UPL 2020-21 Annual Report Analysis

Wed, 31 Mar

UPL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

UPL Income Statement Analysis

• Operating income during the year rose 8.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 31.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.0% in FY21 as against 17.2% in FY20.
• Depreciation charges increased by 8.0% and finance costs increased by 25.4% YoY, respectively.
• Other income declined by 2.6% YoY.
• Net profit for the year grew by 58.8% YoY.
• Net profit margins during the year grew from 6.1% in FY20 to 8.9% in FY21.

UPL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	357,560	386,940	8.2%
Other income	Rs m	2,660	2,590	-2.6%
Total Revenues	Rs m	360,220	389,530	8.1%
Gross profit	Rs m	61,500	81,130	31.9%
Depreciation	Rs m	20,120	21,730	8.0%
Interest	Rs m	16,430	20,600	25.4%
Profit before tax	Rs m	27,610	41,390	49.9%
Tax	Rs m	5,860	6,860	17.1%
Profit after tax	Rs m	21,750	34,530	58.8%
Gross profit margin	%	17.2	21.0
Effective tax rate	%	21.2	16.6
Net profit margin	%	6.1	8.9

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

UPL Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 196 billion as compared to Rs 167 billion in FY20, thereby witnessing an increase of 17.6%.
• Long-term debt down at Rs 221 billion as compared to Rs 274 billion during FY20, a fall of 19.1%.
• Current assets rose 3% and stood at Rs 301 billion, while fixed assets fell 1% and stood at Rs 387 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 688 billion as against Rs 684 billion during FY20, thereby witnessing a growth of 0%.

UPL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	192,830	208,860	8.3
Current Liabilities	Rs m	166,850	196,270	17.6
Long-term Debt	Rs m	273,710	221,460	-19.1
Total Liabilities	Rs m	684,300	687,650	0.5
Current assets	Rs m	292,420	300,700	2.8
Fixed Assets	Rs m	391,880	386,950	-1.3
Total Assets	Rs m	684,300	687,650	0.5

UPL Cash Flow Statement Analysis

• UPL 's cash flow from operating activities (CFO) during FY21 stood at Rs 72 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -21 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -67 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -19 billion from the Rs 39 billion net cash flows seen during FY20.

UPL Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	87,390	72,120	-17.5%
Cash Flow from Investing Activities	Rs m	-26,430	-21,010	-
Cash Flow from Financing Activities	Rs m	-21,750	-67,130	-
Net Cash Flow	Rs m	38,980	-19,270	-

Current Valuations for UPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.2, an improvement from the EPS of Rs 28.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 642.2, stands at 14.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.3 times, while the price to sales ratio stands at 1.3 times.
• The company's price to cash flow (P/CF) ratio stood at 6.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	468.0	506.4
TTM Earnings per share	Rs	28.5	45.2
Diluted earnings per share	Rs	28.9	45.9
Price to Cash Flow	x	5.9	6.4
TTM P/E ratio	x	12.7	14.0
Price / Book Value ratio	x	2.5	1.7
Market Cap	Rs m	491,014	362,578
Dividends per share (Unadj.)	Rs	6.0	10.0

Ratio Analysis for UPL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY21, from 1.8x during FY20. 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 3.0x during FY21, from 2.7x during FY20. 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 16.5% during FY21, from 11.3% during FY21. 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 14.4% during FY21, from 9.4% during FY20. 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 8.0% during FY21, from 5.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.8	1.5
Debtors’ Days	Days	12	12
Interest coverage	x	2.7	3.0
Debt to equity ratio	x	1.4	1.1
Return on assets	%	5.6	8.0
Return on equity	%	11.3	16.5
Return on capital employed	%	9.4	14.4

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 326.4 to Rs 642.2, registering a gain of Rs 315.8 or around 96.8%.

Overall, the S&P BSE SENSEX is up 74.1% 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