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Alkem Ltd: Good quarter - Views on News from Equitymaster
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Alkem Ltd: Good quarter
Jul 21, 2016

Alkem has announced its 4QFY16 and full year results. The company has reported 24.4% YoY growth in net sales and a decline of 56.9% YoY in the net profits for the quarter. Here is our analysis of the results.

Performance summary
  • Net sales grow by 24.4% YoY during the quarter, backed by domestic and international segments.
  • Operating margins fall by 1%, thereby restricting the operating profit growth to 17.4% YoY for the quarter.
  • Net profits are down 56.9% YoY owing large tax outflows during the quarter.

    Financial performance: A snapshot
    (Rs m) 4QFY15 4QFY16 Change FY15 FY16 Change
    Net sales 8,934 11,110 24.4% 36,615 48,768 33.2%
    Other operating income 186 316 70.1% 818 1,147
    Expenditure 7,773 9,845 26.7% 33,215 41,433 24.7%
    Operating profit (EBDITA) 1,347 1,580 17.4% 4,217 8,482 101.1%
    EBDITA margin (%) 14.8% 13.8% 11.3% 17.0%
    Other income 505 426 -15.7% 1,810 1,645 -9.1%
    Interest (net) 166 107 811 671 -17.3%
    Depreciation 181 260 43.6% 709 1,005 41.7%
    Profit before tax 1,504 1,639 8.9% 4,507 8,451 87.5%
    Exceptional Item 0 0 0 0
    Tax 189 1,066 464.5% 592 1,607 171.2%
    Profit after tax/(loss) 1,315 573 -56.4% 3,915 6,845 74.8%
    Minority Interest 0 6 0 114
    Net profit after minority int 1,315 567 -56.9% 3,915 6,731 71.9%
    Net profit margin (%) 5.1% 10.7% 13.8%
    No. of shares (m) 120
    Diluted earnings per share (Rs) 56
    Price to earnings ratio (x)* 24.87

    *based on trailing 12 months earnings and adjusted over exceptional item

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