SUVEN LIFE 2017-18 Annual Report Analysis

Sat, 31 Mar

SUVEN LIFE SCIENCES 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.

SUVEN LIFE SCIENCES Income Statement Analysis

• Operating income during the year rose 15.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 56.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 32.3% in FY18 as against 23.8% in FY17.
• Depreciation charges increased by 15.6% and finance costs decreased by 18.6% YoY, respectively.
• Other income grew by 10.3% YoY.
• Net profit for the year grew by 41.9% YoY.
• Net profit margins during the year grew from 16.1% in FY17 to 19.8% in FY18.

SUVEN LIFE SCIENCES Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	5,426	6,253	15.2%
Other income	Rs m	211	233	10.3%
Total Revenues	Rs m	5,637	6,485	15.1%
Gross profit	Rs m	1,291	2,016	56.2%
Depreciation	Rs m	214	248	15.6%
Interest	Rs m	57	46	-18.6%
Profit before tax	Rs m	1,231	1,955	58.9%
Tax	Rs m	359	718	100.2%
Profit after tax	Rs m	872	1,237	41.9%
Gross profit margin	%	23.8	32.3
Effective tax rate	%	29.2	36.7
Net profit margin	%	16.1	19.8

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SUVEN LIFE SCIENCES Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 2 billion as compared to Rs 2 billion in FY17, thereby witnessing an increase of 8.5%.
• Long-term debt down at Rs 22 million as compared to Rs 259 million during FY17, a fall of 91.4%.
• Current assets rose 16% and stood at Rs 7 billion, while fixed assets rose 9% and stood at Rs 3 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 10 billion as against Rs 9 billion during FY17, thereby witnessing a growth of 13%.

SUVEN LIFE SCIENCES Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	6,670	7,674	15.1
Current Liabilities	Rs m	2,081	2,258	8.5
Long-term Debt	Rs m	259	22	-91.4
Total Liabilities	Rs m	9,033	10,234	13.3
Current assets	Rs m	5,812	6,738	15.9
Fixed Assets	Rs m	3,221	3,496	8.5
Total Assets	Rs m	9,033	10,234	13.3

SUVEN LIFE SCIENCES Cash Flow Statement Analysis

• SUVEN LIFE SCIENCES's cash flow from operating activities (CFO) during FY18 stood at Rs 699 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -6 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -521 million on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 173 million from the Rs -2 billion net cash flows seen during FY17.

SUVEN LIFE SCIENCES 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	1,092	699	-35.9%
Cash Flow from Investing Activities	Rs m	-3,106	-6	-
Cash Flow from Financing Activities	Rs m	-304	-521	-
Net Cash Flow	Rs m	-2,319	173	-

Current Valuations for SUVEN LIFE SCIENCES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.7, an improvement from the EPS of Rs 6.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 167.8, stands at 15.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 3.4 times.
• The company's price to cash flow (P/CF) ratio stood at 17.4 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	42.6	49.1
TTM Earnings per share	Rs	6.9	9.7
Diluted earnings per share	Rs	6.0	8.5
Price to Cash Flow	x	22.2	17.4
TTM P/E ratio	x	19.5	15.4
Price / Book Value ratio	x	3.6	3.4
Market Cap	Rs m	24,158	25,826
Dividends per share (Unadj.)	Rs	1.0	1.5

Ratio Analysis for SUVEN LIFE SCIENCES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.0x during FY18, from 2.8x 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 improved and stood at 43.2x during FY18, from 22.7x 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 improved and stood at 16.1% during FY18, from 13.1% 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 improved and stood at 26.0% during FY18, from 18.6% 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 improved and stood at 12.5% during FY18, from 10.3% 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	2.8	3.0
Debtors’ Days	Days	308	359
Interest coverage	x	22.7	43.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.3	12.5
Return on equity	%	13.1	16.1
Return on capital employed	%	18.6	26.0

To see how SUVEN LIFE SCIENCES has performed over the last 5 years, please visit here.

SUVEN LIFE SCIENCES Share Price Performance

Over the last one year, SUVEN LIFE SCIENCES share price has moved up from Rs 165.7 to Rs 167.8, registering a gain of Rs 2.2 or around 1.3%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 13,157.6 (down 1.1%). Over the last one year it has moved down from 15,312.4 to 13,157.6, a loss of 2,155 points (down 14.1%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for SUVEN LIFE SCIENCES and quarterly results for SUVEN LIFE SCIENCES)

Read: Latest Annual Report Analysis of SUVEN LIFE SCIENCES