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CIPLA 2019-20 Annual Report Analysis
Tue, 31 Mar

CIPLA 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.

CIPLA Income Statement Analysis

  • Operating income during the year rose 4.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 2.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 18.6% in FY20 as against 18.9% in FY19.
  • Depreciation charges decreased by 11.4% and finance costs increased by 17.2% YoY, respectively.
  • Other income declined by 22.5% YoY.
  • Net profit for the year grew by 2.5% YoY.
  • Net profit margins during the year declined from 9.2% in FY19 to 9.0% in FY20.

CIPLA Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 163,624 171,320 4.7%
Other income Rs m 4,766 3,694 -22.5%
Total Revenues Rs m 168,390 175,014 3.9%
Gross profit Rs m 30,973 31,808 2.7%
Depreciation Rs m 13,263 11,747 -11.4%
Interest Rs m 1,684 1,974 17.2%
Profit before tax Rs m 20,791 21,782 4.8%
Tax Rs m 5,695 6,312 10.8%
Profit after tax Rs m 15,096 15,470 2.5%
Gross profit margin % 18.9 18.6
Effective tax rate % 27.4 29.0
Net profit margin % 9.2 9.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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CIPLA Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 44 billion as compared to Rs 38 billion in FY19, thereby witnessing an increase of 16.5%.
  • Long-term debt down at Rs 24 billion as compared to Rs 38 billion during FY19, a fall of 38.1%.
  • Current assets fell 6% and stood at Rs 117 billion, while fixed assets rose 3% and stood at Rs 117 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 234 billion as against Rs 238 billion during FY19, thereby witnessing a fall of 1%.

CIPLA Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 149,552 157,100 5.0
 
Current Liabilities Rs m 37,715 43,931 16.5
Long-term Debt Rs m 38,301 23,693 -38.1
Total Liabilities Rs m 237,619 234,228 -1.4
 
Current assets Rs m 124,266 117,062 -5.8
Fixed Assets Rs m 113,353 117,166 3.4
Total Assets Rs m 237,619 234,228 -1.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



CIPLA Cash Flow Statement Analysis

  • CIPLA's cash flow from operating activities (CFO) during FY20 stood at Rs 31 billion, an improvement of 81.4% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 1 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -29 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs 2 billion from the Rs -3 billion net cash flows seen during FY19.

CIPLA 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 16,911 30,685 81.4%
Cash Flow from Investing Activities Rs m -16,687 1,040 -
Cash Flow from Financing Activities Rs m -3,487 -29,488 -
Net Cash Flow Rs m -3,451 2,340 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for CIPLA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 19.2, an improvement from the EPS of Rs 18.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 423.0, stands at 22.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 2.0 times.
  • The company's price to cash flow (P/CF) ratio stood at 14.0 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 203.1 212.5
TTM Earnings per share Rs 18.7 19.2
Diluted earnings per share Rs 18.7 19.2
Price to Cash Flow x 15.1 14.0
TTM P/E ratio x 28.3 22.1
Price / Book Value ratio x 3.1 2.4
Market Cap Rs m 468,032 379,858
Dividends per share (Unadj.) Rs 3.0 4.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for CIPLA

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.7x during FY20, from 3.3x 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 12.0x during FY20, from 13.3x 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 9.8% during FY20, from 10.1% 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 improved and stood at 13.1% during FY20, from 12.0% 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 improved and stood at 7.4% during FY20, from 7.1% 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 3.3 2.7
Debtors’ Days Days 9 8
Interest coverage x 13.3 12.0
Debt to equity ratio x 0.3 0.2
Return on assets % 7.1 7.4
Return on equity % 10.1 9.8
Return on capital employed % 12.0 13.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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 529.3 to Rs 423.0, registering a loss of Rs 106.3 or around 20.1%.

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 CIPLA and quarterly results for CIPLA)

Annual Report FAQs

What is the current share price of CIPLA?

CIPLA currently trades at Rs 1,494.7 per share. You can check out the latest share price performance of CIPLA here...

What was the revenue of CIPLA in FY20? How does it compare to earlier years?

The revenues of CIPLA stood at Rs 175,014 m in FY20, which was up 3.9% compared to Rs 168,390 m reported in FY19.

CIPLA's revenue has grown from Rs 136,079 m in FY16 to Rs 175,014 m in FY20.

Over the past 5 years, the revenue of CIPLA has grown at a CAGR of 6.5%.

What was the net profit of CIPLA in FY20? How does it compare to earlier years?

The net profit of CIPLA stood at Rs 15,470 m in FY20, which was up 2.5% compared to Rs 15,096 m reported in FY19.

This compares to a net profit of Rs 14,194 m in FY18 and a net profit of Rs 10,424 m in FY17.

Over the past 5 years, CIPLA net profit has grown at a CAGR of 2.6%.

What does the cash flow statement of CIPLA reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of CIPLA reveals:

  • Cash flow from operations increased in FY20 and stood at Rs 30,685 m as compared to Rs 16,911 m in FY19.
  • Cash flow from investments increased in FY20 and stood at Rs 1,040 m as compared to Rs -16,687 m in FY19.
  • Cash flow from financial activity decreased in FY20 and stood at Rs -29,488 m as compared to Rs -3,487 m in FY19.

Here's the cash flow statement of CIPLA for the past 5 years.

(Rs m)FY16FY17FY18FY19FY20
From Operations17,40823,81814,62816,91130,685
From Investments-45,226-13,102-8,540-16,6871,040
From Financial Activity31,041-13,257-3,855-3,487-29,488
Net Cashflow3,123-2,4782,431-3,4512,340

What does the Key Ratio analysis of CIPLA reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of CIPLA reveals:

  • Operating profit margins witnessed a fall and stood at 18.6% in FY20 as against 18.9% in FY19.
  • Net profit margins declined from 9.2% in FY19 to 9.0% in FY20.
  • Debt to Equity ratio for FY20 stood at 0.2 as compared to 0.3 in FY19.

Here's the ratio/financial analysis of CIPLA for the past 5 years.

 FY16FY17FY18FY19FY20
Operating Profit Margin (%)18.517.518.218.918.6
Net Profit Margin (%)10.47.49.49.29.0
Debt to Equity Ratio (x)0.00.30.30.30.2

Read: Latest Annual Report Analysis of CIPLA

 

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