IPCA LABS 2023-24 Annual Report Analysis

Thu, 18 Jul

IPCA LABS 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.

IPCA LABS Income Statement Analysis

• Operating income during the year fell 1.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.0% in FY24 as against 14.7% in FY23.
• Depreciation charges decreased by 5.8% and finance costs increased by 154.4% YoY, respectively.
• Other income grew by 5.3% YoY.
• Net profit for the year grew by 7.8% YoY.
• Net profit margins during the year grew from 8.0% in FY23 to 8.7% in FY24.

IPCA LABS Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	61,642	60,817	-1.3%
Other income	Rs m	1,518	1,598	5.3%
Total Revenues	Rs m	63,160	62,414	-1.2%
Gross profit	Rs m	9,033	10,315	14.2%
Depreciation	Rs m	2,616	2,465	-5.8%
Interest	Rs m	482	1,226	154.4%
Profit before tax	Rs m	7,453	8,222	10.3%
Tax	Rs m	2,534	2,918	15.2%
Profit after tax	Rs m	4,919	5,304	7.8%
Gross profit margin	%	14.7	17.0
Effective tax rate	%	34.0	35.5
Net profit margin	%	8.0	8.7

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IPCA LABS Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 15 billion as compared to Rs 18 billion in FY23, thereby witnessing an decrease of -15.8%.
• Long-term debt down at Rs 5 billion as compared to Rs 7 billion during FY23, a fall of 16.8%.
• Current assets fell 32% and stood at Rs 35 billion, while fixed assets rose 50% and stood at Rs 51 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 87 billion as against Rs 86 billion during FY23, thereby witnessing a growth of 0%.

IPCA LABS Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	58,420	63,487	8.7
Current Liabilities	Rs m	18,058	15,202	-15.8
Long-term Debt	Rs m	6,518	5,422	-16.8
Total Liabilities	Rs m	86,229	86,593	0.4
Current assets	Rs m	51,893	35,099	-32.4
Fixed Assets	Rs m	34,336	51,494	50.0
Total Assets	Rs m	86,229	86,593	0.4

IPCA LABS Cash Flow Statement Analysis

• IPCA LABS's cash flow from operating activities (CFO) during FY24 stood at Rs 8 billion, an improvement of 3.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -14 billion, an improvement of 86.9% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -5 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -10 billion from the Rs 6 billion net cash flows seen during FY23.

IPCA LABS 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	8,058	8,305	3.1%
Cash Flow from Investing Activities	Rs m	-7,250	-13,552	-
Cash Flow from Financing Activities	Rs m	5,072	-4,649	-
Net Cash Flow	Rs m	5,881	-9,896	-

Current Valuations for IPCA LABS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.9, an improvement from the EPS of Rs 19.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,220.0, stands at 58.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.9 times, while the price to sales ratio stands at 5.1 times.
• The company's price to cash flow (P/CF) ratio stood at 31.6 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	243.0	239.7
TTM Earnings per share	Rs	19.4	20.9
Diluted earnings per share	Rs	19.4	20.9
Price to Cash Flow	x	27.3	31.6
TTM P/E ratio	x	41.8	58.5
Price / Book Value ratio	x	4.0	3.9
Market Cap	Rs m	232,120	245,332
Dividends per share (Unadj.)	Rs	4.0	4.0

Ratio Analysis for IPCA LABS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY24, from 2.9x 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 deteriorated and stood at 7.7x during FY24, from 16.5x 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 8.4% during FY24, from 8.4% 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 13.7% during FY24, from 12.2% 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 7.5% during FY24, from 6.3% 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	2.9	2.3
Debtors’ Days	Days	6	6
Interest coverage	x	16.5	7.7
Debt to equity ratio	x	0.1	0.1
Return on assets	%	6.3	7.5
Return on equity	%	8.4	8.4
Return on capital employed	%	12.2	13.7

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

IPCA LABS Share Price Performance

Over the last one year, IPCA LABS share price has moved up from Rs 793.8 to Rs 1,220.0, registering a gain of Rs 426.3 or around 53.7%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 38,521.2 (down 0.6%). Over the last one year it has moved up from 26,342.4 to 38,521.2, a gain of 12,179 points (up 46.2%).

Overall, the S&P BSE SENSEX is up 21.3% over the year.

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