FERMENTA BIOTECH 2021-22 Annual Report Analysis

Wed, 3 Aug

FERMENTA BIOTECH 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.

FERMENTA BIOTECH Income Statement Analysis

• Operating income during the year rose 5.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 15.6% in FY22 as against 21.9% in FY21.
• Depreciation charges increased by 25.9% and finance costs decreased by 5.4% YoY, respectively.
• Other income declined by 2.1% YoY.
• Net profit for the year declined by 64.6% YoY.
• Net profit margins during the year declined from 11.3% in FY21 to 3.8% in FY22.

FERMENTA BIOTECH Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	3,773	3,985	5.6%
Other income	Rs m	84	82	-2.1%
Total Revenues	Rs m	3,857	4,067	5.5%
Gross profit	Rs m	826	623	-24.6%
Depreciation	Rs m	203	256	25.9%
Interest	Rs m	190	180	-5.4%
Profit before tax	Rs m	516	269	-47.8%
Tax	Rs m	91	119	30.6%
Profit after tax	Rs m	425	151	-64.6%
Gross profit margin	%	21.9	15.6
Effective tax rate	%	17.6	44.1
Net profit margin	%	11.3	3.8

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FERMENTA BIOTECH Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 2 billion as compared to Rs 2 billion in FY21, thereby witnessing an decrease of -0.9%.
• Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during FY21, a growth of 3.8%.
• Current assets rose 1% and stood at Rs 3 billion, while fixed assets rose 7% and stood at Rs 4 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 8 billion as against Rs 7 billion during FY21, thereby witnessing a growth of 4%.

FERMENTA BIOTECH Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	3,486	3,574	2.5
Current Liabilities	Rs m	2,301	2,279	-0.9
Long-term Debt	Rs m	1,104	1,147	3.8
Total Liabilities	Rs m	7,218	7,534	4.4
Current assets	Rs m	3,304	3,348	1.3
Fixed Assets	Rs m	3,914	4,186	6.9
Total Assets	Rs m	7,218	7,534	4.4

FERMENTA BIOTECH Cash Flow Statement Analysis

• FERMENTA BIOTECH's cash flow from operating activities (CFO) during FY22 stood at Rs 434 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -260 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -216 million on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -42 million from the Rs 205 million net cash flows seen during FY21.

FERMENTA BIOTECH 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	626	434	-30.6%
Cash Flow from Investing Activities	Rs m	-416	-260	-
Cash Flow from Financing Activities	Rs m	-11	-216	-
Net Cash Flow	Rs m	205	-42	-

Current Valuations for FERMENTA BIOTECH

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.2, an decline from the EPS of Rs 14.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 195.0, stands at 38.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.6 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 20.4 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	130.8	138.1
TTM Earnings per share	Rs	14.7	5.2
Diluted earnings per share	Rs	14.5	5.1
Price to Cash Flow	x	11.7	20.4
TTM P/E ratio	x	17.3	38.1
Price / Book Value ratio	x	2.7	2.3
Market Cap	Rs m	9,520	8,284
Dividends per share (Unadj.)	Rs	2.5	1.3

Ratio Analysis for FERMENTA BIOTECH

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.5x during FY22, from 1.4x 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 deteriorated and stood at 2.5x during FY22, from 3.7x 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 4.2% during FY22, from 12.2% 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 9.5% during FY22, from 15.4% 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 4.4% during FY22, from 8.5% 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	1.4	1.5
Debtors’ Days	Days	658	798
Interest coverage	x	3.7	2.5
Debt to equity ratio	x	0.3	0.3
Return on assets	%	8.5	4.4
Return on equity	%	12.2	4.2
Return on capital employed	%	15.4	9.5

To see how FERMENTA BIOTECH has performed over the last 5 years, please visit here.

FERMENTA BIOTECH Share Price Performance

Over the last one year, FERMENTA BIOTECH share price has moved down from Rs 318.0 to Rs 195.0, registering a loss of Rs 123.0 or around 38.7%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 22,763.1 (down 0.9%). Over the last one year it has moved down from 26,528.5 to 22,763.1, a loss of 3,765 points (down 14.2%).

Overall, the S&P BSE SENSEX is up 9.8% over the year.

(To know more, check out historical annual results for FERMENTA BIOTECH and quarterly results for FERMENTA BIOTECH)