ALKEM LABORATORIES 2023-24 Annual Report Analysis

Mon, 29 Jul

ALKEM LABORATORIES 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.

ALKEM LABORATORIES Income Statement Analysis

• Operating income during the year fell 16.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 26.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.5% in FY24 as against 13.0% in FY23.
• Depreciation charges decreased by 21.3% and finance costs decreased by 23.7% YoY, respectively.
• Other income grew by 41.6% YoY.
• Net profit for the year grew by 73.5% YoY.
• Net profit margins during the year grew from 8.7% in FY23 to 17.9% in FY24.

ALKEM LABORATORIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	115,993	97,477	-16.0%
Other income	Rs m	2,161	3,060	41.6%
Total Revenues	Rs m	118,153	100,537	-14.9%
Gross profit	Rs m	15,065	19,013	26.2%
Depreciation	Rs m	3,104	2,444	-21.3%
Interest	Rs m	1,074	819	-23.7%
Profit before tax	Rs m	13,048	18,810	44.2%
Tax	Rs m	2,980	1,339	-55.1%
Profit after tax	Rs m	10,068	17,472	73.5%
Gross profit margin	%	13.0	19.5
Effective tax rate	%	22.8	7.1
Net profit margin	%	8.7	17.9

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ALKEM LABORATORIES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 31 billion as compared to Rs 37 billion in FY23, thereby witnessing an decrease of -16.2%.
• Current assets fell 7% and stood at Rs 80 billion, while fixed assets rose 26% and stood at Rs 47 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 128 billion as against Rs 125 billion during FY23, thereby witnessing a growth of 2%.

ALKEM LABORATORIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	90,447	105,546	16.7
Current Liabilities	Rs m	37,071	31,064	-16.2
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	124,541	127,511	2.4
Current assets	Rs m	86,064	80,401	-6.6
Fixed Assets	Rs m	37,245	47,111	26.5
Total Assets	Rs m	124,541	127,511	2.4

ALKEM LABORATORIES Cash Flow Statement Analysis

• ALKEM LABORATORIES's cash flow from operating activities (CFO) during FY24 stood at Rs 17 billion, an improvement of 0.2% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -9 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -10 billion, an improvement of 46% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -1 billion from the Rs 416 million net cash flows seen during FY23.

ALKEM LABORATORIES 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	16,825	16,866	0.2%
Cash Flow from Investing Activities	Rs m	1,128	-8,656	-
Cash Flow from Financing Activities	Rs m	-17,608	-9,590	-
Net Cash Flow	Rs m	416	-1,381	-

Current Valuations for ALKEM LABORATORIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 146.1, an improvement from the EPS of Rs 84.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 5,286.4, stands at 34.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 6.0 times, while the price to sales ratio stands at 6.5 times.
• The company's price to cash flow (P/CF) ratio stood at 26.2 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	970.1	815.2
TTM Earnings per share	Rs	84.2	146.1
Diluted earnings per share	Rs	84.2	146.1
Price to Cash Flow	x	30.8	26.2
TTM P/E ratio	x	40.4	34.9
Price / Book Value ratio	x	4.3	4.9
Market Cap	Rs m	386,207	521,910
Dividends per share (Unadj.)	Rs	50.0	40.0

Ratio Analysis for ALKEM LABORATORIES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.6x during FY24, from 2.3x 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 24.0x during FY24, from 13.2x 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 improved and stood at 16.6% during FY24, from 11.1% 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 improved and stood at 18.6% during FY24, from 15.6% 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 14.3% during FY24, from 8.9% 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	2.3	2.6
Debtors’ Days	Days	67	66
Interest coverage	x	13.2	24.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.9	14.3
Return on equity	%	11.1	16.6
Return on capital employed	%	15.6	18.6

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

ALKEM LABORATORIES Share Price Performance

Over the last one year, ALKEM LABORATORIES share price has moved up from Rs 3,996.8 to Rs 5,286.4, registering a gain of Rs 1,289.7 or around 32.3%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 40,166.7 (down 0.0%). Over the last one year it has moved up from 27,747.1 to 40,166.7, a gain of 12,420 points (up 44.8%).

Overall, the S&P BSE SENSEX is up 23.1% over the year.

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