HUL 2018-19 Annual Report Analysis

Sun, 31 Mar

HUL has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

HUL Income Statement Analysis

• Operating income during the year rose 12.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 15.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.0% in FY19 as against 21.4% in FY18.
• Depreciation charges increased by 8.7% and finance costs increased by 26.9% YoY, respectively.
• Other income grew by 43.2% YoY.
• Net profit for the year grew by 15.9% YoY.
• Net profit margins during the year grew from 15.0% in FY18 to 15.4% in FY19.

HUL Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	348,570	393,110	12.8%
Other income	Rs m	3,840	5,500	43.2%
Total Revenues	Rs m	352,410	398,610	13.1%
Gross profit	Rs m	74,680	86,520	15.9%
Depreciation	Rs m	5,200	5,650	8.7%
Interest	Rs m	260	330	26.9%
Profit before tax	Rs m	73,060	86,040	17.8%
Tax	Rs m	20,790	25,440	22.4%
Profit after tax	Rs m	52,270	60,600	15.9%
Gross profit margin	%	21.4	22.0
Effective tax rate	%	28.5	29.6
Net profit margin	%	15.0	15.4

Don't Miss: Key Information for Long-term Investors

HUL Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 87 billion as compared to Rs 89 billion in FY18, thereby witnessing an decrease of -2.5%.
• Current assets rose 2% and stood at Rs 119 billion, while fixed assets rose 7% and stood at Rs 63 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 183 billion as against Rs 176 billion during FY18, thereby witnessing a growth of 4%.

HUL Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	72,520	78,430	8.1
Current Liabilities	Rs m	88,870	86,670	-2.5
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	175,600	182,560	4.0
Current assets	Rs m	116,440	119,100	2.3
Fixed Assets	Rs m	59,160	63,460	7.3
Total Assets	Rs m	175,600	182,560	4.0

HUL Cash Flow Statement Analysis

• HUL's cash flow from operating activities (CFO) during FY19 stood at Rs 58 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -4 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -54 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -280 million from the Rs 210 million net cash flows seen during FY18.

HUL Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	60,590	58,000	-4.3%
Cash Flow from Investing Activities	Rs m	-10,630	-4,380	-
Cash Flow from Financing Activities	Rs m	-49,750	-53,900	-
Net Cash Flow	Rs m	210	-280	-

Current Valuations for HUL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.0, an improvement from the EPS of Rs 24.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,707.8, stands at 66.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 51.2 times, while the price to sales ratio stands at 9.4 times.
• The company's price to cash flow (P/CF) ratio stood at 52.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	161.0	181.6
TTM Earnings per share	Rs	24.1	28.0
Diluted earnings per share	Rs	22.2	25.8
Price to Cash Flow	x	54.6	52.2
TTM P/E ratio	x	59.8	66.5
Price / Book Value ratio	x	34.5	44.1
Market Cap	Rs m	2,504,630	3,454,976
Dividends per share (Unadj.)	Rs	20.0	22.0

Ratio Analysis for HUL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY19, from 1.3x during FY18. 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 deteriorated and stood at 261.7x during FY19, from 282.0x during FY18. 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 77.3% during FY19, from 72.1% during FY19. 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 110.1% during FY19, from 101.1% during FY18. 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 33.4% during FY19, from 29.9% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.3	1.4
Debtors’ Days	Days	1	2
Interest coverage	x	282.0	261.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	29.9	33.4
Return on equity	%	72.1	77.3
Return on capital employed	%	101.1	110.1

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 1,335.9 to Rs 1,707.8, registering a gain of Rs 371.9 or around 27.8%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 11,741.5 (down 0.1%). Over the last one year it has moved up from 10,290.1 to 11,741.5, a gain of 1,451 points (up 14.1%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

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