SMS PHARMA 2022-23 Annual Report Analysis

Fri, 31 Mar

SMS PHARMA has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

SMS PHARMA Income Statement Analysis

• Operating income during the year rose 1.2% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 52.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.1% in FY23 as against 23.6% in FY22.
• Depreciation charges decreased by 0.1% and finance costs increased by 14.7% YoY, respectively.
• Other income declined by 6.0% YoY.
• Net profit for the year declined by 94.3% YoY.
• Net profit margins during the year declined from 14.0% in FY22 to 0.8% in FY23.

SMS PHARMA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,858	4,914	1.2%
Other income	Rs m	52	49	-6.0%
Total Revenues	Rs m	4,910	4,963	1.1%
Gross profit	Rs m	1,146	546	-52.4%
Depreciation	Rs m	322	321	-0.1%
Interest	Rs m	192	220	14.7%
Profit before tax	Rs m	685	53	-92.2%
Tax	Rs m	6	15	137.1%
Profit after tax	Rs m	679	39	-94.3%
Gross profit margin	%	23.6	11.1
Effective tax rate	%	0.9	27.4
Net profit margin	%	14.0	0.8

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SMS PHARMA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 3 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 20.6%.
• Long-term debt down at Rs 1 billion as compared to Rs 1 billion during FY22, a fall of 19.0%.
• Current assets rose 5% and stood at Rs 4 billion, while fixed assets fell 3% and stood at Rs 5 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 9 billion as against Rs 9 billion during FY22, thereby witnessing a growth of 1%.

SMS PHARMA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,703	4,605	-2.1
Current Liabilities	Rs m	2,115	2,550	20.6
Long-term Debt	Rs m	1,495	1,211	-19.0
Total Liabilities	Rs m	8,745	8,797	0.6
Current assets	Rs m	3,921	4,107	4.8
Fixed Assets	Rs m	4,825	4,690	-2.8
Total Assets	Rs m	8,745	8,797	0.6

SMS PHARMA Cash Flow Statement Analysis

• SMS PHARMA's cash flow from operating activities (CFO) during FY23 stood at Rs 225 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -297 million, an improvement of 9.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -320 million on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -392 million from the Rs 62 million net cash flows seen during FY22.

SMS PHARMA Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	451	225	-50.2%
Cash Flow from Investing Activities	Rs m	-272	-297	-
Cash Flow from Financing Activities	Rs m	-117	-320	-
Net Cash Flow	Rs m	62	-392	-

Current Valuations for SMS PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.5, an decline from the EPS of Rs 8.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 57.8, stands at 125.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 19.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	57.4	58.1
TTM Earnings per share	Rs	8.0	0.5
Diluted earnings per share	Rs	8.0	0.5
Price to Cash Flow	x	7.9	19.3
TTM P/E ratio	x	11.8	125.9
Price / Book Value ratio	x	2.6	1.5
Market Cap	Rs m	12,027	6,967
Dividends per share (Unadj.)	Rs	0.3	0.3

Ratio Analysis for SMS PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during FY23, from 1.9x during FY22. 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 1.2x during FY23, from 4.6x during FY22. 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 0.8% during FY23, from 14.4% during FY23. 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 4.7% during FY23, from 14.1% during FY22. 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 2.9% during FY23, from 10.0% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	1.9	1.6
Debtors’ Days	Days	365	1,102
Interest coverage	x	4.6	1.2
Debt to equity ratio	x	0.3	0.3
Return on assets	%	10.0	2.9
Return on equity	%	14.4	0.8
Return on capital employed	%	14.1	4.7

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

SMS PHARMA Share Price Performance

Over the last one year, SMS PHARMA share price has moved down from Rs 93.8 to Rs 57.8, registering a loss of Rs 36.0 or around 38.4%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,883.5 (up 0.4%). Over the last one year it has moved down from 24,303.8 to 21,883.5, a loss of 2,420 points (down 10.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

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