Hindustan Unilever LTD.: Trend Analysis
Hindustan Unilever LTD.: Trend Analysis
Hindustan Unilever LTD.: Trend Analysis
TREND ANALYSIS
INCOME STATEMENT
Particulars 13-Mar 12-Mar 11-Mar 10-Mar
Net Sales/Income from operations
1.463757 1.278575 1.095212 1
Other Operating Income
0.038202 0.024951 0.019875
Total Income From Operations
1.501959 1.303526 1.115087 1
EXPENDITURE
Increase/Decrease in Stocks
1.597052 -5.84459 18.06572 1
Consumption of Raw Materials
1.614657 1.394113 1.14234 1
Employees Cost
1.444443 1.227942 1.039263 1
Depreciation
1.309368 1.216734 1.194592 1
Admin. And Selling Expenses
1.343382 1.10124 1.15683 1
Other Expenses
0.806212 0.714566 0.662065 1
P/L Before Other Inc. , Int., Excpt. Items & Tax
1.521425 1.250546 0.963927 1
Other Income
4.122346 2.011623 1.797381 1
P/L Before Interest, Excpt. Items & Tax
1.644475 1.286553 1.003358 1
Interest
3.443106 0.220884 0.135207 1
P/L Before Exceptional Items & Tax
1.639537 1.289479 1.005742 1
Exceptional Items
P/L Before Tax
1.862189 1.33127 1.005742 1
Tax
1.952534 1.307685 1.035098 1
P/L After Tax from Ordinary Activities
1.835061 1.338352 0.996927 1
Extra Ordinary Item
0 0 3.050981 1
Net Profit/Loss For the Period
1.773701 1.2936 1.06561 1
Equity Share Capital
0.9912 0.990741 0.989824 1
Reserves And Surplus
1.080715 1.413932 1.017403 1
BALANCE SHEET
Particulars 13-Mar 12-Mar 11-Mar 10-Mar
Equity Share Capital
0.9912 0.990741 0.989824 1
Reserves And Surplus
1.080989 1.414205 1.028125 1
ShareHolders Fund
1.073647 1.379581 1.024994 1
Secured Loans
2.358437 0 0 1
Total Debt
2.282288 0 0 1
Minority Interest
1.994264 1.749522 1.393881 1
Total Liabilities
1.061683 1.349508 1.00301 1
Application of Funds
Gross Block
1.143437 1.050308 0.998664 1
(-) Accumulated
Depreciation
1.18835 1.071286 0.969151 1
Net Block / Net Fixed
Assets
1.113894 1.036668 1.018614 1
Capital WIP
0.794414 0.813058 1.032895 1
Investments
1.839516 1.896539 0.970664 1
Current Assets
1.21394 1.114087 1.122887 1
(-) Current Liabilities &
Provisions
1.316984 1.105611 1.089893 1
Total Net Current Assets
1.896608 1.057939 0.904306 1
Total Assets
1.061683 1.349508 1.00301 1
ANALYSIS:
1) Reserve and surplus is constantly increasing which shows that companys
accumulated profit is increasing at a growing rate it shows that company is
making profit.
2) By analysing sources of fund we can state that company is more dependent
on borrowed fund rather than owners fund.
3) Investment is also growing at increasing rate. In the last 4 years it has
increased by 84%.
4) In the last 4 years current asset is increased by 21%.this is due to increase in
cash and bank balance and other current assets.
