AARTI DRUGS 2023-24 Annual Report Analysis

Mon, 2 Sep

AARTI DRUGS has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

AARTI DRUGS Income Statement Analysis

• Operating income during the year fell 6.9% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 12.7% in FY24 as against 11.4% in FY23.
• Depreciation charges increased by 2.2% and finance costs increased by 2.0% YoY, respectively.
• Other income grew by 83.7% YoY.
• Net profit for the year grew by 3.1% YoY.
• Net profit margins during the year grew from 6.1% in FY23 to 6.8% in FY24.

AARTI DRUGS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	27,161	25,286	-6.9%
Other income	Rs m	22	40	83.7%
Total Revenues	Rs m	27,182	25,326	-6.8%
Gross profit	Rs m	3,095	3,208	3.7%
Depreciation	Rs m	503	514	2.2%
Interest	Rs m	371	379	2.0%
Profit before tax	Rs m	2,242	2,355	5.1%
Tax	Rs m	578	639	10.6%
Profit after tax	Rs m	1,664	1,716	3.1%
Gross profit margin	%	11.4	12.7
Effective tax rate	%	25.8	27.1
Net profit margin	%	6.1	6.8

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AARTI DRUGS Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 8 billion as compared to Rs 9 billion in FY23, thereby witnessing an decrease of -16.2%.
• Long-term debt stood at Rs 3 billion as compared to Rs 2 billion during FY23, a growth of 34.5%.
• Current assets fell 11% and stood at Rs 13 billion, while fixed assets rose 20% and stood at Rs 11 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 24 billion as against Rs 24 billion during FY23, thereby witnessing a growth of 0%.

AARTI DRUGS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	11,924	12,815	7.5
Current Liabilities	Rs m	9,495	7,955	-16.2
Long-term Debt	Rs m	2,047	2,753	34.5
Total Liabilities	Rs m	24,214	24,324	0.5
Current assets	Rs m	14,918	13,207	-11.5
Fixed Assets	Rs m	9,296	11,116	19.6
Total Assets	Rs m	24,214	24,324	0.5

AARTI DRUGS Cash Flow Statement Analysis

• AARTI DRUGS's cash flow from operating activities (CFO) during FY24 stood at Rs 4 billion, an improvement of 169.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -2 billion, an improvement of 36.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -1 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -8 million from the Rs -141 million net cash flows seen during FY23.

AARTI DRUGS Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	1,333	3,589	169.2%
Cash Flow from Investing Activities	Rs m	-1,640	-2,237	-
Cash Flow from Financing Activities	Rs m	165	-1,360	-
Net Cash Flow	Rs m	-141	-8	-

Current Valuations for AARTI DRUGS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.7, an improvement from the EPS of Rs 18.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 586.5, stands at 34.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 2.1 times.
• The company's price to cash flow (P/CF) ratio stood at 20.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	293.3	275.0
TTM Earnings per share	Rs	18.0	18.7
Diluted earnings per share	Rs	18.1	18.7
Price to Cash Flow	x	14.3	20.2
TTM P/E ratio	x	18.7	34.4
Price / Book Value ratio	x	3.3	3.5
Market Cap	Rs m	39,003	45,096
Dividends per share (Unadj.)	Rs	1.0	1.0

Ratio Analysis for AARTI DRUGS

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during FY24, from 1.6x during FY23. 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 7.2x during FY24, from 7.0x during FY23. 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 13.4% during FY24, from 14.0% during FY24. 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 17.6% during FY24, from 18.7% during FY23. 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 FY24, from 8.4% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.6	1.7
Debtors’ Days	Days	1,162	1,017
Interest coverage	x	7.0	7.2
Debt to equity ratio	x	0.2	0.2
Return on assets	%	8.4	8.6
Return on equity	%	14.0	13.4
Return on capital employed	%	18.7	17.6

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

AARTI DRUGS Share Price Performance

Over the last one year, AARTI DRUGS share price has moved up from Rs 570.4 to Rs 586.5, registering a gain of Rs 16.2 or around 2.8%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 43,213.1 (up 0.1%). Over the last one year it has moved up from 27,726.0 to 43,213.1, a gain of 15,487 points (up 55.9%).

Overall, the S&P BSE SENSEX is up 26.9% over the year.

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