SUN PHARMA 2020-21 Annual Report Analysis

Wed, 31 Mar

SUN 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.

SUN PHARMA Income Statement Analysis

• Operating income during the year rose 2.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 38.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.4% in FY21 as against 20.4% in FY20.
• Depreciation charges increased by 1.3% and finance costs decreased by 53.3% YoY, respectively.
• Other income grew by 31.9% YoY.
• Net profit for the year declined by 45.4% YoY.
• Net profit margins during the year declined from 12.8% in FY20 to 6.8% in FY21.

SUN PHARMA Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	328,375	334,981	2.0%
Other income	Rs m	6,516	8,592	31.9%
Total Revenues	Rs m	334,891	343,573	2.6%
Gross profit	Rs m	67,135	41,616	-38.0%
Depreciation	Rs m	20,528	20,800	1.3%
Interest	Rs m	3,027	1,414	-53.3%
Profit before tax	Rs m	50,096	27,994	-44.1%
Tax	Rs m	8,228	5,147	-37.4%
Profit after tax	Rs m	41,868	22,847	-45.4%
Gross profit margin	%	20.4	12.4
Effective tax rate	%	16.4	18.4
Net profit margin	%	12.8	6.8

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SUN PHARMA Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 161 billion as compared to Rs 157 billion in FY20, thereby witnessing an increase of 2.8%.
• Long-term debt down at Rs 9 billion as compared to Rs 20 billion during FY20, a fall of 55.7%.
• Current assets fell 4% and stood at Rs 304 billion, while fixed assets rose 1% and stood at Rs 337 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 641 billion as against Rs 651 billion during FY20, thereby witnessing a fall of 1%.

SUN PHARMA Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	452,645	464,628	2.6
Current Liabilities	Rs m	157,064	161,456	2.8
Long-term Debt	Rs m	20,289	8,981	-55.7
Total Liabilities	Rs m	650,772	641,103	-1.5
Current assets	Rs m	316,542	304,421	-3.8
Fixed Assets	Rs m	334,230	336,682	0.7
Total Assets	Rs m	650,772	641,103	-1.5

SUN PHARMA Cash Flow Statement Analysis

• SUN PHARMA's cash flow from operating activities (CFO) during FY21 stood at Rs 62 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs 5 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -60 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs 6 billion from the Rs -14 billion net cash flows seen during FY20.

SUN 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	65,548	61,704	-5.9%
Cash Flow from Investing Activities	Rs m	-25,888	5,362	-
Cash Flow from Financing Activities	Rs m	-57,151	-59,805	-
Net Cash Flow	Rs m	-13,857	5,964	-

Current Valuations for SUN PHARMA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 9.5, an decline from the EPS of Rs 17.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 597.6, stands at 62.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 4.3 times.
• The company's price to cash flow (P/CF) ratio stood at 27.3 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	136.9	139.6
TTM Earnings per share	Rs	17.4	9.5
Diluted earnings per share	Rs	17.4	9.5
Price to Cash Flow	x	13.5	27.3
TTM P/E ratio	x	20.2	62.8
Price / Book Value ratio	x	2.1	2.6
Market Cap	Rs m	958,894	1,190,430
Dividends per share (Unadj.)	Rs	4.0	7.5

Ratio Analysis for SUN PHARMA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.9x during FY21, from 2.0x 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 20.8x during FY21, from 17.5x 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 4.9% during FY21, from 9.2% 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 6.2% during FY21, from 11.2% 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 3.8% during FY21, from 6.9% 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	2.0	1.9
Debtors’ Days	Days	105	99
Interest coverage	x	17.5	20.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	6.9	3.8
Return on equity	%	9.2	4.9
Return on capital employed	%	11.2	6.2

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 up from Rs 352.2 to Rs 597.6, registering a gain of Rs 245.4 or around 69.7%.

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 SUN PHARMA and quarterly results for SUN PHARMA)

Read: Latest Annual Report Analysis of SUN PHARMA