CIPLA 2021-22 Annual Report Analysis

Fri, 5 Aug

CIPLA has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

CIPLA Income Statement Analysis

• Operating income during the year rose 13.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.9% in FY22 as against 22.2% in FY21.
• Depreciation charges decreased by 1.5% and finance costs decreased by 33.8% YoY, respectively.
• Other income grew by 19.3% YoY.
• Net profit for the year grew by 6.6% YoY.
• Net profit margins during the year declined from 12.5% in FY21 to 11.8% in FY22.

CIPLA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	191,596	217,633	13.6%
Other income	Rs m	2,698	3,217	19.3%
Total Revenues	Rs m	194,294	220,851	13.7%
Gross profit	Rs m	42,487	43,298	1.9%
Depreciation	Rs m	10,677	10,520	-1.5%
Interest	Rs m	1,607	1,064	-33.8%
Profit before tax	Rs m	32,901	34,933	6.2%
Tax	Rs m	8,888	9,338	5.1%
Profit after tax	Rs m	24,013	25,595	6.6%
Gross profit margin	%	22.2	19.9
Effective tax rate	%	27.0	26.7
Net profit margin	%	12.5	11.8

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CIPLA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 49 billion as compared to Rs 46 billion in FY21, thereby witnessing an increase of 7.0%.
• Long-term debt down at Rs 4 billion as compared to Rs 12 billion during FY21, a fall of 65.4%.
• Current assets rose 12% and stood at Rs 147 billion, while fixed assets rose 2% and stood at Rs 119 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 267 billion as against Rs 248 billion during FY21, thereby witnessing a growth of 7%.

CIPLA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	182,844	207,977	13.7
Current Liabilities	Rs m	45,911	49,129	7.0
Long-term Debt	Rs m	12,028	4,162	-65.4
Total Liabilities	Rs m	248,372	266,523	7.3
Current assets	Rs m	131,810	147,108	11.6
Fixed Assets	Rs m	116,562	119,415	2.4
Total Assets	Rs m	248,372	266,523	7.3

CIPLA Cash Flow Statement Analysis

• CIPLA's cash flow from operating activities (CFO) during FY22 stood at Rs 33 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -19 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -16 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -1 billion from the Rs 1 billion net cash flows seen during FY21.

CIPLA Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	37,552	33,259	-11.4%
Cash Flow from Investing Activities	Rs m	-23,872	-18,719	-
Cash Flow from Financing Activities	Rs m	-12,395	-15,998	-
Net Cash Flow	Rs m	1,413	-1,323	-

Current Valuations for CIPLA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 31.7, an improvement from the EPS of Rs 29.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,038.7, stands at 32.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 3.9 times.
• The company's price to cash flow (P/CF) ratio stood at 21.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	237.6	269.7
TTM Earnings per share	Rs	29.8	31.7
Diluted earnings per share	Rs	29.8	31.7
Price to Cash Flow	x	19.0	21.1
TTM P/E ratio	x	27.4	32.8
Price / Book Value ratio	x	2.8	3.7
Market Cap	Rs m	519,826	762,177
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for CIPLA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.0x during FY22, from 2.9x during FY21. 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 33.8x during FY22, from 21.5x during FY21. 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 12.3% during FY22, from 13.1% during FY22. 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 17.0% during FY22, from 17.7% during FY21. 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 10.0% during FY22, from 10.3% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	2.9	3.0
Debtors’ Days	Days	7	6
Interest coverage	x	21.5	33.8
Debt to equity ratio	x	0.1	0.0
Return on assets	%	10.3	10.0
Return on equity	%	13.1	12.3
Return on capital employed	%	17.7	17.0

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 up from Rs 945.2 to Rs 1,038.7, registering a gain of Rs 93.5 or around 9.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 23,265.8 (up 0.1%). Over the last one year it has moved down from 26,432.9 to 23,265.8, a loss of 3,167 points (down 12.0%).

Overall, the S&P BSE SENSEX is up 8.6% 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