NATCO PHARMA 2020-21 Annual Report Analysis

Wed, 31 Mar

NATCO PHARMA 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.

NATCO PHARMA Income Statement Analysis

• Operating income during the year rose 7.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 29.4% in FY21 as against 30.4% in FY20.
• Depreciation charges increased by 17.1% and finance costs decreased by 38.1% YoY, respectively.
• Other income declined by 1.3% YoY.
• Net profit for the year declined by 3.4% YoY.
• Net profit margins during the year declined from 23.9% in FY20 to 21.6% in FY21.

NATCO PHARMA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	19,150	20,521	7.2%
Other income	Rs m	1,074	1,060	-1.3%
Total Revenues	Rs m	20,224	21,581	6.7%
Gross profit	Rs m	5,826	6,038	3.6%
Depreciation	Rs m	998	1,169	17.1%
Interest	Rs m	215	133	-38.1%
Profit before tax	Rs m	5,687	5,796	1.9%
Tax	Rs m	1,106	1,372	24.1%
Profit after tax	Rs m	4,581	4,424	-3.4%
Gross profit margin	%	30.4	29.4
Effective tax rate	%	19.4	23.7
Net profit margin	%	23.9	21.6

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NATCO PHARMA Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 5 billion as compared to Rs 7 billion in FY20, thereby witnessing an decrease of -23.3%.
• Long-term debt down at Rs 9 million as compared to Rs 9 million during FY20, a fall of 0.0%.
• Current assets rose 1% and stood at Rs 23 billion, while fixed assets rose 9% and stood at Rs 25 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 48 billion as against Rs 46 billion during FY20, thereby witnessing a growth of 4%.

NATCO PHARMA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	37,500	41,041	9.4
Current Liabilities	Rs m	6,853	5,256	-23.3
Long-term Debt	Rs m	9	9	0.0
Total Liabilities	Rs m	45,878	47,919	4.4
Current assets	Rs m	23,256	23,373	0.5
Fixed Assets	Rs m	22,622	24,546	8.5
Total Assets	Rs m	45,878	47,919	4.4

NATCO PHARMA Cash Flow Statement Analysis

• NATCO PHARMA's cash flow from operating activities (CFO) during FY21 stood at Rs 3 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion, an improvement of 26% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 60 million from the Rs -85 million net cash flows seen during FY20.

NATCO PHARMA 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	4,173	2,988	-28.4%
Cash Flow from Investing Activities	Rs m	-1,670	-1,033	-
Cash Flow from Financing Activities	Rs m	-2,508	-1,857	-
Net Cash Flow	Rs m	-85	60	-

Current Valuations for NATCO PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.3, an decline from the EPS of Rs 25.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 825.2, stands at 34.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.7 times, while the price to sales ratio stands at 7.3 times.
• The company's price to cash flow (P/CF) ratio stood at 24.2 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	105.2	112.5
TTM Earnings per share	Rs	25.2	24.3
Diluted earnings per share	Rs	25.1	24.2
Price to Cash Flow	x	16.6	24.2
TTM P/E ratio	x	20.2	34.0
Price / Book Value ratio	x	2.9	3.3
Market Cap	Rs m	108,130	135,564
Dividends per share (Unadj.)	Rs	6.8	5.3

Ratio Analysis for NATCO PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.4x during FY21, from 3.4x 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 44.6x during FY21, from 27.5x 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 declined and down at 10.8% during FY21, from 12.2% 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 declined and down at 14.4% during FY21, from 15.7% 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 declined and down at 9.5% during FY21, from 10.5% 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	3.4	4.4
Debtors’ Days	Days	105	73
Interest coverage	x	27.5	44.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.5	9.5
Return on equity	%	12.2	10.8
Return on capital employed	%	15.7	14.4

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

NATCO PHARMA Share Price Performance

Over the last one year, NATCO PHARMA share price has moved up from Rs 506.2 to Rs 825.2, registering a gain of Rs 319.0 or around 63.0%.

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 NATCO PHARMA and quarterly results for NATCO PHARMA)

Read: Latest Annual Report Analysis of NATCO PHARMA