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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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)