ERIS LIFESCIENCES 2020-21 Annual Report Analysis

Wed, 31 Mar

ERIS LIFESCIENCES 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.

ERIS LIFESCIENCES Income Statement Analysis

• Operating income during the year rose 12.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 17.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 35.5% in FY21 as against 34.3% in FY20.
• Depreciation charges decreased by 14.5% and finance costs decreased by 14.0% YoY, respectively.
• Other income declined by 45.6% YoY.
• Net profit for the year grew by 19.8% YoY.
• Net profit margins during the year grew from 27.6% in FY20 to 29.3% in FY21.

ERIS LIFESCIENCES Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	10,741	12,119	12.8%
Other income	Rs m	160	87	-45.6%
Total Revenues	Rs m	10,901	12,206	12.0%
Gross profit	Rs m	3,679	4,307	17.1%
Depreciation	Rs m	503	430	-14.5%
Interest	Rs m	23	20	-14.0%
Profit before tax	Rs m	3,314	3,945	19.1%
Tax	Rs m	348	394	13.0%
Profit after tax	Rs m	2,965	3,551	19.8%
Gross profit margin	%	34.3	35.5
Effective tax rate	%	10.5	10.0
Net profit margin	%	27.6	29.3

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ERIS LIFESCIENCES Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 2 billion in FY20, thereby witnessing an increase of 6.9%.
• Current assets rose 0% and stood at Rs 5 billion, while fixed assets rose 29% and stood at Rs 12 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 17 billion as against Rs 14 billion during FY20, thereby witnessing a growth of 18%.

ERIS LIFESCIENCES Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	12,935	15,724	21.6
Current Liabilities	Rs m	2,202	2,354	6.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	14,369	17,027	18.5
Current assets	Rs m	5,351	5,356	0.1
Fixed Assets	Rs m	9,018	11,671	29.4
Total Assets	Rs m	14,369	17,027	18.5

ERIS LIFESCIENCES Cash Flow Statement Analysis

• ERIS LIFESCIENCES's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion, an improvement of 38.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -824 million, an improvement of 75% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -304 million from the Rs 598 million net cash flows seen during FY20.

ERIS LIFESCIENCES 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	2,712	3,754	38.4%
Cash Flow from Investing Activities	Rs m	1,232	-3,234	-
Cash Flow from Financing Activities	Rs m	-3,346	-824	-
Net Cash Flow	Rs m	598	-304	-

Current Valuations for ERIS LIFESCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.2, an improvement from the EPS of Rs 21.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 604.5, stands at 23.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.2 times, while the price to sales ratio stands at 6.8 times.
• The company's price to cash flow (P/CF) ratio stood at 17.2 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	79.1	89.3
TTM Earnings per share	Rs	21.8	26.2
Diluted earnings per share	Rs	21.8	26.1
Price to Cash Flow	x	14.4	17.2
TTM P/E ratio	x	16.9	23.1
Price / Book Value ratio	x	5.2	4.4
Market Cap	Rs m	67,649	68,637
Dividends per share (Unadj.)	Rs	2.9	5.5

Ratio Analysis for ERIS LIFESCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY21, from 2.4x 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 200.7x during FY21, from 145.3x 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 declined and down at 22.6% during FY21, from 22.9% 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 declined and down at 25.2% during FY21, from 25.8% 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 21.0% during FY21, from 20.8% 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	2.4	2.3
Debtors’ Days	Days	53	42
Interest coverage	x	145.3	200.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	20.8	21.0
Return on equity	%	22.9	22.6
Return on capital employed	%	25.8	25.2

To see how ERIS LIFESCIENCES has performed over the last 5 years, please visit here.

ERIS LIFESCIENCES Share Price Performance

Over the last one year, ERIS LIFESCIENCES share price has moved up from Rs 368.5 to Rs 604.5, registering a gain of Rs 236.0 or around 64.0%.

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 ERIS LIFESCIENCES and quarterly results for ERIS LIFESCIENCES)

Read: Latest Annual Report Analysis of ERIS LIFESCIENCES