SUN PHARMA 2017-18 Annual Report Analysis

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SUN PHARMA 2017-18 Annual Report Analysis
Thu, 20 Dec

SUN PHARMA has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

SUN PHARMA Income Statement Analysis

  • Operating income during the year fell 16.1% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 44.4% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 21.2% in FY18 as against 31.9% in FY17.
  • Depreciation charges increased by 18.6% and finance costs increased by 29.5% YoY, respectively.
  • Other income grew by 34.6% YoY.
  • Net profit for the year declined by 66.4% YoY.
  • Net profit margins during the year declined from 24.3% in FY17 to 9.6% in FY18.

SUN PHARMA Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 315,784 264,895 -16.1%
Other income Rs m 6,232 8,388 34.6%
Total Revenues Rs m 322,016 273,282 -15.1%
Gross profit Rs m 100,893 56,081 -44.4%
Depreciation Rs m 12,648 14,998 18.6%
Interest Rs m 3,998 5,176 29.5%
Profit before tax Rs m 90,479 44,295 -51.0%
Tax Rs m 12,116 8,452 -30.2%
Profit after tax Rs m 78,363 26,338 -66.4%
Gross profit margin % 31.9 21.2
Effective tax rate % 13.4 19.1
Net profit margin % 24.3 9.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SUN PHARMA Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 199 billion as compared to Rs 179 billion in FY17, thereby witnessing an increase of 11.1%.
  • Long-term debt stood at Rs 18 billion as compared to Rs 14 billion during FY17, a growth of 23.4%.
  • Current assets fell 4% and stood at Rs 316 billion, while fixed assets rose 4% and stood at Rs 213 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 643 billion as against Rs 614 billion during FY17, thereby witnessing a growth of 5%.

SUN PHARMA Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 366,397 381,006 4.0
 
Current Liabilities Rs m 178,870 198,643 11.1
Long-term Debt Rs m 14,361 17,721 23.4
Total Liabilities Rs m 614,102 643,028 4.7
 
Current assets Rs m 329,537 316,359 -4.0
Fixed Assets Rs m 204,766 213,178 4.1
Total Assets Rs m 614,102 643,028 4.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SUN PHARMA Cash Flow Statement Analysis

  • SUN PHARMA's cash flow from operating activities (CFO) during FY18 stood at Rs 39 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -34 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -15 billion, an improvement of 33% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -7 billion from the Rs 6 billion net cash flows seen during FY17.

SUN PHARMA Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 70,822 39,072 -44.8%
Cash Flow from Investing Activities Rs m -42,216 -33,708 -
Cash Flow from Financing Activities Rs m -22,854 -15,393 -
Net Cash Flow Rs m 6,107 -7,359 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for SUN PHARMA

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 11.0, an decline from the EPS of Rs 32.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 426.5, stands at 34.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.6 times, while the price to sales ratio stands at 5.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 24.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 131.6 110.4
TTM Earnings per share Rs 32.7 11.0
Diluted earnings per share Rs 32.6 10.9
Price to Cash Flow x 11.2 24.8
TTM P/E ratio x 34.6 34.7
Price / Book Value ratio x 4.6 3.6
Market Cap Rs m 1,023,164 1,026,360
Dividends per share (Unadj.) Rs 3.5 2.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for SUN PHARMA

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.6x during FY18, from 1.8x during FY17. 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 9.6x during FY18, from 23.6x during FY17. 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 6.9% during FY18, from 21.4% during FY18. 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 10.0% during FY18, from 24.8% during FY17. 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 4.9% during FY18, from 13.4% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 1.8 1.6
Debtors’ Days Days 83 108
Interest coverage x 23.6 9.6
Debt to equity ratio x 0.0 0.0
Return on assets % 13.4 4.9
Return on equity % 21.4 6.9
Return on capital employed % 24.8 10.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

SUN PHARMA Share Price Performance

Over the last one year, SUN PHARMA share price has moved up from Rs 527.2 to Rs 426.5, registering a loss of Rs 100.7 or around 19.1%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 13,925.9 (up 0.4%). Over the last one year it has moved down from 14,298.2 to 13,925.9, a loss of 372 points (down 2.6%).

Overall, the S&P BSE SENSEX is up 7.4% over the year.

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

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For the quarter ended December 2019, SUN PHARMA has posted a net profit of Rs 10 bn (down 29.8% YoY). Sales on the other hand came in at Rs 82 bn (up 5.4% YoY). Read on for a complete analysis of SUN PHARMA's quarterly results.

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SUN PHARMA 2018-19 Annual Report Analysis (Annual Result Update)

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Here's an analysis of the annual report of SUN PHARMA for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of SUN PHARMA. Also includes updates on the valuation of SUN PHARMA.

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