TORRENT PHARMA 2021-22 Annual Report Analysis

Wed, 6 Jul

TORRENT 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.

TORRENT PHARMA Income Statement Analysis

• Operating income during the year fell 15.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 31.2% in FY22 as against 30.8% in FY21.
• Depreciation charges decreased by 8.4% and finance costs decreased by 34.0% YoY, respectively.
• Other income grew by 169.6% YoY.
• Net profit for the year declined by 20.8% YoY.
• Net profit margins during the year declined from 15.6% in FY21 to 14.7% in FY22.

TORRENT PHARMA Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	80,048	67,423	-15.8%
Other income	Rs m	757	2,042	169.6%
Total Revenues	Rs m	80,806	69,465	-14.0%
Gross profit	Rs m	24,666	21,008	-14.8%
Depreciation	Rs m	6,578	6,024	-8.4%
Interest	Rs m	3,583	2,363	-34.0%
Profit before tax	Rs m	15,263	14,662	-3.9%
Tax	Rs m	2,744	4,748	73.0%
Profit after tax	Rs m	12,519	9,915	-20.8%
Gross profit margin	%	30.8	31.2
Effective tax rate	%	18.0	32.4
Net profit margin	%	15.6	14.7

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TORRENT PHARMA Balance Sheet Analysis

• The company's current liabilities during FY22 down at Rs 24 billion as compared to Rs 49 billion in FY21, thereby witnessing an decrease of -50.5%.
• Long-term debt down at Rs 20 billion as compared to Rs 30 billion during FY21, a fall of 33.5%.
• Current assets fell 26% and stood at Rs 41 billion, while fixed assets fell 13% and stood at Rs 71 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 112 billion as against Rs 137 billion during FY21, thereby witnessing a fall of 18%.

TORRENT PHARMA Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	58,372	63,454	8.7
Current Liabilities	Rs m	48,916	24,234	-50.5
Long-term Debt	Rs m	29,633	19,716	-33.5
Total Liabilities	Rs m	136,530	111,526	-18.3
Current assets	Rs m	55,232	40,601	-26.5
Fixed Assets	Rs m	81,298	70,925	-12.8
Total Assets	Rs m	136,530	111,526	-18.3

TORRENT PHARMA Cash Flow Statement Analysis

• TORRENT PHARMA's cash flow from operating activities (CFO) during FY22 stood at Rs 21 billion, an improvement of 6.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -20 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 31 million from the Rs -893 million net cash flows seen during FY21.

TORRENT 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	20,107	21,401	6.4%
Cash Flow from Investing Activities	Rs m	-4,494	-1,597	-
Cash Flow from Financing Activities	Rs m	-16,561	-19,773	-
Net Cash Flow	Rs m	-893	31	-

Current Valuations for TORRENT PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 58.6, an decline from the EPS of Rs 74.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,898.9, stands at 63.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.7 times, while the price to sales ratio stands at 7.3 times.
• The company's price to cash flow (P/CF) ratio stood at 30.7 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	473.0	398.4
TTM Earnings per share	Rs	74.0	58.6
Diluted earnings per share	Rs	74.0	58.6
Price to Cash Flow	x	22.5	30.7
TTM P/E ratio	x	34.3	63.1
Price / Book Value ratio	x	7.2	7.7
Market Cap	Rs m	420,798	489,231
Dividends per share (Unadj.)	Rs	35.0	48.0

Ratio Analysis for TORRENT PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY22, from 1.1x 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 improved and stood at 7.2x during FY22, from 5.3x 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 15.6% during FY22, from 21.4% 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 20.5% during FY22, from 21.4% 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 11.0% during FY22, from 11.8% 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	1.1	1.7
Debtors’ Days	Days	7	8
Interest coverage	x	5.3	7.2
Debt to equity ratio	x	0.5	0.3
Return on assets	%	11.8	11.0
Return on equity	%	21.4	15.6
Return on capital employed	%	21.4	20.5

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

TORRENT PHARMA Share Price Performance

Over the last one year, TORRENT PHARMA share price has moved down from Rs 2,931.2 to Rs 2,898.9, registering a loss of Rs 32.3 or around 1.1%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,936.1 (up 0.7%). Over the last one year it has moved down from 25,897.7 to 21,936.1, a loss of 3,962 points (down 15.3%).

Overall, the S&P BSE SENSEX is up 1.6% over the year.

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

Read: Latest Annual Report Analysis of TORRENT PHARMA