Biocon has announced its 4QFY17 results. The company has reported 2.7% YoY decline in net sales and net profits of Rs 1.27 billion for the quarter. Here is our analysis of the results.
Performance summary
- Net Sales declined by 61.7% YoY during the quarter, due to exceptional items worth 2.6 billion recorded in the previous year. On a year on year basis, Biocon's Branded Formulations business witnessed growth of 25%. This was due to accounting standards adopted from April last year. On a like-to-like basis, the segment growth was flat.
- Operating margins declined slightly by 130 basis points for the quarter, largely on the back of forex losses. Biocon booked a forex loss of 170 million excluding which operating margins were similar to last year.
- Net profits reported for the quarter were Rs 1.27 billion versus Rs 3.3 billion in 4QFY16. This largely pertains to exceptional income worth 2.6 billion recorded in 4QFY16.
- Tax rate appears lower due to recognition of deferred tax and MAT credit entitlement for the whole year in this quarter.
Financial performance: A snapshot
(Rs m) |
4QFY16 |
4QFY17 |
Change |
FY16 |
FY17 |
Change |
Net sales |
9,567 |
9,311 |
-2.7% |
33,810 |
39,216 |
16.0% |
Other operating income |
0 |
0 |
|
0 |
0 |
|
Expenditure |
7,521 |
7,436 |
-1.1% |
26,132 |
29,421 |
12.6% |
Operating profit (EBDITA) |
2,046 |
1,875 |
-8.4% |
7,678 |
9,795 |
27.6% |
EBDITA margin (%) |
21.4% |
20.1% |
|
22.7% |
25.0% |
|
Other income |
160.0 |
432.0 |
170.0% |
792 |
1,571 |
98.4% |
Interest (net) |
205.0 |
50.0 |
-75.6% |
293 |
260 |
-11.3% |
Depreciation |
648.0 |
725.0 |
11.9% |
2,487 |
2,772 |
11.5% |
Profit before tax |
1,353 |
1,532 |
13.2% |
5,690 |
8,334 |
46.5% |
Share of Profit of Joint Venture |
53 |
55 |
|
217 |
163 |
|
Exceptional Items |
2,684 |
0 |
|
1,606 |
0 |
|
Tax |
546 |
103 |
-81.1% |
1,422 |
1,616 |
13.6% |
Minority Interest |
214 |
209 |
|
587 |
760 |
|
Profit after tax/(loss) |
3,330 |
1,275 |
-61.7% |
5,504 |
6,121 |
11.2% |
Net profit margin (%) |
34.8% |
13.7% |
|
16.3% |
15.6% |
|
No. of shares (m) |
600 |
600 |
|
600 |
600 |
|
Diluted earnings per share (Rs) |
|
|
|
9.2 |
10.2 |
|
Price to earnings ratio (x)* |
|
|
|
|
32.5 |
|
*based on trailing 12 months earnings
Business Mix |
4QFY16 |
4QFY17 |
Change |
FY16 |
FY17 |
Change |
Biopharmaceuticals |
5,587 |
5,581 |
-0.1% |
19,879 |
23,423 |
17.8% |
(% of consolidated revenues) |
58% |
60% |
|
59% |
60% |
|
Branded Formulations |
1,049 |
1,310 |
24.9% |
4,409 |
5,489 |
24.5% |
(% of consolidated revenues) |
11% |
14% |
|
13% |
14% |
|
Contract Manufacturing |
3,315 |
2,828 |
-14.7% |
11,070 |
11,925 |
7.7% |
(% of consolidated revenues) |
35% |
30% |
|
33% |
30% |
|
Less: Inter-segment Revenue |
384 |
408 |
|
1,548 |
1,621 |
|
Total |
9,567 |
9,311 |
-2.7% |
33,810 |
39,216 |
16.0% |