Complete Financial Analysis Report and Solution of Hindustan Unilever Limited Fiscal Year 2017-18.

1. ACCOUNTS
PROJECT
PRESENTATION
(Group 3 )

2. TEAM MEMBERS
Manisha Baisla (630)
Aakshit Nangalia (591)
Shubham Verma (628)
Shweta Baisla (556)
Tushar Swami (609)
Purnima Varun (535)

3. Financial Analysis
2016-2017

4. Harish Manwani (Chairman)

5. Overview of HUL
HUL is the India’s largest Fastest moving Consumer Goods Company with a heritage of over 80 years in India.
With over 35 brands spanning in 20 distinct categories such as soaps, skin care, coffee, tea etc, the company is the part of the
everyday life of millions of consumers across India.
The company has about 18,000 employees and has Net Sales INR 33,895 Cr (FY 16-17).
HUL is the subsidiary of Unilever, one of the world’s leading supplier of Food, Home Care and Refreshment products with
Sales in over 190 countries and an annual sales turnover of € 52.7 Billion in 2016. Unilever has over 67% shareholding in HUL.
HUL’s headquarters are located in Andheri (E) Mumbai. The campus is spread over 12.5 acres of land and houses over 1,600
employees.

6. Overview of HUL

7. Financial Performance of HUL

8. Comparative Balance Sheet of HUL as on 31st March 2016 & 2017

9. Comparative Balance Sheet of HUL as on 31st March 2016 & 2017

10. Common Size Balance Sheet of HUL as on 31st March 2013-2017

11. Common Size Balance Sheet of HUL as on 31st March 2013-2017

12. Common Size Balance Sheet of HUL as on 31st March 2013-2017

13. Key Ratios and Economic Value Added of HUL

14. Financial Ratio Analysis of HUL as on 31st March 2013-2017

15. Financial Ratio Analysis of HUL as on 31st March 2013-2017

16. Statement of
Profit & Loss

18. Other Financial Information of HUL

21. PERFORMANCE TRENDS

22. Share Price
Data of HUL
for the year
2016-2017

23. Trend Analysis of
HUL
from 2012-2013
to 2016-17

24. Total Revenue for the years ending 2013 – 2017

25. Gross Sales for the years ending 2013 – 2017

26. Profit before Interest & Tax (PBIT)for the years ending 2013 – 2017

27. Profit for the years ending 2013 - 2017

28. Income Statement values for the years ending
2013 - 2017

29. Income Statement values for the years ending 2013 - 2017

30. Reserves & Surplus as on 31st March 2013 - 2017

31. Fixed Assets as on 31st March 2013 - 2017

32. Share Capital as on 31st March 2013 - 2017

33. Share indicators as on 31st March 2013 - 2017

34. Balance Sheet values as on 31st March 2013 - 2017

35. Balance Sheet values for the years ending 2013 - 2017

36. Statement of
Cashflow

37. Cashflow of
Operating
Activities

39. Cash flow from Financing Activity

40. Statement of
Changes in
Equity
For the year ended
31st March, 2017

41. Financial Competitive Analysis

42. HUL vs Dabur

43. • A ratio used to compare a stock's market
value to its book value; it is calculated by
dividing the market price of share by the book
value per share.
• P/BV ratio of Dabur is 13.63 and it is
decreasing but for HUL, it is 40.79 and
increasing. So, we can say that Dabur share is
under-valued as compared to HUL. This ratio
for Dabur is not too low to get tense about
returns from investment
• The earnings per share is a good measure of
profitability and when compared with EPS of
similar companies, it gives a view of the
comparative earnings or earnings power of
the firm.
• EPS has been increasing for both the
companies but Dabur is at a better position
since the percentage increase in EPS.
10.2
11.84 12.29
13.5
14.64
8.72
9.86 9.34 8.83 7.93
0
5
10
15
20
2014 2015 2016 2017 2018
P/BV Ratio
HUL Dabur

44. • The ratio is decreasing for both the
companies but for Hul, it is decreasing
at a higher rate as compared to Dabur,
but, the absolute value for HUL is
higher. So, HUL is more efficient of the
two.
• It is the amount of net income as a
percentage of shareholders equity.
• ROE for both the companies are decreasing
but for HUL the absolute value is much higher
as compared to Dabur. Hence, of the two,
HUL is a better option.
10.2
11.84 12.29
13.5
14.64
8.72
9.86 9.34 8.83
7.93
2014 2015 2016 2017 2018
HUL Dabur
10.2
11.84 12.29
13.5
14.64
8.72
9.86 9.34 8.83
7.93
2014 2015 2016 2017 2018
HUL Dabur

45. • ROCE measures a corporation's profitability
by revealing how much profit a company
generates with respect to the total
investment made. So higher the ROCE, better
is the performance of the company
• ROCE has been decreasing for both the
companies but the absolute value of ROCE for
HUL is more than 3.5 times than Dabur, which
shows that HUL is performing much better
and hence, it is a better option.
10.2
11.84 12.29
13.5
14.64
8.72
9.86
9.34
8.83
7.93
0
2
4
6
8
10
12
14
16
2014 2015 2016 2017 2018
ROCE
HUL Dabur

