NEULAND LABS 2019-20 Annual Report Analysis

Wed, 2 Sep

NEULAND LABS has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

NEULAND LABS Income Statement Analysis

• Operating income during the year rose 14.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 74.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.4% in FY20 as against 8.8% in FY19.
• Depreciation charges increased by 21.0% and finance costs increased by 37.7% YoY, respectively.
• Other income grew by 11.3% YoY.
• Net profit for the year declined by 1.4% YoY.
• Net profit margins during the year declined from 2.5% in FY19 to 2.1% in FY20.

NEULAND LABS Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	6,668	7,627	14.4%
Other income	Rs m	35	39	11.3%
Total Revenues	Rs m	6,703	7,666	14.4%
Gross profit	Rs m	584	1,019	74.6%
Depreciation	Rs m	259	313	21.0%
Interest	Rs m	157	216	37.7%
Profit before tax	Rs m	203	529	160.2%
Tax	Rs m	39	367	842.5%
Profit after tax	Rs m	164	162	-1.4%
Gross profit margin	%	8.8	13.4
Effective tax rate	%	19.1	69.4
Net profit margin	%	2.5	2.1

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NEULAND LABS Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 4 billion as compared to Rs 3 billion in FY19, thereby witnessing an increase of 9.4%.
• Long-term debt stood at Rs 774 million as compared to Rs 607 million during FY19, a growth of 27.4%.
• Current assets rose 14% and stood at Rs 5 billion, while fixed assets rose 8% and stood at Rs 4 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 12 billion as against Rs 11 billion during FY19, thereby witnessing a growth of 9%.

NEULAND LABS Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	6,993	7,100	1.5
Current Liabilities	Rs m	3,270	3,576	9.4
Long-term Debt	Rs m	607	774	27.4
Total Liabilities	Rs m	11,304	12,310	8.9
Current assets	Rs m	4,535	5,152	13.6
Fixed Assets	Rs m	3,665	3,969	8.3
Total Assets	Rs m	11,304	12,310	8.9

NEULAND LABS Cash Flow Statement Analysis

• NEULAND LABS's cash flow from operating activities (CFO) during FY20 stood at Rs 573 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -487 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs -55 million on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 33 million from the Rs 47 million net cash flows seen during FY19.

NEULAND LABS Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	699	573	-18.0%
Cash Flow from Investing Activities	Rs m	-772	-487	-
Cash Flow from Financing Activities	Rs m	120	-55	-
Net Cash Flow	Rs m	47	33	-29.9%

Current Valuations for NEULAND LABS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 12.6, an decline from the EPS of Rs 12.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,011.1, stands at 51.2 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.8 times.
• The company's price to cash flow (P/CF) ratio stood at 27.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	519.7	594.5
TTM Earnings per share	Rs	12.8	12.6
Diluted earnings per share	Rs	12.8	12.6
Price to Cash Flow	x	30.7	27.3
TTM P/E ratio	x	51.2	51.2
Price / Book Value ratio	x	1.2	0.9
Market Cap	Rs m	12,972	12,971
Dividends per share (Unadj.)	Rs	1.2	2.0

Ratio Analysis for NEULAND LABS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.4x during FY20, from 1.4x during FY19. 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 3.5x during FY20, from 2.3x during FY19. 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 2.3% during FY20, from 2.4% during FY20. 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 9.5% during FY20, from 4.7% during FY19. 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 3.1% during FY20, from 2.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	1.4	1.4
Debtors’ Days	Days	90	91
Interest coverage	x	2.3	3.5
Debt to equity ratio	x	0.1	0.1
Return on assets	%	2.8	3.1
Return on equity	%	2.4	2.3
Return on capital employed	%	4.7	9.5

To see how NEULAND LABS has performed over the last 5 years, please visit here.

NEULAND LABS Share Price Performance

Over the last one year, NEULAND LABS share price has moved up from Rs 461.3 to Rs 1,011.1, registering a gain of Rs 549.8 or around 119.2%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 18,890.8 (up 0.8%). Over the last one year it has moved up from 12,875.4 to 18,890.8, a gain of 6,015 points (up 46.7%).

Overall, the S&P BSE SENSEX is up 6.9% over the year.

(To know more, check out historical annual results for NEULAND LABS and quarterly results for NEULAND LABS)