ERIS LIFESCIENCES 2022-23 Annual Report Analysis

Thu, 5 Oct

ERIS LIFESCIENCES 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.

ERIS LIFESCIENCES Income Statement Analysis

• Operating income during the year rose 25.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 31.9% in FY23 as against 36.0% in FY22.
• Depreciation charges increased by 81.0% and finance costs increased by 524.4% YoY, respectively.
• Other income declined by 57.3% YoY.
• Net profit for the year declined by 7.8% YoY.
• Net profit margins during the year declined from 30.1% in FY22 to 22.2% in FY23.

ERIS LIFESCIENCES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	13,470	16,851	25.1%
Other income	Rs m	261	112	-57.3%
Total Revenues	Rs m	13,731	16,963	23.5%
Gross profit	Rs m	4,850	5,369	10.7%
Depreciation	Rs m	647	1,171	81.0%
Interest	Rs m	42	263	524.4%
Profit before tax	Rs m	4,422	4,046	-8.5%
Tax	Rs m	364	305	-16.3%
Profit after tax	Rs m	4,058	3,742	-7.8%
Gross profit margin	%	36.0	31.9
Effective tax rate	%	8.2	7.5
Net profit margin	%	30.1	22.2

Revealed: A Potential Huge Investing Opportunity for Investors

ERIS LIFESCIENCES Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 5 billion as compared to Rs 3 billion in FY22, thereby witnessing an increase of 83.9%.
• Long-term debt stood at Rs 6 billion as compared to Rs 450 million during FY22, a growth of 1332.1%.
• Current assets rose 19% and stood at Rs 8 billion, while fixed assets rose 88% and stood at Rs 26 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 35 billion as against Rs 21 billion during FY22, thereby witnessing a growth of 64%.

ERIS LIFESCIENCES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	19,064	21,932	15.0
Current Liabilities	Rs m	2,833	5,212	83.9
Long-term Debt	Rs m	450	6,444	1,332.1
Total Liabilities	Rs m	21,127	34,713	64.3
Current assets	Rs m	7,110	8,427	18.5
Fixed Assets	Rs m	14,017	26,287	87.5
Total Assets	Rs m	21,127	34,713	64.3

ERIS LIFESCIENCES Cash Flow Statement Analysis

• ERIS LIFESCIENCES's cash flow from operating activities (CFO) during FY23 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -10 billion, an improvement of 207.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 7 billion, an improvement of 1,639% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 52 million from the Rs 140 million net cash flows seen during FY22.

ERIS LIFESCIENCES 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	3,783	2,917	-22.9%
Cash Flow from Investing Activities	Rs m	-3,196	-9,821	-
Cash Flow from Financing Activities	Rs m	-447	6,880	-
Net Cash Flow	Rs m	140	52	-63.1%

Current Valuations for ERIS LIFESCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 27.5, an decline from the EPS of Rs 29.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 883.3, stands at 32.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 7.1 times.
• The company's price to cash flow (P/CF) ratio stood at 18.0 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	99.1	123.9
TTM Earnings per share	Rs	29.9	27.5
Diluted earnings per share	Rs	29.8	27.5
Price to Cash Flow	x	19.9	18.0
TTM P/E ratio	x	23.1	32.1
Price / Book Value ratio	x	5.1	4.0
Market Cap	Rs m	97,846	88,446
Dividends per share (Unadj.)	Rs	6.0	7.4

Ratio Analysis for ERIS LIFESCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 2.5x 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 deteriorated and stood at 16.4x during FY23, from 105.8x 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 17.1% during FY23, from 21.3% 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 15.2% during FY23, from 22.9% 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 11.5% during FY23, from 19.4% 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	2.5	1.6
Debtors’ Days	Days	44	63
Interest coverage	x	105.8	16.4
Debt to equity ratio	x	0.0	0.3
Return on assets	%	19.4	11.5
Return on equity	%	21.3	17.1
Return on capital employed	%	22.9	15.2

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 740.1 to Rs 883.3, registering a gain of Rs 143.3 or around 19.4%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 27,930.6 (down 0.3%). Over the last one year it has moved up from 23,712.6 to 27,930.6, a gain of 4,218 points (up 17.8%).

Overall, the S&P BSE SENSEX is up 15.6% over the year.

(To know more, check out historical annual results for ERIS LIFESCIENCES and quarterly results for ERIS LIFESCIENCES)