CIPLA 2020-21 Annual Report Analysis

Wed, 31 Mar

CIPLA has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

CIPLA Income Statement Analysis

• Operating income during the year rose 11.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 33.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.2% in FY21 as against 18.6% in FY20.
• Depreciation charges decreased by 9.1% and finance costs decreased by 18.6% YoY, respectively.
• Other income declined by 27.0% YoY.
• Net profit for the year grew by 55.2% YoY.
• Net profit margins during the year grew from 9.0% in FY20 to 12.5% in FY21.

CIPLA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	171,320	191,596	11.8%
Other income	Rs m	3,694	2,698	-27.0%
Total Revenues	Rs m	175,014	194,294	11.0%
Gross profit	Rs m	31,808	42,487	33.6%
Depreciation	Rs m	11,747	10,677	-9.1%
Interest	Rs m	1,974	1,607	-18.6%
Profit before tax	Rs m	21,782	32,901	51.0%
Tax	Rs m	6,312	8,888	40.8%
Profit after tax	Rs m	15,470	24,013	55.2%
Gross profit margin	%	18.6	22.2
Effective tax rate	%	29.0	27.0
Net profit margin	%	9.0	12.5

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CIPLA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 46 billion as compared to Rs 44 billion in FY20, thereby witnessing an increase of 4.5%.
• Long-term debt down at Rs 12 billion as compared to Rs 24 billion during FY20, a fall of 49.2%.
• Current assets rose 13% and stood at Rs 132 billion, while fixed assets fell 1% and stood at Rs 116 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 248 billion as against Rs 234 billion during FY20, thereby witnessing a growth of 6%.

CIPLA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	157,100	182,844	16.4
Current Liabilities	Rs m	43,931	45,916	4.5
Long-term Debt	Rs m	23,693	12,028	-49.2
Total Liabilities	Rs m	234,228	248,372	6.0
Current assets	Rs m	117,062	132,095	12.8
Fixed Assets	Rs m	117,166	116,277	-0.8
Total Assets	Rs m	234,228	248,372	6.0

CIPLA Cash Flow Statement Analysis

• CIPLA's cash flow from operating activities (CFO) during FY21 stood at Rs 38 billion, an improvement of 22.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -24 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -13 billion, an improvement of 55% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 509 million from the Rs 2 billion net cash flows seen during FY20.

CIPLA Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	30,685	37,552	22.4%
Cash Flow from Investing Activities	Rs m	1,040	-23,872	-
Cash Flow from Financing Activities	Rs m	-29,488	-13,299	-
Net Cash Flow	Rs m	2,340	509	-78.2%

Current Valuations for CIPLA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 29.8, an improvement from the EPS of Rs 19.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 815.3, stands at 27.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 15.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	212.5	237.6
TTM Earnings per share	Rs	19.2	29.8
Diluted earnings per share	Rs	19.2	29.8
Price to Cash Flow	x	12.5	15.0
TTM P/E ratio	x	22.1	27.4
Price / Book Value ratio	x	2.4	2.8
Market Cap	Rs m	379,858	519,826
Dividends per share (Unadj.)	Rs	4.0	5.0

Ratio Analysis for CIPLA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.9x during FY21, from 2.7x during FY20. 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 improved and stood at 21.5x during FY21, from 12.0x during FY20. 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 13.1% during FY21, from 9.8% during FY21. 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 17.7% during FY21, from 13.1% during FY20. 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 10.3% during FY21, from 7.4% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	2.7	2.9
Debtors’ Days	Days	8	7
Interest coverage	x	12.0	21.5
Debt to equity ratio	x	0.2	0.1
Return on assets	%	7.4	10.3
Return on equity	%	9.8	13.1
Return on capital employed	%	13.1	17.7

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 up from Rs 423.0 to Rs 815.3, registering a gain of Rs 392.3 or around 92.7%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

Overall, the S&P BSE SENSEX is up 74.1% 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