ZYDUS WELLNESS 2022-23 Annual Report Analysis

Wed, 12 Jul

ZYDUS WELLNESS 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 WELLNESS Income Statement Analysis

• Operating income during the year rose 12.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 4.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.5% in FY23 as against 17.0% in FY22.
• Depreciation charges increased by 5.9% and finance costs decreased by 37.0% YoY, respectively.
• Other income declined by 61.6% YoY.
• Net profit for the year grew by 0.5% YoY.
• Net profit margins during the year declined from 15.4% in FY22 to 13.8% in FY23.

ZYDUS WELLNESS Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	20,091	22,548	12.2%
Other income	Rs m	127	49	-61.6%
Total Revenues	Rs m	20,218	22,597	11.8%
Gross profit	Rs m	3,425	3,271	-4.5%
Depreciation	Rs m	236	250	5.9%
Interest	Rs m	255	161	-37.0%
Profit before tax	Rs m	3,060	2,909	-5.0%
Tax	Rs m	-29	-195	NA
Profit after tax	Rs m	3,089	3,104	0.5%
Gross profit margin	%	17.0	14.5
Effective tax rate	%	-0.9	-6.7
Net profit margin	%	15.4	13.8

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ZYDUS WELLNESS Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 7 billion as compared to Rs 8 billion in FY22, thereby witnessing an decrease of -9.7%.
• Current assets rose 12% and stood at Rs 9 billion, while fixed assets rose 1% and stood at Rs 49 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 58 billion as against Rs 57 billion during FY22, thereby witnessing a growth of 2%.

ZYDUS WELLNESS Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	48,440	51,227	5.8
Current Liabilities	Rs m	7,668	6,924	-9.7
Long-term Debt	Rs m	625	0	-100.0
Total Liabilities	Rs m	56,505	57,720	2.1
Current assets	Rs m	8,137	9,078	11.6
Fixed Assets	Rs m	48,368	48,635	0.6
Total Assets	Rs m	56,505	57,720	2.1

ZYDUS WELLNESS Cash Flow Statement Analysis

• ZYDUS WELLNESS's cash flow from operating activities (CFO) during FY23 stood at Rs 917 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -848 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -1 billion, an improvement of 41% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -1 billion from the Rs -829 million net cash flows seen during FY22.

ZYDUS WELLNESS 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	2,369	917	-61.3%
Cash Flow from Investing Activities	Rs m	-860	-848	-
Cash Flow from Financing Activities	Rs m	-2,338	-1,385	-
Net Cash Flow	Rs m	-829	-1,316	-

Current Valuations for ZYDUS WELLNESS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 48.8, an improvement from the EPS of Rs 48.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,472.9, stands at 29.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.8 times, while the price to sales ratio stands at 4.2 times.
• The company's price to cash flow (P/CF) ratio stood at 29.9 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	315.7	354.4
TTM Earnings per share	Rs	48.5	48.8
Diluted earnings per share	Rs	48.5	48.8
Price to Cash Flow	x	28.7	29.9
TTM P/E ratio	x	30.9	29.5
Price / Book Value ratio	x	2.6	2.0
Market Cap	Rs m	124,205	100,380
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for ZYDUS WELLNESS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY23, from 1.1x 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 improved and stood at 19.1x during FY23, from 13.0x 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 6.1% during FY23, from 6.4% 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 6.0% during FY23, from 6.8% 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 5.7% during FY23, from 5.9% 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	1.1	1.3
Debtors’ Days	Days	259	336
Interest coverage	x	13.0	19.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.9	5.7
Return on equity	%	6.4	6.1
Return on capital employed	%	6.8	6.0

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

ZYDUS WELLNESS Share Price Performance

Over the last one year, ZYDUS WELLNESS share price has moved down from Rs 1,569.3 to Rs 1,472.9, registering a loss of Rs 96.5 or around 6.1%.

Overall, the S&P BSE SENSEX is up 20.5% over the year.

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