ZYDUS LIFESCIENCES 2019-20 Annual Report Analysis

Tue, 31 Mar

ZYDUS LIFESCIENCES has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

ZYDUS LIFESCIENCES Income Statement Analysis

• Operating income during the year rose 8.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 18.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.0% in FY20 as against 22.5% in FY19.
• Depreciation charges increased by 16.4% and finance costs increased by 74.6% YoY, respectively.
• Other income declined by 43.8% YoY.
• Net profit for the year declined by 36.5% YoY.
• Net profit margins during the year declined from 14.1% in FY19 to 8.2% in FY20.

ZYDUS LIFESCIENCES Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	131,656	142,531	8.3%
Other income	Rs m	2,085	1,171	-43.8%
Total Revenues	Rs m	133,741	143,702	7.4%
Gross profit	Rs m	29,680	24,166	-18.6%
Depreciation	Rs m	5,986	6,965	16.4%
Interest	Rs m	1,958	3,418	74.6%
Profit before tax	Rs m	23,821	14,954	-37.2%
Tax	Rs m	5,303	3,198	-39.7%
Profit after tax	Rs m	18,518	11,756	-36.5%
Gross profit margin	%	22.5	17.0
Effective tax rate	%	22.3	21.4
Net profit margin	%	14.1	8.2

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ZYDUS LIFESCIENCES Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 83 billion as compared to Rs 73 billion in FY19, thereby witnessing an increase of 12.6%.
• Long-term debt down at Rs 32 billion as compared to Rs 39 billion during FY19, a fall of 18.6%.
• Current assets rose 3% and stood at Rs 87 billion, while fixed assets rose 1% and stood at Rs 141 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 228 billion as against Rs 225 billion during FY19, thereby witnessing a growth of 1%.

ZYDUS LIFESCIENCES Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	103,863	103,757	-0.1
Current Liabilities	Rs m	73,425	82,694	12.6
Long-term Debt	Rs m	39,497	32,146	-18.6
Total Liabilities	Rs m	225,128	228,337	1.4
Current assets	Rs m	84,981	87,154	2.6
Fixed Assets	Rs m	140,147	141,183	0.7
Total Assets	Rs m	225,128	228,337	1.4

ZYDUS LIFESCIENCES Cash Flow Statement Analysis

• ZYDUS LIFESCIENCES's cash flow from operating activities (CFO) during FY20 stood at Rs 29 billion, an improvement of 128.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -10 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -15 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 4 billion from the Rs -8 billion net cash flows seen during FY19.

ZYDUS LIFESCIENCES Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	12,819	29,315	128.7%
Cash Flow from Investing Activities	Rs m	-42,387	-10,123	-
Cash Flow from Financing Activities	Rs m	18,846	-15,282	-
Net Cash Flow	Rs m	-8,109	3,989	-

Current Valuations for ZYDUS LIFESCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.5, an decline from the EPS of Rs 18.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 267.1, stands at 23.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 15.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	128.6	139.2
TTM Earnings per share	Rs	18.1	11.5
Diluted earnings per share	Rs	18.1	11.5
Price to Cash Flow	x	14.5	15.3
TTM P/E ratio	x	19.3	23.3
Price / Book Value ratio	x	3.6	2.8
Market Cap	Rs m	378,171	286,034
Dividends per share (Unadj.)	Rs	3.5	3.5

Ratio Analysis for ZYDUS LIFESCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.1x during FY20, from 1.2x during FY19. 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 5.4x during FY20, from 13.2x during FY19. 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 11.3% during FY20, from 17.8% during FY20. 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 13.5% during FY20, from 18.0% during FY19. 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 6.6% during FY20, from 9.1% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.2	1.1
Debtors’ Days	Days	110	94
Interest coverage	x	13.2	5.4
Debt to equity ratio	x	0.4	0.3
Return on assets	%	9.1	6.6
Return on equity	%	17.8	11.3
Return on capital employed	%	18.0	13.5

To see how ZYDUS LIFESCIENCES has performed over the last 5 years, please visit here.

ZYDUS LIFESCIENCES Share Price Performance

Over the last one year, ZYDUS LIFESCIENCES share price has moved down from Rs 346.6 to Rs 267.1, registering a loss of Rs 79.5 or around 22.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 12,148.6 (up 3.4%). Over the last one year it has moved down from 14,407.9 to 12,148.6, a loss of 2,259 points (down 15.7%).

Overall, the S&P BSE SENSEX is down 24.2% over the year.

(To know more, check out historical annual results for ZYDUS LIFESCIENCES and quarterly results for ZYDUS LIFESCIENCES)

Read: Latest Annual Report Analysis of ZYDUS LIFESCIENCES