46. • The higher the current ratio, the more
capable the company is of paying its
obligations. A ratio under 1 suggests that the
company would be unable to pay off its
obligations if they came due at that point.
• When we compare the ratios for both the
companies, HUL has a lower current ratio as
compared to Dabur. The current ratio for HUL
is decreasing as well unlike Dabur. This means
that Dabur is a better company in paying off
its obligations
• High value of this ratio indicates that a lot of
inventory is either being sold or there is
ineffective buying because of low prices. Low
value indicates high inventory which is not good.
It shows that sales are not happening.
• Inventory turnover ratio of Dabur is low and
decreasing from 2015 but for HUL, it is increasing
which shows that HUL is more efficient in utilising
inventory.
10.2
11.84 12.29
13.5
14.64
8.72
9.86
9.34
8.83
7.93
0
2
4
6
8
10
12
14
16
2014 2015 2016 2017 2018
Current Ratio
HUL Dabur
10.2
11.84 12.29
13.5
14.64
8.72
9.86
9.34
8.83
7.93
0
2
4
6
8
10
12
14
16
2014 2015 2016 2017 2018
Inventory turnover Ratio
HUL Dabur

47. HUL Competitors

48. Balance Sheet Analysis

49. Profit and Loss Account Analysis

51. Cash Flow Analysis

52. FMCG Industry
Analysis for the
year 2017

53. India’s
FMCG
Industry at a
glance
India’s FMCG Market size in 2017 is 51.4 billion $
Rural FMCG Market size in 2017 is 29.7 billion $
FMCG market in India is expected to grow at a
CAGR of 20.6 per cent and is expected to reach
103.7 billion $ by 2020.
FMCG Sector’s Contribution to India’s GDP in
2017 is 3.1

54. Industry Ratios
Current Ratio
• The Current Ratio for HUL is 1.31 : 1
• The Industry average is 1.90 : 1
• Although HUL’s current ratio is below the industry average, it's still deemed acceptable. It means
other businesses within the same industry, on average, have a greater ability to use their current
assets to pay short term debt.
Quick Ratio
• The Quick Ratio for HUL is 0.98 : 1
• The Industry average is 1.19 : 1
• Therefore HUL’s quick ratio is below the Industry Average
• It means that HUL has a relatively lower liquidity position than other businesses within the same
industry.
• Other businesses within the same industry, on average, have a greater ability to use their current
assets (excluding inventory) to pay or meet their short-term debt.

55. Industry Ratios
Debt Equity Ratio
• The Debt Equity Ratio for HUL is 0.16 : 1
• The Industry average is 0.46 : 1
• Therefore HUL’s debt equity ratio is below the Industry Average.
• This indicates that HUL does not heavily rely on its creditors to finance its operations whereas
other businesses in the same industry do.
Stock Turnover
• The Stock Turnover for HUL is 13.86 times
• The Industry average is 8.49 times
• Therefore HUL’s stock turnover is above the Industry Average.
• HUL’s high stock turnover ratio implies either strong sales and/or large discounts.

56. Market Breakup
• The FMCG sector has grown
from
US $ 31.6 billion (2011)
US $ 49 billion (2016).
• The sector is further expected
to grow at a Compound
Annual Growth Rate (CAGR)
of 20.6 per cent to reach
US $ 103.7 billion by 2020.
• In 2016-17, revenue for FMCG
sector have reached
US $ 49 billion and is expected
to grow at 9-9.5 per cent in
FY18 supported by
expectations of the total
consumption expenditure
reaching nearly US $ 3,600
billion by 2020.

57. From the figure Haircare is the
leading segment.
Food products is the second
leading segment of the sector
followed by the Health
Supplements and Oral Care.

58. COMPOUND ANNUAL GROWTH RATE
(CAGR) in FMCG Sector over the years:
The FMCG sector in India generated
revenues worth US$ 49 billion in 2016.
Over 2007- 2016, the FMCG Sector
posted a CAGR of 11.9% in revenues. In
2016-17, revenues for FMCG sector
have reached US$ 49 billion and are
expected to grow at 9-9.5% in FY2018.
According to the report of IBEF (India
Brand Equity Foundation), in the long
run, with the system becoming more
transparent and easily compliable,
Demonetization is expected to benefit
organized players in the FMCG Industry.

59. Conclusion
This sector will continue to see growth as it depends on an ever-
increasing internal market for consumption, and demand for
these goods remains more or less constant, irrespective of
recession or inflation.
Availability of key raw materials, cheaper labor costs and
presence across the entire value chain gives Indian FMCG
industry a competitive advantage.
Penetration level as well as per capita consumption in most
product categories like jams, toothpaste, skin care, hair wash etc.
in India is low, indicating the untapped market potential.
Increasing Indian population, particularly the middle class and
the rural segments, presents an opportunity to makers of
branded products to convert consumers to branded products.