0 times, while the price to sales ratio stands at 1.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 9.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 428.7 468.0
TTM Earnings per share Rs 29.8 28.5
Diluted earnings per share Rs 19.9 28.5
Price to Cash Flow x 9.3 9.5
TTM P/E ratio x 8.2 12.3
Price / Book Value ratio x 2.6 3.0
Market Cap Rs m 230,395 345,605
Dividends per share (Unadj.) Rs 8.0 6.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for UPL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.7x during FY20, from 1.7x during FY19. 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 3.3x during FY20, from 3.2x during FY19. 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 13.4% during FY20, from 10.4% during FY20. 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 9.7% during FY20, from 6.5% during FY19. 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 5.2% during FY20, from 3.9% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 1.7 1.7
Debtors’ Days Days 195 121
Interest coverage x 3.2 3.3
Debt to equity ratio x 1.8 1.7
Return on assets % 3.9 5.2
Return on equity % 10.4 13.4
Return on capital employed % 6.5 9.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 down from Rs 580.4 to Rs 452.4, registering a loss of Rs 128.0 or around 22.1%.

Overall, the S&P BSE SENSEX is up 14.7% over the year.

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

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