IPCA LABS 2021-22 Annual Report Analysis

Sun, 17 Jul

IPCA LABS 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.

IPCA LABS Income Statement Analysis

• Operating income during the year rose 7.3% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 15.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.8% in FY22 as against 27.6% in FY21.
• Depreciation charges increased by 11.1% and finance costs decreased by 8.7% YoY, respectively.
• Other income declined by 5.8% YoY.
• Net profit for the year declined by 20.7% YoY.
• Net profit margins during the year declined from 21.4% in FY21 to 15.8% in FY22.

IPCA LABS Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	53,699	57,637	7.3%
Other income	Rs m	1,292	1,217	-5.8%
Total Revenues	Rs m	54,991	58,854	7.0%
Gross profit	Rs m	14,812	12,576	-15.1%
Depreciation	Rs m	2,092	2,324	11.1%
Interest	Rs m	123	112	-8.7%
Profit before tax	Rs m	13,890	11,357	-18.2%
Tax	Rs m	2,401	2,248	-6.4%
Profit after tax	Rs m	11,488	9,110	-20.7%
Gross profit margin	%	27.6	21.8
Effective tax rate	%	17.3	19.8
Net profit margin	%	21.4	15.8

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IPCA LABS Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 15 billion as compared to Rs 12 billion in FY21, thereby witnessing an increase of 26.3%.
• Long-term debt stood at Rs 4 billion as compared to Rs 91 million during FY21, a growth of 4228.4%.
• Current assets rose 30% and stood at Rs 45 billion, while fixed assets rose 21% and stood at Rs 32 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 76 billion as against Rs 61 billion during FY21, thereby witnessing a growth of 26%.

IPCA LABS Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	47,017	54,920	16.8
Current Liabilities	Rs m	11,605	14,659	26.3
Long-term Debt	Rs m	91	3,952	4,228.4
Total Liabilities	Rs m	60,664	76,368	25.9
Current assets	Rs m	34,370	44,572	29.7
Fixed Assets	Rs m	26,295	31,797	20.9
Total Assets	Rs m	60,664	76,368	25.9

IPCA LABS Cash Flow Statement Analysis

• IPCA LABS's cash flow from operating activities (CFO) during FY22 stood at Rs 9 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -9 billion, an improvement of 64.2% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 4 billion, an improvement of 240% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 4 billion from the Rs 3 billion net cash flows seen during FY21.

IPCA LABS 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	10,901	8,560	-21.5%
Cash Flow from Investing Activities	Rs m	-5,207	-8,551	-
Cash Flow from Financing Activities	Rs m	-3,058	4,268	-
Net Cash Flow	Rs m	2,636	4,319	63.8%

Current Valuations for IPCA LABS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 35.9, an decline from the EPS of Rs 90.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 988.8, stands at 27.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 40.9 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	423.3	227.2
TTM Earnings per share	Rs	90.6	35.9
Diluted earnings per share	Rs	45.3	35.9
Price to Cash Flow	x	35.5	40.9
TTM P/E ratio	x	42.0	27.5
Price / Book Value ratio	x	5.2	8.5
Market Cap	Rs m	242,728	467,336
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for IPCA LABS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.0x during FY22, from 3.0x 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 102.4x during FY22, from 114.2x 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 16.6% during FY22, from 24.4% 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 19.5% during FY22, from 29.7% 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 12.1% during FY22, from 19.1% 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	3.0	3.0
Debtors’ Days	Days	6	6
Interest coverage	x	114.2	102.4
Debt to equity ratio	x	0.0	0.1
Return on assets	%	19.1	12.1
Return on equity	%	24.4	16.6
Return on capital employed	%	29.7	19.5

To see how IPCA LABS has performed over the last 5 years, please visit here.

IPCA LABS Share Price Performance

Over the last one year, IPCA LABS share price has moved down from Rs 2,098.0 to Rs 988.8, registering a loss of Rs 1,109.2 or around 52.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 22,591.9 (up 0.2%). Over the last one year it has moved down from 26,307.3 to 22,591.9, a loss of 3,715 points (down 14.1%).

Overall, the S&P BSE SENSEX is up 1.6% over the year.

(To know more, check out historical annual results for IPCA LABS and quarterly results for IPCA LABS)

Read: Latest Annual Report Analysis of IPCA LABS