ZIM LABORATORIES 2023-24 Annual Report Analysis

Mon, 10 Jun

ZIM LABORATORIES 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.

ZIM LABORATORIES Income Statement Analysis

• Operating income during the year fell 7.8% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 11.2% in FY24 as against 13.0% in FY23.
• Depreciation charges decreased by 8.7% and finance costs increased by 24.2% YoY, respectively.
• Other income declined by 19.2% YoY.
• Net profit for the year declined by 29.4% YoY.
• Net profit margins during the year declined from 6.1% in FY23 to 4.7% in FY24.

ZIM LABORATORIES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	3,985	3,674	-7.8%
Other income	Rs m	64	52	-19.2%
Total Revenues	Rs m	4,049	3,726	-8.0%
Gross profit	Rs m	520	413	-20.5%
Depreciation	Rs m	175	160	-8.7%
Interest	Rs m	56	69	24.2%
Profit before tax	Rs m	354	236	-33.1%
Tax	Rs m	109	64	-41.4%
Profit after tax	Rs m	244	172	-29.4%
Gross profit margin	%	13.0	11.2
Effective tax rate	%	30.9	27.1
Net profit margin	%	6.1	4.7

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ZIM LABORATORIES Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 2 billion as compared to Rs 1 billion in FY23, thereby witnessing an increase of 43.9%.
• Long-term debt stood at Rs 356 million as compared to Rs 246 million during FY23, a growth of 44.6%.
• Current assets rose 19% and stood at Rs 2 billion, while fixed assets rose 46% and stood at Rs 2 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 4 billion as against Rs 3 billion during FY23, thereby witnessing a growth of 31%.

ZIM LABORATORIES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	2,003	2,387	19.2
Current Liabilities	Rs m	1,108	1,594	43.9
Long-term Debt	Rs m	246	356	44.6
Total Liabilities	Rs m	3,416	4,468	30.8
Current assets	Rs m	1,909	2,276	19.2
Fixed Assets	Rs m	1,506	2,192	45.5
Total Assets	Rs m	3,416	4,468	30.8

ZIM LABORATORIES Cash Flow Statement Analysis

• ZIM LABORATORIES's cash flow from operating activities (CFO) during FY24 stood at Rs 163 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -730 million, an improvement of 101.7% on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs 595 million, an improvement of 10,804% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 32 million from the Rs 30 million net cash flows seen during FY23.

ZIM LABORATORIES 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	382	163	-57.4%
Cash Flow from Investing Activities	Rs m	-362	-730	-
Cash Flow from Financing Activities	Rs m	5	595	10,803.7%
Net Cash Flow	Rs m	30	32	6.0%

Current Valuations for ZIM LABORATORIES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.5, an decline from the EPS of Rs 5.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 103.6, stands at 29.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.1 times, while the price to sales ratio stands at 1.4 times.
• The company's price to cash flow (P/CF) ratio stood at 16.5 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	81.8	75.4
TTM Earnings per share	Rs	5.0	3.5
Diluted earnings per share	Rs	5.0	3.5
Price to Cash Flow	x	8.4	16.5
TTM P/E ratio	x	14.4	29.3
Price / Book Value ratio	x	5.5	2.3
Market Cap	Rs m	11,096	5,476
Dividends per share (Unadj.)	Rs	0.0	0.0

Ratio Analysis for ZIM LABORATORIES

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.4x during FY24, from 1.7x 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 deteriorated and stood at 4.4x during FY24, from 7.3x 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 declined and down at 7.2% during FY24, from 12.2% 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 declined and down at 11.1% during FY24, from 18.2% 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 declined and down at 5.4% during FY24, from 8.8% 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	1.7	1.4
Debtors’ Days	Days	872	995
Interest coverage	x	7.3	4.4
Debt to equity ratio	x	0.1	0.1
Return on assets	%	8.8	5.4
Return on equity	%	12.2	7.2
Return on capital employed	%	18.2	11.1

To see how ZIM LABORATORIES has performed over the last 5 years, please visit here.

ZIM LABORATORIES Share Price Performance

Over the last one year, ZIM LABORATORIES share price has moved down from Rs 112.6 to Rs 103.6, registering a loss of Rs 9.0 or around 8.0%.

Meanwhile, the S&P BSE HEALTHCARE Index is trading at Rs 36,631.2 (up 0.9%). Over the last one year it has moved up from 24,181.0 to 36,631.2, a gain of 12,450 points (up 51.5%).

Overall, the S&P BSE SENSEX is up 22.2% over the year.

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