Inter Company Analysis
Britannia can be compared with its competitor on the basis of various ratios as mentioned below
Britannia has a current ratio of 1.054 in comparison to HUL which has a current ratio of of 0.79.The high current ratio mainly is because of a more than proportionate increase of the Current Assets when compared to the Current Liabilities.
Debt Equity Ratio
There is a stark comparison between the two companies in terms of funding. While HUL funds its operations from lower and lower loans every year, Britannia increasingly funds its operations through more and more debt, possibly due to lesser cost of debt. This is visible in the DER of HUL at 0.07 and 1.084 of Britannia.
Interest Coverage Ratio
The interest coverage ratio is a measurement of the number of times a company could ...view middle of the document...
51 to Rs 48.77.However in case of HUL the EPS has declined due to slight increase in the number of shares and decrease in the net profits.
PBIT to Sales
The ratio between the profit before interest and taxes (equal to the operating income, in our case) to that of the sales for the given period during which the profit has been earned is a measure of the profitability of the company for that period.
PBIT to Sales ratio has dropped in case of Britannia from 7.53% to 3.6%.The ratio has risen in case of HUL from 13.04 % to 14.4 %.
PAT by Sales
Across companies in the industry, the PAT-Sales ratio has shown a trend that hovers around the same value. For HUL the ratio was pretty close to last years value at 11%.In case of Britannia however there was a decline to 3.35% from 5.58% of last year.
OPEX by Sales
For both the companies the above ratio has marginally improved over the last year. In case of Britannia, the ratio has improved from 0.27 to 0.28 and in case of HUL the ratio has increased from 0.383 to 0.393.
CFO by PAT
Britannia has a much better ratio of CFO by PAT in comparison to that of HUL.In case of Britannia, the value of has improver tremendously from 1.367 of last year to 2.109 this year. In HUL also the ratio has improved from 0.79 of last year to 1.53 this year.
As per ROCE, Britannia’s profitability has declined in comparison to last year from 27.8 % to 14.64% this year due to decline in the PBIT of the company.In case of HUL also there is a decline in this ratio due to slight decline in the PBIT.But comparatively in terms of wealth creation, HUL stands out as a more profitable option.
For both the companies there has been a decline in the value of ROTA over last year. In case of Britannia, the value has almost halved over last year from 18.88% to 9.35% this year. For HUL also there has been a declining trend with the value reducing to 30.0% this year in comparison to 36.6% of last year.