SUN PHARMA 2018-19 Annual Report Analysis

Sun, 31 Mar

SUN PHARMA 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.

SUN PHARMA Income Statement Analysis

• Operating income during the year rose 10.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 17.4% in FY19 as against 17.4% in FY18.
• Depreciation charges increased by 16.9% and finance costs increased by 7.3% YoY, respectively.
• Other income grew by 16.2% YoY.
• Net profit for the year grew by 25.0% YoY.
• Net profit margins during the year grew from 9.7% in FY18 to 11.0% in FY19.

SUN PHARMA Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	263,416	290,659	10.3%
Other income	Rs m	9,121	10,594	16.2%
Total Revenues	Rs m	272,537	301,254	10.5%
Gross profit	Rs m	45,843	50,593	10.4%
Depreciation	Rs m	14,998	17,533	16.9%
Interest	Rs m	5,176	5,553	7.3%
Profit before tax	Rs m	34,790	38,102	9.5%
Tax	Rs m	9,110	6,009	-34.0%
Profit after tax	Rs m	25,679	32,093	25.0%
Gross profit margin	%	17.4	17.4
Effective tax rate	%	26.2	15.8
Net profit margin	%	9.7	11.0

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SUN PHARMA Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 173 billion as compared to Rs 199 billion in FY18, thereby witnessing an decrease of -12.7%.
• Long-term debt down at Rs 15 billion as compared to Rs 18 billion during FY18, a fall of 14.1%.
• Current assets fell 2% and stood at Rs 311 billion, while fixed assets rose 2% and stood at Rs 311 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 621 billion as against Rs 621 billion during FY18, thereby witnessing a growth of 0%.

SUN PHARMA Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	383,141	414,091	8.1
Current Liabilities	Rs m	198,643	173,396	-12.7
Long-term Debt	Rs m	17,721	15,226	-14.1
Total Liabilities	Rs m	621,090	621,389	0.0
Current assets	Rs m	316,359	310,692	-1.8
Fixed Assets	Rs m	304,731	310,698	2.0
Total Assets	Rs m	621,090	621,389	0.0

SUN PHARMA Cash Flow Statement Analysis

• SUN PHARMA's cash flow from operating activities (CFO) during FY19 stood at Rs 22 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -7 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -27 billion on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -8 billion from the Rs -7 billion net cash flows seen during FY18.

SUN PHARMA 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	39,072	21,965	-43.8%
Cash Flow from Investing Activities	Rs m	-33,708	-6,813	-
Cash Flow from Financing Activities	Rs m	-15,393	-27,305	-
Net Cash Flow	Rs m	-7,359	-8,442	-

Current Valuations for SUN PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 13.4, an improvement from the EPS of Rs 10.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 479.3, stands at 36.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 25.5 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	109.8	121.1
TTM Earnings per share	Rs	10.7	13.4
Diluted earnings per share	Rs	10.7	13.4
Price to Cash Flow	x	29.2	25.5
TTM P/E ratio	x	45.1	36.1
Price / Book Value ratio	x	3.5	3.1
Market Cap	Rs m	1,360,056	1,264,689
Dividends per share (Unadj.)	Rs	2.0	2.8

Ratio Analysis for SUN PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during FY19, from 1.6x 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 7.9x during FY19, from 7.7x 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 7.8% during FY19, from 6.7% 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 10.2% during FY19, from 10.0% 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 6.1% during FY19, from 5.0% 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	1.6	1.8
Debtors’ Days	Days	108	112
Interest coverage	x	7.7	7.9
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.0	6.1
Return on equity	%	6.7	7.8
Return on capital employed	%	10.0	10.2

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

SUN PHARMA Share Price Performance

Over the last one year, SUN PHARMA share price has moved down from Rs 495.4 to Rs 479.3, registering a loss of Rs 16.2 or around 3.3%.

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 SUN PHARMA and quarterly results for SUN PHARMA)

Read: Latest Annual Report Analysis of SUN PHARMA