SUN PHARMA 2022-23 Annual Report Analysis

Wed, 2 Aug

SUN 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.

SUN PHARMA Income Statement Analysis

• Operating income during the year rose 13.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 112.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.7% in FY23 as against 13.7% in FY22.
• Depreciation charges increased by 18.0% and finance costs increased by 35.1% YoY, respectively.
• Other income declined by 43.0% YoY.
• Net profit for the year grew by 151.4% YoY.
• Net profit margins during the year grew from 8.8% in FY22 to 19.5% in FY23.

SUN PHARMA Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	386,545	438,857	13.5%
Other income	Rs m	14,374	8,199	-43.0%
Total Revenues	Rs m	400,919	447,055	11.5%
Gross profit	Rs m	53,150	112,900	112.4%
Depreciation	Rs m	21,437	25,294	18.0%
Interest	Rs m	1,274	1,720	35.1%
Profit before tax	Rs m	44,813	94,084	109.9%
Tax	Rs m	10,755	8,476	-21.2%
Profit after tax	Rs m	34,058	85,608	151.4%
Gross profit margin	%	13.7	25.7
Effective tax rate	%	24.0	9.0
Net profit margin	%	8.8	19.5

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SUN PHARMA Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 199 billion as compared to Rs 172 billion in FY22, thereby witnessing an increase of 15.7%.
• Current assets rose 14% and stood at Rs 399 billion, while fixed assets rose 17% and stood at Rs 377 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 776 billion as against Rs 670 billion during FY22, thereby witnessing a growth of 16%.

SUN PHARMA Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	480,112	559,954	16.6
Current Liabilities	Rs m	172,085	199,064	15.7
Long-term Debt	Rs m	2,299	0	-100.0
Total Liabilities	Rs m	669,582	775,794	15.9
Current assets	Rs m	348,646	398,619	14.3
Fixed Assets	Rs m	320,936	376,960	17.5
Total Assets	Rs m	669,582	775,794	15.9

SUN PHARMA Cash Flow Statement Analysis

• SUN PHARMA's cash flow from operating activities (CFO) during FY23 stood at Rs 50 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -79 billion, an improvement of 38.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 24 billion, an improvement of 146% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 1 billion from the Rs -18 billion net cash flows seen during FY22.

SUN 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	89,845	49,593	-44.8%
Cash Flow from Investing Activities	Rs m	-57,247	-79,437	-
Cash Flow from Financing Activities	Rs m	-51,935	23,761	-
Net Cash Flow	Rs m	-17,648	1,155	-

Current Valuations for SUN PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 35.7, an improvement from the EPS of Rs 14.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,138.8, stands at 31.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.9 times, while the price to sales ratio stands at 6.2 times.
• The company's price to cash flow (P/CF) ratio stood at 20.1 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	161.1	182.9
TTM Earnings per share	Rs	14.2	35.7
Diluted earnings per share	Rs	14.2	35.7
Price to Cash Flow	x	39.6	20.1
TTM P/E ratio	x	64.4	31.9
Price / Book Value ratio	x	3.8	4.0
Market Cap	Rs m	1,827,693	2,233,361
Dividends per share (Unadj.)	Rs	10.0	11.5

Ratio Analysis for SUN PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY23, from 2.0x 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 improved and stood at 55.7x during FY23, from 36.2x 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 improved and stood at 15.3% during FY23, from 7.1% 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 improved and stood at 17.1% during FY23, from 9.6% 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 improved and stood at 11.3% during FY23, from 5.3% 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	2.0	2.0
Debtors’ Days	Days	99	95
Interest coverage	x	36.2	55.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.3	11.3
Return on equity	%	7.1	15.3
Return on capital employed	%	9.6	17.1

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 916.8 to Rs 1,138.8, registering a gain of Rs 222.0 or around 24.2%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 27,485.7 (down 0.6%). Over the last one year it has moved up from 22,962.3 to 27,485.7, a gain of 4,523 points (up 19.7%).

Overall, the S&P BSE SENSEX is up 13.2% over the year.

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