Neuland Laboratories reports 40.5% Net Income decline and 0.74% Revenue growth
08-05-2015 • About Neuland Laboratories (
$NEULANDLAB) • By InTwits
Neuland Laboratories reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Neuland Laboratories has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's in pair with industry average of 7.7%.
- CAPEX is quite volatile: 148 in FY2015, 115 in FY2014, 142 in FY2013, 53.5 in FY2012, 81.9 in FY2011
- The company has highly profitable business model: ROIC is at 14.9%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Neuland Laboratories ($NEULANDLAB) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,969 | 4,485 | 4,606 | 4,657 | 4,692 | 0.7% |
| EBITDA | 477 | 522 | 615 | 741 | 670 | -9.7% |
| Net Income | 53 | 26 | 139 | 268 | 159 | -40.5% |
Balance Sheet
|
|---|
| Cash | 15 | 19 | 7 | 6 | 69 | 1,018.6% |
| Short Term Debt | 1,622 | 1,642 | 1,624 | 1,562 | 1,458 | -6.7% |
| Long Term Debt | 716 | 559 | 511 | 339 | 332 | -1.9% |
Cash flow
|
|---|
| Capex | 82 | 54 | 142 | 115 | 148 | 28.9% |
Ratios
|
|---|
| Revenue growth | -28.7% | 13.0% | 2.7% | 1.1% | 0.7% | |
| EBITDA growth | 61.7% | 9.4% | 17.9% | 20.5% | -9.7% | |
| EBITDA Margin | 12.0% | 11.6% | 13.4% | 15.9% | 14.3% | -1.6% |
| Net Income Margin | 1.3% | 0.6% | 3.0% | 5.8% | 3.4% | -2.4% |
| CAPEX, % of revenue | 2.1% | 1.2% | 3.1% | 2.5% | 3.1% | 0.7% |
| ROIC | 10.4% | 12.3% | 15.3% | 18.2% | 14.9% | -3.3% |
| ROE | 7.4% | 3.4% | 15.8% | 24.0% | 11.2% | -12.8% |
| Net Debt/EBITDA | 4.9x | 4.2x | 3.5x | 2.6x | 2.6x | 0.0x |
Revenue and profitability
Neuland Laboratories's Revenue increased slightly on 0.74% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 3.2% to -0.99% in FY2015.
Net Income marign decreased on 2.4 pp from 5.8% to 3.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Neuland Laboratories had CAPEX/Revenue of 3.1%. CAPEX/Revenue increased slightly on 2.0 pp from 1.2% in FY2012 to 3.1% in FY2015. It's average CAPEX/Revenue for the last three years was 2.9%.
Return on investment
The company operates at good ROIC (14.85%) while ROE is low (11.18%). ROIC decreased on 3.3 pp from 18.2% to 14.9% in FY2015. ROE dropped on 12.8 pp from 24.0% to 11.2% in FY2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA increased slightly on 0.014x from 2.6x to 2.6x in FY2015. Debt decreased on 5.8% in FY2015 while cash surged on 1,019% in FY2015.
Valuation
The company's trades at EV/EBITDA 6.9x and P/E 18.1x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 8.8x with the industry average at 4.7x.
Appendix 1: Peers in Pharmaceuticals
Below we provide Neuland Laboratories benchmarking against other companies in Pharmaceuticals industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Granules India ($GRANULES) | | 37.6% | 16.9% | 43.4% | 18.1% |
| Marksans Pharma ($MARKSANS) | -66.6% | 16.7% | 23.3% | 43.3% | |
| Sun Pharmaceutical Industries ($SUNPHARMA) | -87.8% | 39.9% | 40.4% | 42.4% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | -63.5% | 22.7% | 17.7% | 32.2% | |
| Abbott India ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| |
|---|
| Median (41 companies) | -46.4% | 16.7% | 14.9% | 13.7% | 8.6% |
|---|
| Neuland Laboratories ($NEULANDLAB) | | 13.0% | 2.7% | 1.1% | 0.7% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | | | 52.1% | 57.4% | |
| Omega Laboratories ($OMEGALAB) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | | 46.9% | 26.1% | 28.7% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | |
| Divi'S Laboratories ($DIVISLAB) | 38.1% | 37.2% | 38.2% | 40.2% | |
| Venus Remedies ($VENUSREM) | 24.9% | 25.2% | 25.6% | 25.5% | |
| Dr.Reddy'S Laboratories ($DRREDDY) | 21.7% | 25.8% | 22.9% | 25.1% | |
| Natco Pharma ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | |
| |
|---|
| Median (36 companies) | 16.5% | 12.9% | 12.8% | 14.3% | 16.2% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 12.0% | 11.6% | 13.4% | 15.9% | 14.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Granules India ($GRANULES) | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 24.3% | 8.4% | 10.9% | 21.6% | |
| Venus Remedies ($VENUSREM) | 26.6% | 23.2% | 22.2% | 17.5% | |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.3% | 10.4% | 15.2% | 15.8% | 11.3% |
| Natco Pharma ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | |
| |
|---|
| Median (28 companies) | 7.4% | 8.2% | 8.3% | 5.8% | 11.1% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 2.1% | 1.2% | 3.1% | 2.5% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | | 27.5% | 29.1% | 41.5% | 35.7% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 18.9% | 24.8% | 31.1% | 35.0% | |
| Marksans Pharma ($MARKSANS) | -25.8% | -142.4% | 34.9% | 33.8% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | 22.3% | 26.4% | 30.5% | 33.2% | |
| Jenburkt Pharmaceuticals ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | |
| |
|---|
| Median (63 companies) | 14.0% | 14.0% | 13.2% | 14.4% | 12.1% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 10.4% | 12.3% | 15.3% | 18.2% | 14.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ind-Swift Laboratories ($INDSWFTLAB) | 4.6x | 5.5x | 16.1x | 19.5x | |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.5x | 2.8x | 4.5x | 6.0x | 6.2x |
| Sharon Bio-Medicine ($SHARONBIO) | 4.6x | 4.7x | 5.3x | 4.5x | |
| Jubilant Life Sciences Limited ($JUBILANT) | 5.3x | 4.0x | 3.5x | 3.5x | |
| Kopran ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | |
| |
|---|
| Median (50 companies) | 1.5x | 1.4x | 1.2x | 0.3x | 2.1x |
|---|
| Neuland Laboratories ($NEULANDLAB) | 4.9x | 4.2x | 3.5x | 2.6x | 2.6x |
