LUPIN 2018-19 Annual Report Analysis

Sun, 31 Mar

LUPIN has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

LUPIN Income Statement Analysis

• Operating income during the year rose 6.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 38.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.9% in FY19 as against 10.7% in FY18.
• Depreciation charges decreased by 22.1% and finance costs increased by 48.0% YoY, respectively.
• Other income grew by 121.5% YoY.
• Net profit for the year grew by 140.1% YoY.
• Net profit margins during the year grew from 1.6% in FY18 to 3.7% in FY19.

LUPIN Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	157,765	167,514	6.2%
Other income	Rs m	1,504	3,330	121.5%
Total Revenues	Rs m	159,269	170,844	7.3%
Gross profit	Rs m	16,832	23,290	38.4%
Depreciation	Rs m	10,859	8,461	-22.1%
Interest	Rs m	2,044	3,025	48.0%
Profit before tax	Rs m	5,433	15,134	178.6%
Tax	Rs m	2,885	9,017	212.6%
Profit after tax	Rs m	2,548	6,117	140.1%
Gross profit margin	%	10.7	13.9
Effective tax rate	%	53.1	59.6
Net profit margin	%	1.6	3.7

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LUPIN Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 61 billion as compared to Rs 51 billion in FY18, thereby witnessing an increase of 20.3%.
• Long-term debt stood at Rs 66 billion as compared to Rs 64 billion during FY18, a growth of 3.4%.
• Current assets rose 13% and stood at Rs 139 billion, while fixed assets fell 0% and stood at Rs 134 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 272 billion as against Rs 256 billion during FY18, thereby witnessing a growth of 6%.

LUPIN Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	133,657	135,238	1.2
Current Liabilities	Rs m	50,956	61,299	20.3
Long-term Debt	Rs m	64,245	66,417	3.4
Total Liabilities	Rs m	255,888	272,154	6.4
Current assets	Rs m	122,095	138,536	13.5
Fixed Assets	Rs m	133,793	133,618	-0.1
Total Assets	Rs m	255,888	272,154	6.4

LUPIN Cash Flow Statement Analysis

• LUPIN's cash flow from operating activities (CFO) during FY19 stood at Rs 17 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -33 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs 7 billion, an improvement of 150% on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -9 billion from the Rs 7 billion net cash flows seen during FY18.

LUPIN Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	17,512	16,660	-4.9%
Cash Flow from Investing Activities	Rs m	4,699	-32,825	-
Cash Flow from Financing Activities	Rs m	-14,921	7,441	-
Net Cash Flow	Rs m	7,290	-8,724	-

Current Valuations for LUPIN

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.5, an improvement from the EPS of Rs 5.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 739.1, stands at 55.5 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 2.0 times.
• The company's price to cash flow (P/CF) ratio stood at 26.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	349.0	370.2
TTM Earnings per share	Rs	5.6	13.5
Diluted earnings per share	Rs	5.6	13.5
Price to Cash Flow	x	25.0	26.5
TTM P/E ratio	x	24.9	55.5
Price / Book Value ratio	x	3.7	2.9
Market Cap	Rs m	495,505	386,068
Dividends per share (Unadj.)	Rs	5.0	5.0

Ratio Analysis for LUPIN

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.3x during FY19, from 2.4x during FY18. 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 6.0x during FY19, from 3.7x during FY18. 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 4.5% during FY19, from 1.9% during FY19. 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 9.0% during FY19, from 3.8% during FY18. 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 3.4% during FY19, from 1.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.4	2.3
Debtors’ Days	Days	120	112
Interest coverage	x	3.7	6.0
Debt to equity ratio	x	0.5	0.5
Return on assets	%	1.8	3.4
Return on equity	%	1.9	4.5
Return on capital employed	%	3.8	9.0

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 up from Rs 736.4 to Rs 739.1, registering a gain of Rs 2.7 or around 0.4%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 14,407.9 (up 1.4%). Over the last one year it has moved up from 13,157.6 to 14,407.9, a gain of 1,250 points (up 9.5%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

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

Read: Latest Annual Report Analysis of LUPIN