ALKEM LABORATORIES 2022-23 Annual Report Analysis

Mon, 17 Jul

ALKEM LABORATORIES has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

ALKEM LABORATORIES Income Statement Analysis

• Operating income during the year rose 9.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 26.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.0% in FY23 as against 19.2% in FY22.
• Depreciation charges increased by 2.1% and finance costs increased by 105.0% YoY, respectively.
• Other income grew by 32.8% YoY.
• Net profit for the year declined by 40.1% YoY.
• Net profit margins during the year declined from 15.8% in FY22 to 8.7% in FY23.

ALKEM LABORATORIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	106,342	115,993	9.1%
Other income	Rs m	1,627	2,161	32.8%
Total Revenues	Rs m	107,968	118,153	9.4%
Gross profit	Rs m	20,380	15,065	-26.1%
Depreciation	Rs m	3,040	3,104	2.1%
Interest	Rs m	524	1,074	105.0%
Profit before tax	Rs m	18,443	13,048	-29.3%
Tax	Rs m	1,640	2,980	81.7%
Profit after tax	Rs m	16,803	10,068	-40.1%
Gross profit margin	%	19.2	13.0
Effective tax rate	%	8.9	22.8
Net profit margin	%	15.8	8.7

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

ALKEM LABORATORIES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 37 billion as compared to Rs 48 billion in FY22, thereby witnessing an decrease of -22.9%.
• Current assets rose 2% and stood at Rs 86 billion, while fixed assets fell 14% and stood at Rs 37 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 125 billion as against Rs 128 billion during FY22, thereby witnessing a fall of 2%.

ALKEM LABORATORIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	86,373	90,447	4.7
Current Liabilities	Rs m	48,053	37,071	-22.9
Long-term Debt	Rs m	94	0	-100.0
Total Liabilities	Rs m	127,599	124,541	-2.4
Current assets	Rs m	84,337	86,064	2.0
Fixed Assets	Rs m	43,245	37,245	-13.9
Total Assets	Rs m	127,599	124,541	-2.4

ALKEM LABORATORIES Cash Flow Statement Analysis

• ALKEM LABORATORIES's cash flow from operating activities (CFO) during FY23 stood at Rs 17 billion, an improvement of 51.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -18 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 416 million from the Rs 580 million net cash flows seen during FY22.

ALKEM LABORATORIES Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	11,110	16,825	51.4%
Cash Flow from Investing Activities	Rs m	-14,351	1,128	-
Cash Flow from Financing Activities	Rs m	3,796	-17,608	-
Net Cash Flow	Rs m	580	416	-28.2%

Current Valuations for ALKEM LABORATORIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 84.2, an decline from the EPS of Rs 140.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,628.1, stands at 43.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.8 times, while the price to sales ratio stands at 3.7 times.
• The company's price to cash flow (P/CF) ratio stood at 29.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	889.4	970.1
TTM Earnings per share	Rs	140.5	84.2
Diluted earnings per share	Rs	140.5	84.2
Price to Cash Flow	x	21.8	29.3
TTM P/E ratio	x	25.7	43.1
Price / Book Value ratio	x	4.7	4.3
Market Cap	Rs m	402,868	386,207
Dividends per share (Unadj.)	Rs	34.0	50.0

Ratio Analysis for ALKEM LABORATORIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY23, from 1.8x during FY22. 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 13.2x during FY23, from 36.2x during FY22. 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 11.1% during FY23, from 19.5% during FY23. 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 15.6% during FY23, from 21.9% during FY22. 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 8.9% during FY23, from 13.6% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.8	2.3
Debtors’ Days	Days	65	67
Interest coverage	x	36.2	13.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.6	8.9
Return on equity	%	19.5	11.1
Return on capital employed	%	21.9	15.6

To see how ALKEM LABORATORIES has performed over the last 5 years, please visit here.

ALKEM LABORATORIES Share Price Performance

Over the last one year, ALKEM LABORATORIES share price has moved up from Rs 3,213.6 to Rs 3,628.1, registering a gain of Rs 414.5 or around 12.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 26,443.1 (up 0.8%). Over the last one year it has moved up from 22,591.9 to 26,443.1, a gain of 3,851 points (up 17.0%).

Overall, the S&P BSE SENSEX is up 24.4% over the year.

(To know more, check out historical annual results for ALKEM LABORATORIES and quarterly results for ALKEM LABORATORIES)