ZIM LABORATORIES 2022-23 Annual Report Analysis

Tue, 20 Jun

ZIM LABORATORIES 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.

ZIM LABORATORIES Income Statement Analysis

• Operating income during the year rose 19.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.9% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.0% in FY23 as against 12.3% in FY22.
• Depreciation charges increased by 9.0% and finance costs decreased by 32.9% YoY, respectively.
• Other income grew by 45.7% YoY.
• Net profit for the year grew by 67.9% YoY.
• Net profit margins during the year grew from 4.4% in FY22 to 6.1% in FY23.

ZIM LABORATORIES Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	3,334	3,985	19.5%
Other income	Rs m	44	64	45.7%
Total Revenues	Rs m	3,378	4,049	19.9%
Gross profit	Rs m	410	520	26.9%
Depreciation	Rs m	160	175	9.0%
Interest	Rs m	83	56	-32.9%
Profit before tax	Rs m	210	354	68.0%
Tax	Rs m	65	109	68.2%
Profit after tax	Rs m	146	244	67.9%
Gross profit margin	%	12.3	13.0
Effective tax rate	%	30.9	30.9
Net profit margin	%	4.4	6.1

RESPONSE PENDING: Your Meeting with Tanushree Banerjee Tomorrow...

ZIM LABORATORIES Balance Sheet Analysis

• The company's current liabilities during FY23 down at Rs 1 billion as compared to Rs 1 billion in FY22, thereby witnessing an decrease of -24.8%.
• Long-term debt stood at Rs 246 million as compared to Rs 189 million during FY22, a growth of 30.1%.
• Current assets fell 11% and stood at Rs 2 billion, while fixed assets rose 21% and stood at Rs 2 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 3 billion as against Rs 3 billion during FY22, thereby witnessing a growth of 1%.

ZIM LABORATORIES Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,757	2,003	14.0
Current Liabilities	Rs m	1,474	1,108	-24.8
Long-term Debt	Rs m	189	246	30.1
Total Liabilities	Rs m	3,431	3,479	1.4
Current assets	Rs m	2,136	1,909	-10.6
Fixed Assets	Rs m	1,295	1,569	21.2
Total Assets	Rs m	3,431	3,479	1.4

ZIM LABORATORIES Cash Flow Statement Analysis

• ZIM LABORATORIES's cash flow from operating activities (CFO) during FY23 stood at Rs 375 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -362 million, an improvement of 148.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs 5 million, an improvement of 102% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 30 million from the Rs 20 million net cash flows seen during FY22.

ZIM LABORATORIES 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	492	375	-23.7%
Cash Flow from Investing Activities	Rs m	-146	-362	-
Cash Flow from Financing Activities	Rs m	-330	5	-
Net Cash Flow	Rs m	20	30	47.9%

Current Valuations for ZIM LABORATORIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.0, an decline from the EPS of Rs 9.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 114.5, stands at 22.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 26.5 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	205.3	81.8
TTM Earnings per share	Rs	9.0	5.0
Diluted earnings per share	Rs	3.0	5.0
Price to Cash Flow	x	25.5	26.5
TTM P/E ratio	x	53.5	22.8
Price / Book Value ratio	x	1.2	5.5
Market Cap	Rs m	2,108	11,096
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ZIM LABORATORIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY23, from 1.4x 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 7.3x during FY23, from 3.5x 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 12.2% during FY23, from 8.3% 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 18.2% during FY23, from 15.1% 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 improved and stood at 8.6% during FY23, from 6.7% 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	1.4	1.7
Debtors’ Days	Days	980	872
Interest coverage	x	3.5	7.3
Debt to equity ratio	x	0.1	0.1
Return on assets	%	6.7	8.6
Return on equity	%	8.3	12.2
Return on capital employed	%	15.1	18.2

To see how ZIM LABORATORIES has performed over the last 5 years, please visit here.

ZIM LABORATORIES Share Price Performance

Over the last one year, ZIM LABORATORIES share price has moved down from Rs 197.0 to Rs 114.5, registering a loss of Rs 82.6 or around 41.9%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 25,087.5 (down 0.1%). Over the last one year it has moved up from 21,043.0 to 25,087.5, a gain of 4,044 points (up 19.2%).

Overall, the S&P BSE SENSEX is up 22.6% over the year.

(To know more, check out historical annual results for ZIM LABORATORIES and quarterly results for ZIM LABORATORIES)