GSK PHARMA 2018-19 Annual Report Analysis

Mon, 24 Jun

GSK PHARMA has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

GSK PHARMA Income Statement Analysis

• Operating income during the year rose 8.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 18.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.2% in FY19 as against 17.6% in FY18.
• Depreciation charges increased by 27.9% and finance costs increased by 200.0% YoY, respectively.
• Other income grew by 87.6% YoY.
• Net profit for the year grew by 27.0% YoY.
• Net profit margins during the year grew from 12.0% in FY18 to 13.8% in FY19.

GSK PHARMA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	28,715	31,281	8.9%
Other income	Rs m	545	1,023	87.6%
Total Revenues	Rs m	29,260	32,304	10.4%
Gross profit	Rs m	5,059	6,009	18.8%
Depreciation	Rs m	380	486	27.9%
Interest	Rs m	2	6	200.0%
Profit before tax	Rs m	5,222	6,540	25.2%
Tax	Rs m	1,892	2,373	25.4%
Profit after tax	Rs m	3,508	4,454	27.0%
Gross profit margin	%	17.6	19.2
Effective tax rate	%	36.2	36.3
Net profit margin	%	12.0	13.8

GSK PHARMA Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 15 billion as compared to Rs 16 billion in FY18, thereby witnessing an decrease of -9.1%.
• Long-term debt down at Rs 2 million as compared to Rs 6 million during FY18, a fall of 66.7%.
• Current assets fell 8% and stood at Rs 20 billion, while fixed assets rose 15% and stood at Rs 14 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 39 billion as against Rs 39 billion during FY18, thereby witnessing a fall of 1%.

GSK PHARMA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	20,573	21,398	4.0
Current Liabilities	Rs m	15,999	14,543	-9.1
Long-term Debt	Rs m	6	2	-66.7
Total Liabilities	Rs m	39,475	39,113	-0.9
Current assets	Rs m	21,815	20,061	-8.0
Fixed Assets	Rs m	12,475	14,343	15.0
Total Assets	Rs m	39,475	39,113	-0.9

GSK PHARMA Cash Flow Statement Analysis

• GSK PHARMA's cash flow from operating activities (CFO) during FY19 stood at Rs 4 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -1 billion, an improvement of 37.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -4 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -1 billion from the Rs 620 million net cash flows seen during FY18.

GSK PHARMA Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	4,728	3,994	-15.5%
Cash Flow from Investing Activities	Rs m	-1,042	-1,433	-
Cash Flow from Financing Activities	Rs m	-3,066	-3,584	-
Net Cash Flow	Rs m	620	-1,023	-

Current Valuations for GSK PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.3, an decline from the EPS of Rs 41.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,231.5, stands at 49.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 19.2 times, while the price to sales ratio stands at 13.1 times.
• The company's price to cash flow (P/CF) ratio stood at 42.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	339.0	184.7
TTM Earnings per share	Rs	41.4	26.3
Diluted earnings per share	Rs	20.7	26.3
Price to Cash Flow	x	26.8	42.2
TTM P/E ratio	x	24.5	49.0
Price / Book Value ratio	x	9.9	19.2
Market Cap	Rs m	104,308	208,623
Dividends per share (Unadj.)	Rs	35.0	20.0

Ratio Analysis for GSK PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY19, from 1.4x during FY18. 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 1,091.0x during FY19, from 2,612.0x during FY18. 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 20.8% during FY19, from 17.1% during FY19. 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 31.9% during FY19, from 26.2% during FY18. 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 11.4% during FY19, from 8.9% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	19	14
Interest coverage	x	2,612.0	1,091.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.9	11.4
Return on equity	%	17.1	20.8
Return on capital employed	%	26.2	31.9

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

GSK PHARMA Share Price Performance

Over the last one year, GSK PHARMA share price has moved up from Rs 1,400.5 to Rs 1,231.5, registering a loss of Rs 169.0 or around 12.1%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 12,651.9 (down 0.3%). Over the last one year it has moved down from 14,298.5 to 12,651.9, a loss of 1,647 points (down 11.5%).

Overall, the S&P BSE SENSEX is up 10.4% over the year.

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