HIKAL. 2020-21 Annual Report Analysis

Wed, 31 Mar

HIKAL. has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

HIKAL. Income Statement Analysis

• Operating income during the year rose 14.1% on a year-on-year (YoY) basis.
• The company's operating profit increased by 25.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.8% in FY21 as against 17.1% in FY20.
• Depreciation charges increased by 3.4% and finance costs decreased by 30.9% YoY, respectively.
• Other income grew by 34.6% YoY.
• Net profit for the year grew by 57.7% YoY.
• Net profit margins during the year grew from 5.6% in FY20 to 7.7% in FY21.

HIKAL. Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	15,073	17,204	14.1%
Other income	Rs m	37	50	34.6%
Total Revenues	Rs m	15,110	17,254	14.2%
Gross profit	Rs m	2,578	3,229	25.3%
Depreciation	Rs m	825	852	3.4%
Interest	Rs m	524	362	-30.9%
Profit before tax	Rs m	1,266	2,064	63.1%
Tax	Rs m	421	733	73.9%
Profit after tax	Rs m	844	1,331	57.7%
Gross profit margin	%	17.1	18.8
Effective tax rate	%	33.3	35.5
Net profit margin	%	5.6	7.7

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HIKAL. Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 7 billion as compared to Rs 7 billion in FY20, thereby witnessing an increase of 7.7%.
• Long-term debt down at Rs 3 billion as compared to Rs 3 billion during FY20, a fall of 13.4%.
• Current assets rose 11% and stood at Rs 9 billion, while fixed assets rose 4% and stood at Rs 11 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 20 billion as against Rs 19 billion during FY20, thereby witnessing a growth of 7%.

HIKAL. Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	8,165	9,334	14.3
Current Liabilities	Rs m	6,528	7,033	7.7
Long-term Debt	Rs m	3,034	2,629	-13.4
Total Liabilities	Rs m	18,794	20,157	7.3
Current assets	Rs m	8,312	9,251	11.3
Fixed Assets	Rs m	10,482	10,906	4.0
Total Assets	Rs m	18,794	20,157	7.3

HIKAL. Cash Flow Statement Analysis

• HIKAL.'s cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -2 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -969 million, an improvement of 4% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -240 million from the Rs 203 million net cash flows seen during FY20.

HIKAL. Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	2,849	2,290	-19.6%
Cash Flow from Investing Activities	Rs m	-1,638	-1,562	-
Cash Flow from Financing Activities	Rs m	-1,009	-969	-
Net Cash Flow	Rs m	203	-240	-

Current Valuations for HIKAL.

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.8, an improvement from the EPS of Rs 6.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 143.5, stands at 13.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 1.0 times.
• The company's price to cash flow (P/CF) ratio stood at 7.7 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	122.2	139.5
TTM Earnings per share	Rs	6.8	10.8
Diluted earnings per share	Rs	6.8	10.8
Price to Cash Flow	x	5.2	7.7
TTM P/E ratio	x	10.2	13.3
Price / Book Value ratio	x	1.8	1.8
Market Cap	Rs m	15,052	16,738
Dividends per share (Unadj.)	Rs	1.2	2.0

Ratio Analysis for HIKAL.

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.3x during FY21, from 1.3x during FY20. 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 6.7x during FY21, from 3.4x during FY20. 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 14.3% during FY21, from 10.3% during FY21. 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 20.3% during FY21, from 16.0% during FY20. 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 8.4% during FY21, from 7.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	1.3	1.3
Debtors’ Days	Days	82	103
Interest coverage	x	3.4	6.7
Debt to equity ratio	x	0.4	0.3
Return on assets	%	7.3	8.4
Return on equity	%	10.3	14.3
Return on capital employed	%	16.0	20.3

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

HIKAL. Share Price Performance

Over the last one year, HIKAL. share price has moved up from Rs 70.0 to Rs 143.5, registering a gain of Rs 73.5 or around 105.0%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 21,328.2 (up 0.4%). Over the last one year it has moved up from 12,148.6 to 21,328.2, a gain of 9,180 points (up 75.6%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of HIKAL.