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HIND UNILEVER 2017-18 Annual Report Analysis
Sat, 31 Mar

HUL 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.

HUL Income Statement Analysis

  • Operating income during the year rose 13.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 13.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 21.4% in FY18 as against 21.4% in FY17.
  • Depreciation charges increased by 20.4% and finance costs decreased by 25.7% YoY, respectively.
  • Other income grew by 4.1% YoY.
  • Net profit for the year grew by 16.4% YoY.
  • Net profit margins during the year grew from 14.6% in FY17 to 15.0% in FY18.

HUL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 306,550 348,570 13.7%
Other income Rs m 3,690 3,840 4.1%
Total Revenues Rs m 310,240 352,410 13.6%
Gross profit Rs m 65,640 74,680 13.8%
Depreciation Rs m 4,320 5,200 20.4%
Interest Rs m 350 260 -25.7%
Profit before tax Rs m 64,660 73,060 13.0%
Tax Rs m 19,760 20,790 5.2%
Profit after tax Rs m 44,900 52,270 16.4%
Gross profit margin % 21.4 21.4
Effective tax rate % 30.6 28.5
Net profit margin % 14.6 15.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Read Now: We're Bullish on 2 Non-Nifty Stocks

HUL Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 89 billion as compared to Rs 77 billion in FY17, thereby witnessing an increase of 15.2%.
  • Current assets rose 15% and stood at Rs 116 billion, while fixed assets rose 10% and stood at Rs 59 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 176 billion as against Rs 155 billion during FY17, thereby witnessing a growth of 13%.

HUL Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 67,150 72,520 8.0
 
Current Liabilities Rs m 77,140 88,870 15.2
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 155,360 175,600 13.0
 
Current assets Rs m 101,510 116,440 14.7
Fixed Assets Rs m 53,850 59,160 9.9
Total Assets Rs m 155,360 175,600 13.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HUL Cash Flow Statement Analysis

  • HUL's cash flow from operating activities (CFO) during FY18 stood at Rs 61 billion, an improvement of 16.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -11 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -50 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 210 million from the Rs -2 billion net cash flows seen during FY17.

HUL 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 51,850 60,590 16.9%
Cash Flow from Investing Activities Rs m -11,730 -10,630 -
Cash Flow from Financing Activities Rs m -42,140 -49,750 -
Net Cash Flow Rs m -2,020 210 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HUL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.1, an improvement from the EPS of Rs 20.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 1,335.9, stands at 59.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 34.5 times, while the price to sales ratio stands at 7.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 43.6 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 141.7 161.0
TTM Earnings per share Rs 20.7 24.1
Diluted earnings per share Rs 19.1 22.2
Price to Cash Flow x 43.4 43.6
TTM P/E ratio x 47.6 59.8
Price / Book Value ratio x 28.0 34.5
Market Cap Rs m 1,879,325 2,504,630
Dividends per share (Unadj.) Rs 17.0 20.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HUL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY18, from 1.3x 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 282.0x during FY18, from 185.7x 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 improved and stood at 72.1% during FY18, from 66.9% 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 improved and stood at 101.1% during FY18, from 96.8% 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 improved and stood at 29.9% during FY18, from 29.1% 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 1.3 1.3
Debtors’ Days Days 1 1
Interest coverage x 185.7 282.0
Debt to equity ratio x 0.0 0.0
Return on assets % 29.1 29.9
Return on equity % 66.9 72.1
Return on capital employed % 96.8 101.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

HUL Share Price Performance

Over the last one year, HUL share price has moved up from Rs 909.8 to Rs 1,335.9, registering a gain of Rs 426.2 or around 46.8%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 10,290.1 (down 0.4%). Over the last one year it has moved up from 9,270.3 to 10,290.1, a gain of 1,020 points (up 11.0%).

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

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

Annual Report FAQs

What is the current share price of HUL?

HUL currently trades at Rs 2,268.3 per share. You can check out the latest share price performance of HUL here...

What was the revenue of HUL in FY18? How does it compare to earlier years?

The revenues of HUL stood at Rs 352,410 m in FY18, which was up 13.6% compared to Rs 310,240 m reported in FY17.

HUL's revenue has grown from Rs 282,609 m in FY14 to Rs 352,410 m in FY18.

Over the past 5 years, the revenue of HUL has grown at a CAGR of 5.7%.

What was the net profit of HUL in FY18? How does it compare to earlier years?

The net profit of HUL stood at Rs 52,270 m in FY18, which was up 16.4% compared to Rs 44,900 m reported in FY17.

This compares to a net profit of Rs 41,600 m in FY16 and a net profit of Rs 43,755 m in FY15.

Over the past 5 years, HUL net profit has grown at a CAGR of 7.2%.

What does the cash flow statement of HUL reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of HUL reveals:

  • Cash flow from operations increased in FY18 and stood at Rs 60,590 m as compared to Rs 51,850 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs -10,630 m as compared to Rs -11,730 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -49,750 m as compared to Rs -42,140 m in FY17.

Here's the cash flow statement of HUL for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations38,18232,91941,71051,85060,590
From Investments-4,7501,380-2,820-11,730-10,630
From Financial Activity-29,603-34,624-38,640-42,140-49,750
Net Cashflow3,829-325250-2,020210

What does the Key Ratio analysis of HUL reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of HUL reveals:

  • Operating profit margins witnessed a fall and down at 21.4% in FY18 as against 21.4% in FY17.
  • Net profit margins grew from 14.6% in FY17 to 15.0% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.0 as compared to 0.0 in FY17.

Here's the ratio/financial analysis of HUL for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)17.920.320.021.421.4
Net Profit Margin (%)14.314.613.914.615.0
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of HINDUSTAN UNILEVER

 

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1 Responses to "HIND UNILEVER 2017-18 Annual Report Analysis"

Zoe

Dec 6, 2020

I want this report to complete my presentation in class.

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