GLENMARK PHARMA 2017-18 Annual Report Analysis

Sat, 31 Mar

GLENMARK PHARMA has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

GLENMARK PHARMA Income Statement Analysis

• Operating income during the year rose 0.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 17.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.9% in FY18 as against 21.8% in FY17.
• Depreciation charges increased by 14.2% and finance costs increased by 20.3% YoY, respectively.
• Other income grew by 144.6% YoY.
• Net profit for the year declined by 27.5% YoY.
• Net profit margins during the year declined from 12.4% in FY17 to 8.9% in FY18.

GLENMARK PHARMA Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	89,731	90,458	0.8%
Other income	Rs m	374	914	144.6%
Total Revenues	Rs m	90,105	91,372	1.4%
Gross profit	Rs m	19,558	16,154	-17.4%
Depreciation	Rs m	2,644	3,019	14.2%
Interest	Rs m	2,373	2,856	20.3%
Profit before tax	Rs m	14,914	11,193	-24.9%
Tax	Rs m	3,827	3,155	-17.6%
Profit after tax	Rs m	11,088	8,039	-27.5%
Gross profit margin	%	21.8	17.9
Effective tax rate	%	25.7	28.2
Net profit margin	%	12.4	8.9

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GLENMARK PHARMA Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 33 billion as compared to Rs 27 billion in FY17, thereby witnessing an increase of 21.7%.
• Long-term debt down at Rs 41 billion as compared to Rs 45 billion during FY17, a fall of 8.7%.
• Current assets rose 2% and stood at Rs 70 billion, while fixed assets rose 20% and stood at Rs 43 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 113 billion as against Rs 105 billion during FY17, thereby witnessing a growth of 8%.

GLENMARK PHARMA Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	44,911	51,530	14.7
Current Liabilities	Rs m	27,027	32,879	21.7
Long-term Debt	Rs m	45,363	41,418	-8.7
Total Liabilities	Rs m	104,526	112,751	7.9
Current assets	Rs m	68,746	69,887	1.7
Fixed Assets	Rs m	35,780	42,864	19.8
Total Assets	Rs m	104,526	112,751	7.9

GLENMARK PHARMA Cash Flow Statement Analysis

• GLENMARK PHARMA's cash flow from operating activities (CFO) during FY18 stood at Rs 16 billion, an improvement of 150.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -10 billion, an improvement of 42.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 2 billion from the Rs 2 billion net cash flows seen during FY17.

GLENMARK PHARMA Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	6,574	16,481	150.7%
Cash Flow from Investing Activities	Rs m	-7,123	-10,133	-
Cash Flow from Financing Activities	Rs m	5,432	-4,685	-
Net Cash Flow	Rs m	1,992	1,770	-11.2%

Current Valuations for GLENMARK PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 28.5, an decline from the EPS of Rs 39.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 527.2, stands at 18.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.9 times, while the price to sales ratio stands at 1.6 times.
• The company's price to cash flow (P/CF) ratio stood at 18.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	318.0	320.6
TTM Earnings per share	Rs	39.3	28.5
Diluted earnings per share	Rs	39.3	28.5
Price to Cash Flow	x	17.6	18.5
TTM P/E ratio	x	22.2	18.5
Price / Book Value ratio	x	5.4	4.0
Market Cap	Rs m	242,989	204,205
Dividends per share (Unadj.)	Rs	2.0	2.0

Ratio Analysis for GLENMARK PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY18, from 2.5x during FY17. 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 4.9x during FY18, from 7.3x during FY17. 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 15.6% during FY18, from 24.7% during FY18. 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 15.1% during FY18, from 19.1% during FY17. 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 9.7% during FY18, from 12.9% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	2.5	2.1
Debtors’ Days	Days	98	94
Interest coverage	x	7.3	4.9
Debt to equity ratio	x	1.0	0.8
Return on assets	%	12.9	9.7
Return on equity	%	24.7	15.6
Return on capital employed	%	19.1	15.1

To see how GLENMARK PHARMA has performed over the last 5 years, please visit here.

GLENMARK PHARMA Share Price Performance

Over the last one year, GLENMARK PHARMA share price has moved down from Rs 857.8 to Rs 527.2, registering a loss of Rs 330.6 or around 38.5%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 13,157.6 (down 1.1%). Over the last one year it has moved down from 15,312.4 to 13,157.6, a loss of 2,155 points (down 14.1%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for GLENMARK PHARMA and quarterly results for GLENMARK PHARMA)

Read: Latest Annual Report Analysis of GLENMARK PHARMA