ZYDUS LIFESCIENCES 2022-23 Annual Report Analysis

Mon, 17 Jul

ZYDUS LIFESCIENCES 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.

ZYDUS LIFESCIENCES Income Statement Analysis

• Operating income during the year rose 14.1% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 9.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.2% in FY23 as against 21.8% in FY22.
• Depreciation charges increased by 1.4% and finance costs increased by 2.3% YoY, respectively.
• Other income grew by 21.5% YoY.
• Net profit for the year declined by 13.9% YoY.
• Net profit margins during the year declined from 15.4% in FY22 to 11.6% in FY23.

ZYDUS LIFESCIENCES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	151,099	172,374	14.1%
Other income	Rs m	3,907	4,746	21.5%
Total Revenues	Rs m	155,006	177,120	14.3%
Gross profit	Rs m	32,874	29,677	-9.7%
Depreciation	Rs m	7,130	7,227	1.4%
Interest	Rs m	1,270	1,299	2.3%
Profit before tax	Rs m	28,381	25,897	-8.8%
Tax	Rs m	5,117	5,878	14.9%
Profit after tax	Rs m	23,264	20,019	-13.9%
Gross profit margin	%	21.8	17.2
Effective tax rate	%	18.0	22.7
Net profit margin	%	15.4	11.6

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ZYDUS LIFESCIENCES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 55 billion as compared to Rs 78 billion in FY22, thereby witnessing an decrease of -29.4%.
• Current assets fell 17% and stood at Rs 100 billion, while fixed assets rose 0% and stood at Rs 145 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 245 billion as against Rs 267 billion during FY22, thereby witnessing a fall of 8%.

ZYDUS LIFESCIENCES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	169,996	175,158	3.0
Current Liabilities	Rs m	78,268	55,267	-29.4
Long-term Debt	Rs m	3,621	0	-100.0
Total Liabilities	Rs m	266,996	244,940	-8.3
Current assets	Rs m	120,952	100,082	-17.3
Fixed Assets	Rs m	144,382	144,776	0.3
Total Assets	Rs m	266,996	244,940	-8.3

ZYDUS LIFESCIENCES Cash Flow Statement Analysis

• ZYDUS LIFESCIENCES's cash flow from operating activities (CFO) during FY23 stood at Rs 27 billion, an improvement of 27.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs 12 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -44 billion on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -5 billion from the Rs 2 billion net cash flows seen during FY22.

ZYDUS LIFESCIENCES 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	21,045	26,888	27.8%
Cash Flow from Investing Activities	Rs m	-10,003	11,712	-
Cash Flow from Financing Activities	Rs m	-8,683	-44,004	-
Net Cash Flow	Rs m	2,186	-5,338	-

Current Valuations for ZYDUS LIFESCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.8, an decline from the EPS of Rs 22.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 603.0, stands at 30.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 3.5 times.
• The company's price to cash flow (P/CF) ratio stood at 15.1 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	147.6	170.3
TTM Earnings per share	Rs	22.7	19.8
Diluted earnings per share	Rs	23.0	19.8
Price to Cash Flow	x	11.6	15.1
TTM P/E ratio	x	15.2	30.5
Price / Book Value ratio	x	3.0	2.4
Market Cap	Rs m	514,277	412,144
Dividends per share (Unadj.)	Rs	2.5	6.0

Ratio Analysis for ZYDUS LIFESCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during FY23, from 1.5x 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 20.9x during FY23, from 23.3x 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 11.4% during FY23, from 13.7% 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 15.5% during FY23, from 17.1% 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 8.7% during FY23, from 9.2% 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	1.5	1.8
Debtors’ Days	Days	81	94
Interest coverage	x	23.3	20.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.2	8.7
Return on equity	%	13.7	11.4
Return on capital employed	%	17.1	15.5

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 up from Rs 371.2 to Rs 603.0, registering a gain of Rs 231.9 or around 62.5%.

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 ZYDUS LIFESCIENCES and quarterly results for ZYDUS LIFESCIENCES)