Corporate Finance Assignment

Financial Analysis
Company- Hindustan Unilever Ltd.
Submitted By- Tanya Aggarwal, C049, 80012100798

Asset Turnover Ratio 1.19

Currently, the asset turnover ratio for the company is 1.19,
Inventory Turnover Ratio 13.14
which is lower than the previous year but this figure has
Payable Days 87.36 been almost constant in the recent financial years.
Receivable Days 10.07 The inventory turnover ratio witnessed a continuous rise
Inventory Days 21.99 from FY16 to FY19, which later dipped in FY20 due to virus
outbreak disruptions and further dropped in 2021.
The company’s receivable days is very less when compared
Asset Turnover Ratio (%)
with days payable which means that it is able to recover
250.00%
200.00%
cash from its customers quickly in comparison to days
150.00% payable. Inventory days is on the lower side which indicates
100.00%
that HUL is more efficiently and frequently selling off its
50.00%
0.00% inventory which potentially means higher profits.
2017 2018 2019 2020 2021

InventoryTurnover Ratio
15.50%
15.00%
14.50%
14.00%
13.50%
13.00%
12.50%
12.00%
11.50%
2017 2018 2019 2020 2021
 Hindustan Unilever Ltd revenues increased 12% to RS.
386.79B. Net income before extraordinary items increased
13% to RS. 65.72B. Revenues reflect Home Care segment
increase of 17% to RS. 118.27B, Beauty & personal care
segment increase of 10% to RS. 148.24B. Net income
benefited from Exceptional items (net) decrease of 61% to
RS990M (expense), Finance costs decrease of 36% to RS.
680M (expense).
Total Revenue Net Income

INTRINSIC VALUE Book Value Rs. 202.99

The intrinsic value of HUL is Rs. 1,135.76. It is overvalued Market Price RS. 2,065.30
based on the estimates of intrinsic value and hence may
Intrinsic Value RS. 1135.76
not be a good buying opportunity according to share
valuation at this time. Market Capitalization Rs. 485,190 Cr.
HUL is trading at a premium of 81% based on the estimates
of median intrinsic value. Price Earnings Ratio 71.45
PE RATIO
The P/E ratio of the company is 55.24 which is above the Earnings per Share 34.03
industry average i.e., 54.17. The pe ratio of HUL shows that
Debt to equity ratio 0.0
the market is willing to pay 55.24 for every Rs. 1 profit of
the company. Since the P/E ratio of HUL is on the higher
side, it can be said that the stock’s price is high when
compared to earnings and that it may be overvalued.
Shareholding Pattern
DEBT TO EQUITY RATIO
Debt to equity ratio of the company is 0 which means that
the company has no borrowings and thus the cost of capital 12.54
would be high.
BOOK VALUE
10.87
Book value of HUL is Rs. 202.99 so in case the company
gets liquidated today, the shareholders will receive Rs.
202.99 per share.
14.71
DIVIDEND PAYOUT RATIO 61.9

For the year ended March 2021, HUL has declared dividend
of 4,050% on its face value, which amounts to Rs 40.50 per
share. At the current price of Rs 2,065.30, this results to a
dividend yield of 1.97%. In the year ago period, the company
had paid dividend of Rs 25.00 per share.
Promoters FII DII Public