CIPLA 2018-19 Annual Report Analysis

Sun, 31 Mar

CIPLA 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.

CIPLA Income Statement Analysis

• Operating income during the year rose 8.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.9% in FY19 as against 18.2% in FY18.
• Depreciation charges increased by 0.3% and finance costs increased by 47.4% YoY, respectively.
• Other income grew by 33.3% YoY.
• Net profit for the year grew by 6.4% YoY.
• Net profit margins during the year declined from 9.4% in FY18 to 9.2% in FY19.

CIPLA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	150,922	163,624	8.4%
Other income	Rs m	3,577	4,766	33.3%
Total Revenues	Rs m	154,498	168,390	9.0%
Gross profit	Rs m	27,489	30,973	12.7%
Depreciation	Rs m	13,228	13,263	0.3%
Interest	Rs m	1,142	1,684	47.4%
Profit before tax	Rs m	16,695	20,791	24.5%
Tax	Rs m	2,501	5,695	127.7%
Profit after tax	Rs m	14,194	15,096	6.4%
Gross profit margin	%	18.2	18.9
Effective tax rate	%	15.0	27.4
Net profit margin	%	9.4	9.2

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CIPLA Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 38 billion as compared to Rs 38 billion in FY18, thereby witnessing an decrease of -1.6%.
• Long-term debt stood at Rs 38 billion as compared to Rs 37 billion during FY18, a growth of 4.6%.
• Current assets rose 15% and stood at Rs 124 billion, while fixed assets fell 4% and stood at Rs 113 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 238 billion as against Rs 227 billion during FY18, thereby witnessing a growth of 5%.

CIPLA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	141,629	149,552	5.6
Current Liabilities	Rs m	38,322	37,715	-1.6
Long-term Debt	Rs m	36,621	38,301	4.6
Total Liabilities	Rs m	226,729	237,619	4.8
Current assets	Rs m	108,141	124,266	14.9
Fixed Assets	Rs m	118,588	113,353	-4.4
Total Assets	Rs m	226,729	237,619	4.8

CIPLA Cash Flow Statement Analysis

• CIPLA's cash flow from operating activities (CFO) during FY19 stood at Rs 17 billion, an improvement of 15.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -17 billion, an improvement of 95.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -3 billion, an improvement of 10% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -3 billion from the Rs 2 billion net cash flows seen during FY18.

CIPLA 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	14,628	16,911	15.6%
Cash Flow from Investing Activities	Rs m	-8,540	-16,687	-
Cash Flow from Financing Activities	Rs m	-3,855	-3,487	-
Net Cash Flow	Rs m	2,431	-3,451	-

Current Valuations for CIPLA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.7, an improvement from the EPS of Rs 17.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 529.3, stands at 28.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 2.6 times.
• The company's price to cash flow (P/CF) ratio stood at 16.5 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	187.5	203.1
TTM Earnings per share	Rs	17.6	18.7
Diluted earnings per share	Rs	17.6	18.7
Price to Cash Flow	x	16.0	16.5
TTM P/E ratio	x	34.0	28.3
Price / Book Value ratio	x	3.2	3.1
Market Cap	Rs m	459,723	468,032
Dividends per share (Unadj.)	Rs	3.0	3.0

Ratio Analysis for CIPLA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.3x during FY19, from 2.8x 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 13.3x during FY19, from 15.6x 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 improved and stood at 10.1% during FY19, from 10.0% 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 improved and stood at 12.0% during FY19, from 10.0% 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 improved and stood at 7.1% during FY19, from 6.8% 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	2.8	3.3
Debtors’ Days	Days	8	9
Interest coverage	x	15.6	13.3
Debt to equity ratio	x	0.3	0.3
Return on assets	%	6.8	7.1
Return on equity	%	10.0	10.1
Return on capital employed	%	10.0	12.0

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

CIPLA Share Price Performance

Over the last one year, CIPLA share price has moved down from Rs 543.3 to Rs 529.3, registering a loss of Rs 14.0 or around 2.6%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 14,407.9 (up 1.4%). Over the last one year it has moved up from 13,157.6 to 14,407.9, a gain of 1,250 points (up 9.5%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of CIPLA