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LUPIN 2019-20 Annual Report Analysis

Mon, 7 Dec

LUPIN has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

LUPIN Income Statement Analysis

• Operating income during the year rose 4.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 6.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 16.2% in FY20 as against 18.1% in FY19.
• Depreciation charges increased by 14.7% and finance costs increased by 20.0% YoY, respectively.
• Other income grew by 45.3% YoY.
• Net profit for the year declined by 144.4% YoY.
• Net profit margins during the year declined from 4.0% in FY19 to 1.7% in FY20.

LUPIN Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	146,646	153,748	4.8%
Other income	Rs m	3,330	4,838	45.3%
Total Revenues	Rs m	149,976	158,585	5.7%
Gross profit	Rs m	26,552	24,849	-6.4%
Depreciation	Rs m	8,461	9,702	14.7%
Interest	Rs m	3,025	3,630	20.0%
Profit before tax	Rs m	18,397	16,355	-11.1%
Tax	Rs m	8,879	11,571	30.3%
Profit after tax	Rs m	6,066	-2,694	-144.4%
Gross profit margin	%	18.1	16.2
Effective tax rate	%	48.3	70.8
Net profit margin	%	4.0	-1.7

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LUPIN Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 92 billion as compared to Rs 61 billion in FY19, thereby witnessing an increase of 50.5%.
• Long-term debt down at Rs 18 billion as compared to Rs 66 billion during FY19, a fall of 73.0%.
• Current assets rose 11% and stood at Rs 154 billion, while fixed assets fell 30% and stood at Rs 89 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 250 billion as against Rs 279 billion during FY19, thereby witnessing a fall of 11%.

LUPIN Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	137,422	125,367	-8.8
Current Liabilities	Rs m	61,299	92,252	50.5
Long-term Debt	Rs m	66,417	17,933	-73.0
Total Liabilities	Rs m	279,494	249,839	-10.6
Current assets	Rs m	138,536	154,132	11.3
Fixed Assets	Rs m	127,516	89,082	-30.1
Total Assets	Rs m	279,494	249,839	-10.6

LUPIN Cash Flow Statement Analysis

• LUPIN's cash flow from operating activities (CFO) during FY20 stood at Rs 15 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs 11 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -9 billion on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 17 billion from the Rs -9 billion net cash flows seen during FY19.

LUPIN Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	16,660	14,688	-11.8%
Cash Flow from Investing Activities	Rs m	-32,825	11,070	-
Cash Flow from Financing Activities	Rs m	7,441	-8,906	-
Net Cash Flow	Rs m	-8,724	16,853	-

Current Valuations for LUPIN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -5.9, an decline from the EPS of Rs 13.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 967.5, stands at -268.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 62.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	324.1	339.4
TTM Earnings per share	Rs	13.4	-5.9
Diluted earnings per share	Rs	13.4	-6.0
Price to Cash Flow	x	30.0	62.9
TTM P/E ratio	x	-268.1	-268.2
Price / Book Value ratio	x	2.8	2.5
Market Cap	Rs m	437,784	437,936
Dividends per share (Unadj.)	Rs	5.0	6.0

Ratio Analysis for LUPIN

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.7x during FY20, from 2.3x during FY19. 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 5.5x during FY20, from 7.1x during FY19. 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 -2.1% during FY20, from 4.4% during FY20. 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 8.7% during FY20, from 8.8% during FY19. 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 0.4% during FY20, from 3.3% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	2.3	1.7
Debtors’ Days	Days	128	129
Interest coverage	x	7.1	5.5
Debt to equity ratio	x	0.5	0.1
Return on assets	%	3.3	0.4
Return on equity	%	4.4	-2.1
Return on capital employed	%	8.8	8.7

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

LUPIN Share Price Performance

Over the last one year, LUPIN share price has moved up from Rs 762.8 to Rs 967.5, registering a gain of Rs 204.7 or around 26.8%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,310.7 (up 1.6%). Over the last one year it has moved up from 13,348.7 to 21,310.7, a gain of 7,962 points (up 59.6%).

Overall, the S&P BSE SENSEX is up 11.7% over the year.

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