VERTICAL ANALYSIS
BALANCE SHEET
Particulars 13-Mar 12-Mar 11-Mar 10-Mar
Equity Share Capital
7.430327 5.842871 7.85407 7.958691
Reserves And Surplus
91.00286 93.66245 91.61566 89.37759
ShareHolders Fund
98.43319 99.50532 99.46973 97.33628
Secured Loans
0.850064 0 0 0.382668
Unsecured Loans
0 0 0 0.012768
Total Debt
0.850064 0 0 0.395436
Minority Interest
0.716747 0.494677 0.530272 0.381574
Group Share In Joint Venture
0 0 0 1.88671
Total Liabilities
100 100 100 100
Gross Block
142.8671 103.2419 132.0775 132.6523
Revaluation Reserves
0 0 0 0.024441
(-) Accumulated Depreciation
59.32338 42.07327 51.21093 53.00006
Net Block / Net Fixed Assets
83.54367 61.16863 80.86655 79.62777
Capital WIP
7.642327 6.153464 10.5178 10.21348
Investments
77.39016 62.7716 43.22557 44.666
Current Assets
246.8982 178.262 241.7388 215.9312
(-) Current Liabilities & Provisions
315.4743 208.3557 276.3487 254.3188
Total Net Current Assets
-68.5762 -30.0937 -34.6099 -38.3875
Group Share In Joint Venture1
0 0 0 3.880304
Total Assets
100 100 100 100
INCOME STATEMENT
Particulars
13-Mar 12-Mar 11-Mar 10-Mar
Net Sales/Income from operations
100 100 100 100
Other Operating Income
2.609857 1.951476 1.814685 0
Total Income From Operations
102.6099 101.9515 101.8147 100
Increase/Decrease in Stocks
-0.09879 0.413916 -1.49363 -0.09055
Consumption of Raw Materials
41.75156 41.26989 39.4783 37.84961
Purchase of Traded Goods
11.87537 12.70021 13.67471 0
Employees Cost
5.367906 5.224265 5.161795 5.439681
Depreciation
0.954967 1.015933 1.164439 1.067568
Admin. And Selling Expenses
12.50124 11.73217 14.38778 13.62142
Other Expenses
15.23318 15.45703 16.71909 27.65732
P/L Before Other Inc. , Int., Excpt. Items &
Tax
15.02442 14.13806 12.7222 14.45494
Other Income
2.021609 1.129385 1.17805 0.71783
P/L Before Interest, Excpt. Items & Tax
17.04603 15.26745 13.90024 15.17277
Interest
0.097731 0.007178 0.005129 0.041548
P/L Before Exceptional Items & Tax
16.9483 15.26027 13.89512 15.13122
Exceptional Items
2.301617 0.494568 0 0
P/L Before Tax
19.24992 15.75484 13.89512 15.13122
Tax
4.661067 3.57382 3.30247 3.494264
P/L After Tax from Ordinary Activities
14.58885 12.18102 10.59265 11.63696
Extra Ordinary Item
0 0 1.121476 0.402577
Net Profit/Loss For the Period
14.58885 12.18102 11.71412 12.03954
Equity Share Capital
0.821708 0.940284 1.096693 1.213459
Reserves And Surplus
10.06131 15.07004 12.65922 13.62737
ANALYSIS:
1) If we consider sale as 100% contribution of net profit is more than 11% for
all 4 years. Net profit for all the years remains almost same for the company
so we can say that stability of the company is very good.
2) In year 2013, the contribution of raw material, employees cost and
depreciation was 41.75%, 5.36% and 0.95% respectively. From this we can
say that the depreciation on fixed asset is less compared to all .
3) In 2013, if we consider total source of fund as 100% from this 91% was
reserve and surplus. This contribution of reserve and surplus remains same
for almost every year.
4) We can say that contribution in source of fund was mainly by shareholders
fund which is nearly about 98.43% in 2013.
5) If we consider application of fund as 100% contribution of Investment and
net fixed assets is 77.39% and 83.54% respectively. In 2010 contribution of
net fixed asset was only 79.63% and for that year investment contribution
was 44.66%. so from 2010 to 2013 net fixed asset increased from 79.63%
to 83.54% and investment increased from 44.66% to 77.39%.
