NATCO PHARMA 2023-24 Annual Report Analysis

Mon, 9 Sep

NATCO PHARMA 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.

NATCO PHARMA Income Statement Analysis

• Operating income during the year rose 47.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 92.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 43.8% in FY24 as against 33.7% in FY23.
• Depreciation charges increased by 14.0% and finance costs increased by 32.4% YoY, respectively.
• Other income declined by 0.3% YoY.
• Net profit for the year grew by 94.1% YoY.
• Net profit margins during the year grew from 26.4% in FY23 to 34.7% in FY24.

NATCO PHARMA Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	27,071	39,988	47.7%
Other income	Rs m	1,285	1,281	-0.3%
Total Revenues	Rs m	28,356	41,269	45.5%
Gross profit	Rs m	9,117	17,514	92.1%
Depreciation	Rs m	1,638	1,868	14.0%
Interest	Rs m	145	192	32.4%
Profit before tax	Rs m	8,619	16,735	94.2%
Tax	Rs m	1,466	2,852	94.5%
Profit after tax	Rs m	7,153	13,883	94.1%
Gross profit margin	%	33.7	43.8
Effective tax rate	%	17.0	17.0
Net profit margin	%	26.4	34.7

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NATCO PHARMA Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 10 billion as compared to Rs 7 billion in FY23, thereby witnessing an increase of 42.4%.
• Current assets rose 34% and stood at Rs 40 billion, while fixed assets rose 8% and stood at Rs 29 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 69 billion as against Rs 57 billion during FY23, thereby witnessing a growth of 22%.

NATCO PHARMA Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	48,738	58,531	20.1
Current Liabilities	Rs m	6,831	9,728	42.4
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	56,574	68,869	21.7
Current assets	Rs m	30,003	40,235	34.1
Fixed Assets	Rs m	26,571	28,634	7.8
Total Assets	Rs m	56,574	68,869	21.7

NATCO PHARMA Cash Flow Statement Analysis

• NATCO PHARMA's cash flow from operating activities (CFO) during FY24 stood at Rs 12 billion, an improvement of 42.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -10 billion, an improvement of 116.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -2 billion, an improvement of 32% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -615 million from the Rs 208 million net cash flows seen during FY23.

NATCO PHARMA 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	8,491	12,116	42.7%
Cash Flow from Investing Activities	Rs m	-4,771	-10,327	-
Cash Flow from Financing Activities	Rs m	-3,630	-2,469	-
Net Cash Flow	Rs m	208	-615	-

Current Valuations for NATCO PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 77.5, an improvement from the EPS of Rs 39.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,551.1, stands at 17.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 6.9 times.
• The company's price to cash flow (P/CF) ratio stood at 9.4 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	148.4	223.3
TTM Earnings per share	Rs	39.2	77.5
Diluted earnings per share	Rs	39.9	77.5
Price to Cash Flow	x	11.5	9.4
TTM P/E ratio	x	14.1	17.0
Price / Book Value ratio	x	2.5	2.5
Market Cap	Rs m	123,049	148,509
Dividends per share (Unadj.)	Rs	5.5	9.5

Ratio Analysis for NATCO PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 4.1x during FY24, from 4.4x 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 88.2x during FY24, from 60.4x 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 23.7% during FY24, from 14.7% 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 28.9% during FY24, from 18.0% 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 20.4% during FY24, from 12.9% 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	4.4	4.1
Debtors’ Days	Days	115	109
Interest coverage	x	60.4	88.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	12.9	20.4
Return on equity	%	14.7	23.7
Return on capital employed	%	18.0	28.9

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 881.4 to Rs 1,551.1, registering a gain of Rs 669.7 or around 76.0%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 43,362.5 (down 0.2%). Over the last one year it has moved up from 28,280.7 to 43,362.5, a gain of 15,082 points (up 53.3%).

Overall, the S&P BSE SENSEX is up 24.0% over the year.

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