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LUPIN LTD 2017-18 Annual Report Analysis
Sat, 31 Mar

LUPIN has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

LUPIN Income Statement Analysis

  • Operating income during the year fell 9.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 62.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.7% in FY18 as against 25.8% in FY17.
  • Depreciation charges increased by 19.0% and finance costs increased by 34.0% YoY, respectively.
  • Other income grew by 41.2% YoY.
  • Net profit for the year declined by 90.0% YoY.
  • Net profit margins during the year declined from 14.7% in FY17 to 1.6% in FY18.

LUPIN Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 173,857 157,765 -9.3%
Other income Rs m 1,065 1,504 41.2%
Total Revenues Rs m 174,922 159,269 -8.9%
Gross profit Rs m 44,931 16,832 -62.5%
Depreciation Rs m 9,122 10,859 19.0%
Interest Rs m 1,525 2,044 34.0%
Profit before tax Rs m 35,349 5,433 -84.6%
Tax Rs m 9,785 2,885 -70.5%
Profit after tax Rs m 25,564 2,548 -90.0%
Gross profit margin % 25.8 10.7
Effective tax rate % 27.7 53.1
Net profit margin % 14.7 1.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Enclosed: Invitation to Access Our Latest Research Project

LUPIN Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 51 billion as compared to Rs 61 billion in FY17, thereby witnessing an decrease of -16.7%.
  • Long-term debt stood at Rs 64 billion as compared to Rs 56 billion during FY17, a growth of 13.8%.
  • Current assets rose 2% and stood at Rs 122 billion, while fixed assets fell 5% and stood at Rs 134 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 256 billion as against Rs 261 billion during FY17, thereby witnessing a fall of 2%.

LUPIN Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 133,238 133,657 0.3
 
Current Liabilities Rs m 61,206 50,956 -16.7
Long-term Debt Rs m 56,478 64,245 13.8
Total Liabilities Rs m 260,996 255,888 -2.0
 
Current assets Rs m 119,529 122,095 2.1
Fixed Assets Rs m 141,467 133,793 -5.4
Total Assets Rs m 260,996 255,888 -2.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



LUPIN Cash Flow Statement Analysis

  • LUPIN's cash flow from operating activities (CFO) during FY18 stood at Rs 18 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 5 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -15 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 7 billion from the Rs 20 billion net cash flows seen during FY17.

LUPIN Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 41,135 17,512 -57.4%
Cash Flow from Investing Activities Rs m -25,274 4,699 -
Cash Flow from Financing Activities Rs m 4,332 -14,921 -
Net Cash Flow Rs m 20,193 7,290 -63.9%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for LUPIN

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.6, an decline from the EPS of Rs 56.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 736.4, stands at 24.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 2.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 37.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 385.0 349.0
TTM Earnings per share Rs 56.6 5.6
Diluted earnings per share Rs 56.2 5.6
Price to Cash Flow x 18.9 37.0
TTM P/E ratio x 25.7 24.9
Price / Book Value ratio x 5.3 3.7
Market Cap Rs m 707,508 495,505
Dividends per share (Unadj.) Rs 7.5 5.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for LUPIN

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.4x during FY18, from 2.0x during FY17. 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 3.7x during FY18, from 24.2x during FY17. 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 1.9% during FY18, from 19.2% during FY18. 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 3.8% during FY18, from 19.4% during FY17. 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 1.8% during FY18, from 10.4% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 2.0 2.4
Debtors’ Days Days 90 120
Interest coverage x 24.2 3.7
Debt to equity ratio x 0.4 0.5
Return on assets % 10.4 1.8
Return on equity % 19.2 1.9
Return on capital employed % 19.4 3.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

LUPIN Share Price Performance

Over the last one year, LUPIN share price has moved down from Rs 1,444.8 to Rs 736.4, registering a loss of Rs 708.4 or around 49.0%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 13,157.6 (down 1.1%). Over the last one year it has moved down from 15,312.4 to 13,157.6, a loss of 2,155 points (down 14.1%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Annual Report FAQs

What is the current share price of LUPIN?

LUPIN currently trades at Rs 682.3 per share. You can check out the latest share price performance of LUPIN here...

What was the revenue of LUPIN in FY18? How does it compare to earlier years?

The revenues of LUPIN stood at Rs 159,269 m in FY18, which was down -8.9% compared to Rs 174,922 m reported in FY17.

LUPIN's revenue has grown from Rs 113,226 m in FY14 to Rs 159,269 m in FY18.

Over the past 5 years, the revenue of LUPIN has grown at a CAGR of 8.9%.

What was the net profit of LUPIN in FY18? How does it compare to earlier years?

The net profit of LUPIN stood at Rs 2,548 m in FY18, which was down -90.0% compared to Rs 25,564 m reported in FY17.

This compares to a net profit of Rs 22,646 m in FY16 and a net profit of Rs 24,444 m in FY15.

Over the past 5 years, LUPIN net profit has grown at a CAGR of -39.2%.

What does the cash flow statement of LUPIN reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of LUPIN reveals:

  • Cash flow from operations decreased in FY18 and stood at Rs 17,512 m as compared to Rs 41,135 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs 4,699 m as compared to Rs -25,274 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -14,921 m as compared to Rs 4,332 m in FY17.

Here's the cash flow statement of LUPIN for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations20,03927,331-3,82441,13517,512
From Investments-8,585-10,545-69,617-25,2744,699
From Financial Activity-8,571-1,96958,3644,332-14,921
Net Cashflow2,95715,018-13,14820,1937,290

What does the Key Ratio analysis of LUPIN reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of LUPIN reveals:

  • Operating profit margins witnessed a fall and stood at 10.7% in FY18 as against 25.8% in FY17.
  • Net profit margins declined from 14.7% in FY17 to 1.6% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.5 as compared to 0.4 in FY17.

Here's the ratio/financial analysis of LUPIN for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)26.828.626.325.810.7
Net Profit Margin (%)16.719.316.114.71.6
Debt to Equity Ratio (x)0.00.00.50.40.5

Read: Latest Annual Report Analysis of LUPIN

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