HUL 2020-21 Annual Report Analysis

Wed, 31 Mar

HUL 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.

HUL Income Statement Analysis

• Operating income during the year rose 18.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 24.2% in FY21 as against 24.3% in FY20.
• Depreciation charges increased by 7.2% and finance costs decreased by 0.8% YoY, respectively.
• Other income declined by 35.1% YoY.
• Net profit for the year grew by 18.4% YoY.
• Net profit margins during the year grew from 17.0% in FY20 to 17.0% in FY21.

HUL Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	397,830	470,290	18.2%
Other income	Rs m	6,320	4,100	-35.1%
Total Revenues	Rs m	404,150	474,390	17.4%
Gross profit	Rs m	96,550	113,860	17.9%
Depreciation	Rs m	10,020	10,740	7.2%
Interest	Rs m	1,180	1,170	-0.8%
Profit before tax	Rs m	91,670	106,050	15.7%
Tax	Rs m	24,110	26,060	8.1%
Profit after tax	Rs m	67,560	79,990	18.4%
Gross profit margin	%	24.3	24.2
Effective tax rate	%	26.3	24.6
Net profit margin	%	17.0	17.0

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HUL Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 111 billion as compared to Rs 93 billion in FY20, thereby witnessing an increase of 19.2%.
• Current assets rose 15% and stood at Rs 142 billion, while fixed assets rose 621% and stood at Rs 545 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 687 billion as against Rs 199 billion during FY20, thereby witnessing a growth of 246%.

HUL Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	82,140	476,690	480.3
Current Liabilities	Rs m	93,170	111,030	19.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	198,690	687,410	246.0
Current assets	Rs m	123,030	142,010	15.4
Fixed Assets	Rs m	75,660	545,400	620.9
Total Assets	Rs m	198,690	687,410	246.0

HUL Cash Flow Statement Analysis

• HUL's cash flow from operating activities (CFO) during FY21 stood at Rs 92 billion, an improvement of 20.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -15 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -93 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -14 billion from the Rs 26 billion net cash flows seen during FY20.

HUL 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	76,230	91,630	20.2%
Cash Flow from Investing Activities	Rs m	17,910	-15,280	-
Cash Flow from Financing Activities	Rs m	-68,190	-93,090	-
Net Cash Flow	Rs m	25,950	-13,740	-

Current Valuations for HUL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 34.0, an improvement from the EPS of Rs 31.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,430.8, stands at 71.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.0 times, while the price to sales ratio stands at 12.1 times.
• The company's price to cash flow (P/CF) ratio stood at 58.5 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	183.8	200.2
TTM Earnings per share	Rs	31.2	34.0
Diluted earnings per share	Rs	28.8	34.0
Price to Cash Flow	x	69.6	58.5
TTM P/E ratio	x	80.1	71.4
Price / Book Value ratio	x	52.2	11.1
Market Cap	Rs m	4,287,792	5,305,677
Dividends per share (Unadj.)	Rs	25.0	40.5

Ratio Analysis for HUL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.3x during FY21, from 1.3x 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 91.6x during FY21, from 78.7x 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 declined and down at 16.8% during FY21, from 82.2% 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 declined and down at 22.5% during FY21, from 113.0% 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 declined and down at 11.8% during FY21, from 34.6% 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	1.3	1.3
Debtors’ Days	Days	1	1
Interest coverage	x	78.7	91.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	34.6	11.8
Return on equity	%	82.2	16.8
Return on capital employed	%	113.0	22.5

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 2,298.2 to Rs 2,430.8, registering a gain of Rs 132.7 or around 5.8%.

Meanwhile, the S&P BSE FMCG Index is trading at Rs 12,875.4 (up 1.1%). Over the last one year it has moved up from 10,254.9 to 12,875.4, a gain of 2,621 points (up 25.6%).

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

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

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