AARTI DRUGS 2021-22 Annual Report Analysis

Thu, 14 Jul

AARTI DRUGS has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

AARTI DRUGS Income Statement Analysis

• Operating income during the year rose 15.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.4% in FY22 as against 20.4% in FY21.
• Depreciation charges increased by 0.3% and finance costs decreased by 8.9% YoY, respectively.
• Other income grew by 150.1% YoY.
• Net profit for the year declined by 26.9% YoY.
• Net profit margins during the year declined from 13.0% in FY21 to 8.2% in FY22.

AARTI DRUGS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	21,548	24,886	15.5%
Other income	Rs m	45	113	150.1%
Total Revenues	Rs m	21,593	25,000	15.8%
Gross profit	Rs m	4,406	3,326	-24.5%
Depreciation	Rs m	499	500	0.3%
Interest	Rs m	262	239	-8.9%
Profit before tax	Rs m	3,690	2,700	-26.8%
Tax	Rs m	886	650	-26.7%
Profit after tax	Rs m	2,804	2,050	-26.9%
Gross profit margin	%	20.4	13.4
Effective tax rate	%	24.0	24.1
Net profit margin	%	13.0	8.2

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AARTI DRUGS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 9 billion as compared to Rs 6 billion in FY21, thereby witnessing an increase of 57.9%.
• Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY21, a fall of 6.1%.
• Current assets rose 32% and stood at Rs 14 billion, while fixed assets rose 15% and stood at Rs 8 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 22 billion as against Rs 18 billion during FY21, thereby witnessing a growth of 25%.

AARTI DRUGS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	9,134	10,364	13.5
Current Liabilities	Rs m	5,954	9,401	57.9
Long-term Debt	Rs m	1,476	1,385	-6.1
Total Liabilities	Rs m	17,660	22,080	25.0
Current assets	Rs m	10,568	13,934	31.8
Fixed Assets	Rs m	7,092	8,146	14.9
Total Assets	Rs m	17,660	22,080	25.0

AARTI DRUGS Cash Flow Statement Analysis

• AARTI DRUGS's cash flow from operating activities (CFO) during FY22 stood at Rs 696 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -1 billion, an improvement of 107.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 920 million, an improvement of 213% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 128 million from the Rs 20 million net cash flows seen during FY21.

AARTI DRUGS Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	1,550	696	-55.1%
Cash Flow from Investing Activities	Rs m	-718	-1,489	-
Cash Flow from Financing Activities	Rs m	-811	920	-
Net Cash Flow	Rs m	20	128	526.8%

Current Valuations for AARTI DRUGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.1, an decline from the EPS of Rs 30.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 435.2, stands at 19.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.9 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 22.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	231.2	268.8
TTM Earnings per share	Rs	30.1	22.1
Diluted earnings per share	Rs	30.3	22.1
Price to Cash Flow	x	19.5	22.9
TTM P/E ratio	x	22.9	19.7
Price / Book Value ratio	x	21.6	5.6
Market Cap	Rs m	197,132	58,333
Dividends per share (Unadj.)	Rs	2.5	1.0

Ratio Analysis for AARTI DRUGS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during FY22, from 1.8x during FY21. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 12.3x during FY22, from 15.1x during FY21. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 19.8% during FY22, from 30.7% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 25.0% during FY22, from 37.3% during FY21. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 10.4% during FY22, from 17.4% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	1.8	1.5
Debtors’ Days	Days	941	1,100
Interest coverage	x	15.1	12.3
Debt to equity ratio	x	0.2	0.1
Return on assets	%	17.4	10.4
Return on equity	%	30.7	19.8
Return on capital employed	%	37.3	25.0

To see how AARTI DRUGS has performed over the last 5 years, please visit here.

AARTI DRUGS Share Price Performance

Over the last one year, AARTI DRUGS share price has moved down from Rs 712.9 to Rs 435.2, registering a loss of Rs 277.7 or around 39.0%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 22,545.8 (up 0.7%). Over the last one year it has moved down from 26,059.1 to 22,545.8, a loss of 3,513 points (down 13.5%).

Overall, the S&P BSE SENSEX is up 2.0% over the year.

(To know more, check out historical annual results for AARTI DRUGS and quarterly results for AARTI DRUGS)

Read: Latest Annual Report Analysis of AARTI DRUGS