NATCO PHARMA 2021-22 Annual Report Analysis

Thu, 8 Sep

NATCO PHARMA 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.

NATCO PHARMA Income Statement Analysis

• Operating income during the year fell 5.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 56.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.5% in FY22 as against 29.4% in FY21.
• Depreciation charges increased by 22.0% and finance costs increased by 33.1% YoY, respectively.
• Other income declined by 6.6% YoY.
• Net profit for the year declined by 61.6% YoY.
• Net profit margins during the year declined from 21.6% in FY21 to 8.7% in FY22.

NATCO PHARMA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	20,521	19,448	-5.2%
Other income	Rs m	1,060	990	-6.6%
Total Revenues	Rs m	21,581	20,438	-5.3%
Gross profit	Rs m	6,038	2,635	-56.4%
Depreciation	Rs m	1,169	1,426	22.0%
Interest	Rs m	133	177	33.1%
Profit before tax	Rs m	5,796	2,022	-65.1%
Tax	Rs m	1,372	322	-76.5%
Profit after tax	Rs m	4,424	1,700	-61.6%
Gross profit margin	%	29.4	13.5
Effective tax rate	%	23.7	15.9
Net profit margin	%	21.6	8.7

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NATCO PHARMA Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 7 billion as compared to Rs 5 billion in FY21, thereby witnessing an increase of 35.2%.
• Current assets rose 6% and stood at Rs 25 billion, while fixed assets rose 7% and stood at Rs 26 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 51 billion as against Rs 48 billion during FY21, thereby witnessing a growth of 7%.

NATCO PHARMA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	41,041	42,602	3.8
Current Liabilities	Rs m	5,256	7,104	35.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	47,919	51,091	6.6
Current assets	Rs m	23,448	24,972	6.5
Fixed Assets	Rs m	24,471	26,119	6.7
Total Assets	Rs m	47,919	51,091	6.6

NATCO PHARMA Cash Flow Statement Analysis

• NATCO PHARMA's cash flow from operating activities (CFO) during FY22 stood at Rs 465 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -53 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 348 million, an improvement of 119% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 853 million from the Rs 60 million net cash flows seen during FY21.

NATCO PHARMA 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	2,988	465	-84.4%
Cash Flow from Investing Activities	Rs m	-1,033	-53	-
Cash Flow from Financing Activities	Rs m	-1,857	348	-
Net Cash Flow	Rs m	60	853	1,321.7%

Current Valuations for NATCO PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.3, an decline from the EPS of Rs 24.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 607.3, stands at 26.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 5.7 times.
• The company's price to cash flow (P/CF) ratio stood at 56.6 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	112.5	106.6
TTM Earnings per share	Rs	24.3	9.3
Diluted earnings per share	Rs	24.2	9.3
Price to Cash Flow	x	26.9	56.6
TTM P/E ratio	x	34.0	26.7
Price / Book Value ratio	x	3.3	4.2
Market Cap	Rs m	135,564	176,990
Dividends per share (Unadj.)	Rs	5.3	4.5

Ratio Analysis for NATCO PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.5x during FY22, from 4.5x 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 12.4x during FY22, from 44.6x 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 4.0% during FY22, from 10.8% 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 5.2% during FY22, from 14.4% 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 3.7% during FY22, from 9.5% 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	4.5	3.5
Debtors’ Days	Days	73	116
Interest coverage	x	44.6	12.4
Debt to equity ratio	x	0.0	0.0
Return on assets	%	9.5	3.7
Return on equity	%	10.8	4.0
Return on capital employed	%	14.4	5.2

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

NATCO PHARMA Share Price Performance

Over the last one year, NATCO PHARMA share price has moved down from Rs 974.1 to Rs 607.3, registering a loss of Rs 366.8 or around 37.7%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 23,086.8 (up 0.1%). Over the last one year it has moved down from 26,535.4 to 23,086.8, a loss of 3,449 points (down 13.0%).

Overall, the S&P BSE SENSEX is up 2.4% over the year.

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

Read: Latest Annual Report Analysis of NATCO PHARMA