UPL 2017-18 Annual Report Analysis

Sat, 31 Mar

UPL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

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 18.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.9% in FY18 as against 18.2% in FY17.
• Depreciation charges increased by 0.4% and finance costs increased by 1.2% YoY, respectively.
• Other income declined by 32.1% YoY.
• Net profit for the year grew by 15.9% YoY.
• Net profit margins during the year grew from 11.0% in FY17 to 11.8% in FY18.

UPL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	159,440	172,500	8.2%
Other income	Rs m	4,950	3,360	-32.1%
Total Revenues	Rs m	164,390	175,860	7.0%
Gross profit	Rs m	29,000	34,350	18.4%
Depreciation	Rs m	6,720	6,750	0.4%
Interest	Rs m	7,820	7,910	1.2%
Profit before tax	Rs m	19,410	23,050	18.8%
Tax	Rs m	1,890	2,750	45.5%
Profit after tax	Rs m	17,520	20,300	15.9%
Gross profit margin	%	18.2	19.9
Effective tax rate	%	9.7	11.9
Net profit margin	%	11.0	11.8

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UPL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 76 billion as compared to Rs 70 billion in FY17, thereby witnessing an increase of 8.7%.
• Long-term debt stood at Rs 59 billion as compared to Rs 54 billion during FY17, a growth of 9.8%.
• Current assets rose 10% and stood at Rs 150 billion, while fixed assets rose 25% and stood at Rs 75 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 225 billion as against Rs 197 billion during FY17, thereby witnessing a growth of 14%.

UPL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	73,950	91,690	24.0
Current Liabilities	Rs m	70,280	76,420	8.7
Long-term Debt	Rs m	53,500	58,730	9.8
Total Liabilities	Rs m	197,110	225,140	14.2
Current assets	Rs m	136,980	150,240	9.7
Fixed Assets	Rs m	60,130	74,900	24.6
Total Assets	Rs m	197,110	225,140	14.2

UPL Cash Flow Statement Analysis

• UPL 's cash flow from operating activities (CFO) during FY18 stood at Rs 28 billion, an improvement of 9.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -21 billion, an improvement of 109.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -8 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -180 million from the Rs 17 billion net cash flows seen during FY17.

UPL Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	25,850	28,390	9.8%
Cash Flow from Investing Activities	Rs m	-9,990	-20,930	-
Cash Flow from Financing Activities	Rs m	1,400	-8,010	-
Net Cash Flow	Rs m	17,030	-180	-

Current Valuations for UPL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 39.9, an improvement from the EPS of Rs 34.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 728.1, stands at 25.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.0 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 14.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	314.5	338.7
TTM Earnings per share	Rs	34.5	39.9
Diluted earnings per share	Rs	23.2	26.9
Price to Cash Flow	x	22.6	14.8
TTM P/E ratio	x	30.4	25.6
Price / Book Value ratio	x	4.1	4.4
Market Cap	Rs m	305,148	401,635
Dividends per share (Unadj.)	Rs	7.0	8.0

Ratio Analysis for UPL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.0x during FY18, from 1.9x during FY17. 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 3.9x during FY18, from 3.5x during FY17. 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 FY18, from 23.7% during FY18. 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 20.6% during FY18, from 21.4% during FY17. 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 12.5% during FY18, from 12.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	1.9	2.0
Debtors’ Days	Days	13	13
Interest coverage	x	3.5	3.9
Debt to equity ratio	x	0.7	0.6
Return on assets	%	12.9	12.5
Return on equity	%	23.7	22.1
Return on capital employed	%	21.4	20.6

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 725.9 to Rs 728.1, registering a gain of Rs 2.2 or around 0.3%.

Overall, the S&P BSE SENSEX is up 12.1% 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