DIVIS LABORATORIES 2018-19 Annual Report Analysis

Sun, 31 Mar

DIVIS LABORATORIES 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.

DIVIS LABORATORIES Income Statement Analysis

• Operating income during the year rose 27.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 48.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 37.9% in FY19 as against 32.6% in FY18.
• Depreciation charges increased by 18.5% and finance costs increased by 97.5% YoY, respectively.
• Other income grew by 37.2% YoY.
• Net profit for the year grew by 54.2% YoY.
• Net profit margins during the year grew from 22.7% in FY18 to 27.3% in FY19.

DIVIS LABORATORIES Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	38,702	49,463	27.8%
Other income	Rs m	1,134	1,556	37.2%
Total Revenues	Rs m	39,836	51,019	28.1%
Gross profit	Rs m	12,628	18,730	48.3%
Depreciation	Rs m	1,425	1,689	18.5%
Interest	Rs m	24	47	97.5%
Profit before tax	Rs m	12,313	18,551	50.7%
Tax	Rs m	3,543	5,023	41.8%
Profit after tax	Rs m	8,770	13,527	54.2%
Gross profit margin	%	32.6	37.9
Effective tax rate	%	28.8	27.1
Net profit margin	%	22.7	27.3

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DIVIS LABORATORIES Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 8 billion as compared to Rs 7 billion in FY18, thereby witnessing an increase of 29.6%.
• Current assets rose 3% and stood at Rs 47 billion, while fixed assets rose 9% and stood at Rs 41 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 88 billion as against Rs 83 billion during FY18, thereby witnessing a growth of 5%.

DIVIS LABORATORIES Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	59,248	69,572	17.4
Current Liabilities	Rs m	6,534	8,468	29.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	83,471	87,953	5.4
Current assets	Rs m	45,351	46,501	2.5
Fixed Assets	Rs m	38,120	41,452	8.7
Total Assets	Rs m	83,471	87,953	5.4

DIVIS LABORATORIES Cash Flow Statement Analysis

• DIVIS LABORATORIES's cash flow from operating activities (CFO) during FY19 stood at Rs 10 billion, an improvement of 23.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -7 billion, an improvement of 43.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion, an improvement of 22% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 230 million from the Rs -166 million net cash flows seen during FY18.

DIVIS LABORATORIES 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	7,759	9,543	23.0%
Cash Flow from Investing Activities	Rs m	-4,783	-6,854	-
Cash Flow from Financing Activities	Rs m	-3,142	-2,459	-
Net Cash Flow	Rs m	-166	230	-

Current Valuations for DIVIS LABORATORIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 51.0, an improvement from the EPS of Rs 33.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,703.2, stands at 33.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.5 times, while the price to sales ratio stands at 9.1 times.
• The company's price to cash flow (P/CF) ratio stood at 24.1 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	145.8	186.3
TTM Earnings per share	Rs	33.0	51.0
Diluted earnings per share	Rs	33.0	51.0
Price to Cash Flow	x	28.4	24.1
TTM P/E ratio	x	33.3	33.9
Price / Book Value ratio	x	3.8	5.3
Market Cap	Rs m	222,310	366,619
Dividends per share (Unadj.)	Rs	10.0	16.0

Ratio Analysis for DIVIS LABORATORIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 5.5x during FY19, from 6.9x 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 397.4x during FY19, from 520.5x 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 19.4% during FY19, from 14.8% 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 26.7% during FY19, from 20.8% 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 15.4% during FY19, from 10.5% 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	6.9	5.5
Debtors’ Days	Days	957	858
Interest coverage	x	520.5	397.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.5	15.4
Return on equity	%	14.8	19.4
Return on capital employed	%	20.8	26.7

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

DIVIS LABORATORIES Share Price Performance

Over the last one year, DIVIS LABORATORIES share price has moved up from Rs 1,089.5 to Rs 1,703.2, registering a gain of Rs 613.7 or around 56.3%.

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 DIVIS LABORATORIES and quarterly results for DIVIS LABORATORIES)

Read: Latest Annual Report Analysis of DIVIS LABORATORIES