GLENMARK PHARMA 2018-19 Annual Report Analysis

Sun, 31 Mar

GLENMARK PHARMA 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.

GLENMARK PHARMA Income Statement Analysis

• Operating income during the year rose 9.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 8.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 17.8% in FY19 as against 17.9% in FY18.
• Depreciation charges increased by 8.0% and finance costs increased by 17.2% YoY, respectively.
• Other income grew by 127.7% YoY.
• Net profit for the year grew by 15.1% YoY.
• Net profit margins during the year grew from 8.9% in FY18 to 9.4% in FY19.

GLENMARK PHARMA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	90,458	98,655	9.1%
Other income	Rs m	914	2,081	127.7%
Total Revenues	Rs m	91,372	100,736	10.2%
Gross profit	Rs m	16,154	17,530	8.5%
Depreciation	Rs m	3,019	3,259	8.0%
Interest	Rs m	2,856	3,346	17.2%
Profit before tax	Rs m	11,193	13,006	16.2%
Tax	Rs m	3,155	3,756	19.1%
Profit after tax	Rs m	8,039	9,250	15.1%
Gross profit margin	%	17.9	17.8
Effective tax rate	%	28.2	28.9
Net profit margin	%	8.9	9.4

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GLENMARK PHARMA Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 40 billion as compared to Rs 33 billion in FY18, thereby witnessing an increase of 22.3%.
• Long-term debt down at Rs 36 billion as compared to Rs 41 billion during FY18, a fall of 13.7%.
• Current assets fell 4% and stood at Rs 67 billion, while fixed assets rose 22% and stood at Rs 52 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 119 billion as against Rs 113 billion during FY18, thereby witnessing a growth of 6%.

GLENMARK PHARMA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	51,530	55,946	8.6
Current Liabilities	Rs m	32,879	40,211	22.3
Long-term Debt	Rs m	41,418	35,738	-13.7
Total Liabilities	Rs m	112,751	119,058	5.6
Current assets	Rs m	69,887	66,968	-4.2
Fixed Assets	Rs m	42,864	52,090	21.5
Total Assets	Rs m	112,751	119,058	5.6

GLENMARK PHARMA Cash Flow Statement Analysis

• GLENMARK PHARMA's cash flow from operating activities (CFO) during FY19 stood at Rs 13 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -7 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -7 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -3 billion from the Rs 2 billion net cash flows seen during FY18.

GLENMARK PHARMA 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	16,481	13,242	-19.7%
Cash Flow from Investing Activities	Rs m	-10,133	-6,990	-
Cash Flow from Financing Activities	Rs m	-4,685	-7,387	-
Net Cash Flow	Rs m	1,770	-2,971	-

Current Valuations for GLENMARK PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 32.8, an improvement from the EPS of Rs 28.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 645.6, stands at 19.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.3 times, while the price to sales ratio stands at 1.8 times.
• The company's price to cash flow (P/CF) ratio stood at 13.5 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	320.6	349.6
TTM Earnings per share	Rs	28.5	32.8
Diluted earnings per share	Rs	28.5	32.8
Price to Cash Flow	x	13.5	13.5
TTM P/E ratio	x	18.5	19.7
Price / Book Value ratio	x	4.0	3.0
Market Cap	Rs m	204,205	168,617
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 1.7x during FY19, from 2.1x 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 4.9x during FY19, from 4.9x 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 16.5% during FY19, from 15.6% 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 17.8% during FY19, from 15.1% 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 10.6% during FY19, from 9.7% 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	2.1	1.7
Debtors’ Days	Days	94	81
Interest coverage	x	4.9	4.9
Debt to equity ratio	x	0.8	0.6
Return on assets	%	9.7	10.6
Return on equity	%	15.6	16.5
Return on capital employed	%	15.1	17.8

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 up from Rs 527.2 to Rs 645.6, registering a gain of Rs 118.4 or around 22.5%.

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 GLENMARK PHARMA and quarterly results for GLENMARK PHARMA)

Read: Latest Annual Report Analysis of GLENMARK PHARMA