HINDALCO 2023-24 Annual Report Analysis

Wed, 31 Jul

HINDALCO has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

HINDALCO Income Statement Analysis

• Operating income during the year fell 3.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 10.8% in FY24 as against 10.2% in FY23.
• Depreciation charges increased by 6.1% and finance costs increased by 5.8% YoY, respectively.
• Other income grew by 53.0% YoY.
• Net profit for the year grew by 0.6% YoY.
• Net profit margins during the year grew from 4.5% in FY23 to 4.7% in FY24.

HINDALCO Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	2,232,020	2,159,620	-3.2%
Other income	Rs m	12,980	19,860	53.0%
Total Revenues	Rs m	2,245,000	2,179,480	-2.9%
Gross profit	Rs m	226,750	234,050	3.2%
Depreciation	Rs m	70,860	75,210	6.1%
Interest	Rs m	36,460	38,580	5.8%
Profit before tax	Rs m	132,410	140,120	5.8%
Tax	Rs m	31,440	38,570	22.7%
Profit after tax	Rs m	100,970	101,550	0.6%
Gross profit margin	%	10.2	10.8
Effective tax rate	%	23.7	27.5
Net profit margin	%	4.5	4.7

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HINDALCO Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 594 billion as compared to Rs 605 billion in FY23, thereby witnessing an decrease of -1.8%.
• Long-term debt down at Rs 474 billion as compared to Rs 514 billion during FY23, a fall of 7.9%.
• Current assets fell 8% and stood at Rs 823 billion, while fixed assets rose 11% and stood at Rs 1,484 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 2,307 billion as against Rs 2,235 billion during FY23, thereby witnessing a growth of 3%.

HINDALCO Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	950,040	1,063,860	12.0
Current Liabilities	Rs m	604,580	593,510	-1.8
Long-term Debt	Rs m	514,340	473,950	-7.9
Total Liabilities	Rs m	2,234,890	2,307,230	3.2
Current assets	Rs m	892,600	822,990	-7.8
Fixed Assets	Rs m	1,341,780	1,483,800	10.6
Total Assets	Rs m	2,234,890	2,307,230	3.2

HINDALCO Cash Flow Statement Analysis

• HINDALCO's cash flow from operating activities (CFO) during FY24 stood at Rs 241 billion, an improvement of 25.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -143 billion, an improvement of 78.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -108 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -10 billion from the Rs 12 billion net cash flows seen during FY23.

HINDALCO Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	192,080	240,560	25.2%
Cash Flow from Investing Activities	Rs m	-80,160	-142,760	-
Cash Flow from Financing Activities	Rs m	-104,500	-108,170	-
Net Cash Flow	Rs m	11,990	-10,280	-

Current Valuations for HINDALCO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 45.7, an improvement from the EPS of Rs 45.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 670.7, stands at 14.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.4 times, while the price to sales ratio stands at 0.7 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-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	1,004.4	972.3
TTM Earnings per share	Rs	45.4	45.7
Diluted earnings per share	Rs	44.9	45.2
Price to Cash Flow	x	5.3	6.4
TTM P/E ratio	x	9.0	14.8
Price / Book Value ratio	x	1.1	1.1
Market Cap	Rs m	1,004,437	1,127,299
Dividends per share (Unadj.)	Rs	3.0	3.5

Ratio Analysis for HINDALCO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY24, from 1.5x during FY23. 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 4.6x during FY24, from 4.6x during FY23. 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 9.5% during FY24, from 10.6% during FY24. 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 11.6% during FY24, from 11.5% during FY23. 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 6.1% during FY24, from 6.1% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.5	1.4
Debtors’ Days	Days	3	3
Interest coverage	x	4.6	4.6
Debt to equity ratio	x	0.5	0.4
Return on assets	%	6.1	6.1
Return on equity	%	10.6	9.5
Return on capital employed	%	11.5	11.6

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

HINDALCO Share Price Performance

Over the last one year, HINDALCO share price has moved up from Rs 462.5 to Rs 670.7, registering a gain of Rs 208.3 or around 45.0%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 32,698.4 (up 0.9%). Over the last one year it has moved up from 22,180.7 to 32,698.4, a gain of 10,518 points (up 47.4%).

Overall, the S&P BSE SENSEX is up 22.8% over the year.

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