RATIO ANALYSIS
Particulars Mar 2013 Mar 2012 Mar 2011 Mar 2010
Operational & Financial Ratios
Earnings Per Share (Rs) 17.56 12.45 10.68 9.64
CEPS(Rs) 18.64 13.46 11.70 10.48
DPS(Rs) 18.50 7.50 6.50 6.50
Book NAV/Share(Rs) 12.19 16.08 12.18 11.82
Margin Ratios
Core EBITDA Margin(%) 14.63 14.19 12.86 13.98
EBIT Margin(%) 18.26 14.97 14.23 14.90
Pre Tax Margin(%) 18.17 14.96 14.23 14.86
PAT Margin (%) 13.92 11.61 11.17 11.54
Cash Profit Margin (%) 14.78 12.55 12.24 12.55
Performance Ratios
ROA(%) 34.43 26.01 24.25 24.62
ROE(%) 124.25 88.14 88.52 90.70
ROCE(%) 161.12 112.47 112.07 107.16
Asset Turnover(x) 2.47 2.24 2.17 2.13
Sales/Fixed Asset(x) 6.87 6.12 5.62 5.64
Working Capital/Sales(x) -317.73 17.24 58.28 -90.55
Efficiency Ratios
Fixed Capital/Sales(x) 0.15 0.16 0.18 0.18
Receivable days 10.12 12.77 14.28 12.10
Inventory Days 33.74 41.94 44.13 47.16
Payable days 69.59 78.25 91.91 99.52
Valuation Parameters
PER(x) 26.55 32.92 26.65 24.77
PCE(x) 25.00 30.45 24.32 22.77
Price/Book(x) 38.25 25.49 23.37 20.19
Yield(%) 3.97 1.83 2.28 2.72
Growth Ratio
Net Sales Growth(%) 16.70 12.06 12.62 -13.42
Core EBITDA Growth(%) 29.14 20.95 1.84 -10.71
EBIT Growth(%) 43.59 18.15 8.22 -11.03
PAT Growth(%) 41.07 16.71 9.67 -15.92
EPS Growth(%) 41.00 16.61 10.80 -15.99
Financial Stability Ratios
Current Ratio(x) 0.99 1.21 1.05 0.97
Quick Ratio(x) 0.66 0.82 0.63 0.65
ANALYSIS:
Current Ratio
Higher current ratio implies healthier short term liquidity comfort level. A current
ratio below 1 indicates that the company may not be able to meet its obligations
in the short run. However, it is not always a matter of worry if this ratio temporarily
falls below 1 as many times companies squeeze out short term cash sources to
achieve a capital intensive plan with a longer term outlook. HULs average
current ratio over the last 5 financial years has been 1.11 times which indicates
that the Company is comfortably placed to pay for its short term obligations.
Long-Term Debt Equity Ratio
Companies operating with high long term debt to equity on their balance sheets
are vulnerable to economic cycles. In times of slowdown in economy, companies
with high levels of debt find it increasingly difficult to service the interest on their
borrowings as profit margins decline. We believe that long term debt to equity
ratio higher than 0.6 - 0.8 could affect the business of a company and its results
of operations.
HULs average long term debt equity ratio over the 5 financial years has been
0.00 times which indicates that the Company operates with close to zero debt
and is placed well to withstand economic slowdowns.
Interest Coverage ratio
Interest coverage ratio indicates the comfort with which the company may be able
to service the interest expense (i.e. finance charges) on its outstanding debt.
Higher interest coverage ratio indicates that the company can easily meet the
interest expense pertaining to its debt obligations. In our view, interest coverage
ratio of below 1.5 should raise doubts about the companys ability to meet the
expenses on its borrowings. Interest coverage ratio below 1 indicates that the
company is just not generating enough to service its debt obligations.
HULs average interest coverage ratio over the last 5 financial years has been
1,094.36 times which indicates that the Company can meet its debt obligations
without any difficulty.
DU PONT ANALYSIS
Du Pont analysis tell us that ROE is affected by three things:
1) Operating efficiency, this is measured by profit margin.
2) Asset Use efficiency, this is measured by total asset turnover.
3) Financial Leverage, this is measured by the equity multiplier.
Particulars Mar 2013 Mar 2012 Mar 2011 Mar 2010
ROA(%) 34.43 26.01 24.25 24.62
ROE(%) 124.25 88.14 88.52 90.70
ROCE(%) 161.12 112.47 112.07 107.16
The return on capital employed is another measure of the returns that the business
generates. This is expressed as the ratio between the profit before interest and tax
to the capital employed in the business. The return on capital employed (ROCE) is
increased to 161.12% from 112.47% which signifies that the company is getting
good return out of its investment decisions.
The return on total asset is yet another method of calculating the return of the
company. This is calculated by taking the ratio between profit before interest and tax
to the total asset of the company. Earning power of the company i.e. 34.43 is quiet
good and company is doing well.