AJANTA PHARMA 2018-19 Annual Report Analysis

Mon, 24 Jun

AJANTA PHARMA has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

AJANTA PHARMA Income Statement Analysis

• Operating income during the year fell 3.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.6% in FY19 as against 31.0% in FY18.
• Depreciation charges increased by 21.0% and finance costs increased by 182.9% YoY, respectively.
• Other income declined by 12.7% YoY.
• Net profit for the year declined by 17.4% YoY.
• Net profit margins during the year declined from 21.8% in FY18 to 18.6% in FY19.

AJANTA PHARMA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	21,258	20,554	-3.3%
Other income	Rs m	242	211	-12.7%
Total Revenues	Rs m	21,499	20,765	-3.4%
Gross profit	Rs m	6,584	5,664	-14.0%
Depreciation	Rs m	596	721	21.0%
Interest	Rs m	4	12	182.9%
Profit before tax	Rs m	6,226	5,143	-17.4%
Tax	Rs m	1,539	1,273	-17.3%
Profit after tax	Rs m	4,686	3,870	-17.4%
Gross profit margin	%	31.0	27.6
Effective tax rate	%	24.7	24.8
Net profit margin	%	21.8	18.6

AJANTA PHARMA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 4 billion as compared to Rs 3 billion in FY18, thereby witnessing an increase of 9.1%.
• Long-term debt down at Rs 7 million as compared to Rs 10 million during FY18, a fall of 34.7%.
• Current assets fell 3% and stood at Rs 12 billion, while fixed assets rose 29% and stood at Rs 14 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 27 billion as against Rs 24 billion during FY18, thereby witnessing a growth of 10%.

AJANTA PHARMA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	20,414	22,452	10.0
Current Liabilities	Rs m	3,461	3,776	9.1
Long-term Debt	Rs m	10	7	-34.7
Total Liabilities	Rs m	24,486	26,962	10.1
Current assets	Rs m	12,236	11,812	-3.5
Fixed Assets	Rs m	11,140	14,398	29.3
Total Assets	Rs m	24,486	26,962	10.1

AJANTA PHARMA Cash Flow Statement Analysis

• AJANTA PHARMA's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion, an improvement of 33.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 45 million from the Rs 248 million net cash flows seen during FY18.

AJANTA PHARMA Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	2,811	3,748	33.3%
Cash Flow from Investing Activities	Rs m	-2,561	-2,228	-
Cash Flow from Financing Activities	Rs m	-2	-1,475	-
Net Cash Flow	Rs m	248	45	-81.8%

Current Valuations for AJANTA PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.0, an decline from the EPS of Rs 52.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 950.0, stands at 21.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.5 times, while the price to sales ratio stands at 5.0 times.
• The company's price to cash flow (P/CF) ratio stood at 18.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	239.5	233.5
TTM Earnings per share	Rs	52.8	44.0
Diluted earnings per share	Rs	53.3	44.0
Price to Cash Flow	x	16.0	18.2
TTM P/E ratio	x	21.8	21.6
Price / Book Value ratio	x	6.4	4.5
Market Cap	Rs m	84,332	83,553
Dividends per share (Unadj.)	Rs	0.0	9.0

Ratio Analysis for AJANTA PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.1x during FY19, from 3.5x during FY18. 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 444.3x during FY19, from 1,519.4x during FY18. 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 17.2% during FY19, from 23.0% during FY19. 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 23.0% during FY19, from 30.5% during FY18. 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 14.4% during FY19, from 19.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	3.5	3.1
Debtors’ Days	Days	79	82
Interest coverage	x	1,519.4	444.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	19.2	14.4
Return on equity	%	23.0	17.2
Return on capital employed	%	30.5	23.0

To see how AJANTA PHARMA has performed over the last 5 years, please visit here.

AJANTA PHARMA Share Price Performance

Over the last one year, AJANTA PHARMA share price has moved up from Rs 1,035.3 to Rs 950.0, registering a loss of Rs 85.3 or around 8.2%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 12,681.1 (down 0.1%). Over the last one year it has moved down from 14,298.5 to 12,681.1, a loss of 1,617 points (down 11.3%).

Overall, the S&P BSE SENSEX is up 10.4% over the year.

(To know more, check out historical annual results for AJANTA PHARMA and quarterly results for AJANTA PHARMA)