Jubilant Life Sciences Limited reports 38.2% EBITDA decline and almost no change in Revenue of 58,262

12-05-2015 • About Jubilant Life Sciences Limited ($JUBILANT) • By InTwits

Jubilant Life Sciences Limited reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Jubilant Life Sciences Limited has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.3%. At the same time it's a lot of higher than industry average of 6.9%.
CAPEX is quite volatile: 18,010 in FY2015, 12,460 in FY2014, 38,367 in FY2013, 45,600 in FY2012, 18,613 in FY2011
The company has potentially unprofitable business model: ROIC is at 5.4%
It operates with high leverage: Net Debt/EBITDA is 6.4x while industry average is 1.3x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Jubilant Life Sciences Limited ($JUBILANT) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	34,456	43,031	51,660	58,034	58,262	0.4%
EBITDA	5,885	8,884	11,248	11,165	6,904	-38.2%
Net Income	2,297	146	1,527	1,090	-578	-153.0%
Balance Sheet
Cash	10,399	2,569	2,662	4,655	3,873	-16.8%
Short Term Debt	13,028	9,790	17,764	26,784	11,018	-58.9%
Long Term Debt	28,365	28,399	24,688	17,169	36,913	115.0%
Cash flow
Capex	5,814	6,146	4,638	2,908	3,750	29.0%
Ratios
Revenue growth	-50.8%	24.9%	20.1%	12.3%	0.4%
EBITDA growth	-17.3%	51.0%	26.6%	-0.7%	-38.2%
EBITDA Margin	17.1%	20.6%	21.8%	19.2%	11.8%	-7.4%
Net Income Margin	6.7%	0.3%	3.0%	1.9%	-1.0%	-2.9%
CAPEX, % of revenue	16.9%	14.3%	9.0%	5.0%	6.4%	1.4%
ROIC	6.3%	10.3%	11.9%	10.0%	5.4%	-4.6%
ROE	10.5%	0.7%	6.5%	4.3%	-2.3%	-6.5%
Net Debt/EBITDA	5.3x	4.0x	3.5x	3.5x	6.4x	2.9x

Revenue and profitability

The company's Revenue showed almost no change in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.0 pp from 2.8% to 1.7% in FY2015.

Net Income marign decreased on 2.9 pp from 1.9% to -0.99% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Jubilant Life Sciences Limited's CAPEX/Revenue was 6.4% in FY2015. Jubilant Life Sciences Limited's CAPEX/Revenue decreased on 7.8 pp from 14.3% in FY2012 to 6.4% in FY2015. It's average CAPEX/Revenue for the last three years was 6.8%.Jubilant Life Sciences Limited invested a large share of EBITDA (54.3%) to CAPEX.

Return on investment

The company operates at low but positive ROIC (5.42%) and negative ROE (-2.27%). ROIC decreased on 4.6 pp from 10.0% to 5.4% in FY2015. ROE decreased on 6.5 pp from 4.3% to -2.3% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 6.4x and Debt / EBITDA is 6.9x. Net Debt / EBITDA surged on 2.9x from 3.5x to 6.4x in FY2015. Debt increased on 9.1% in FY2015 while cash dropped on 16.8% in FY2015.

Appendix 1: Peers in Pharmaceuticals

Below we provide Jubilant Life Sciences Limited 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 ($ABBOTINDIA)	-46.4%	8.2%	8.7%	27.3%
Median (41 companies)	-45.7%	16.6%	14.7%	13.7%	7.3%
Jubilant Life Sciences Limited ($JUBILANT)		24.9%	20.1%	12.3%	0.4%

Top companies by Gross margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Dr.Reddy'S Laboratories ($DRREDDY)			52.1%	57.4%	57.6%
Omega Laboratories ($OMEGALAB)		0.0%	0.0%	0.0%	0.0%
Median (2 companies)		46.9%	26.1%	28.7%	28.8%

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%	23.2%
Natco Pharma ($NATCOPHARM)	21.3%	21.5%	23.2%	24.9%
Median (36 companies)	16.2%	12.7%	12.8%	14.3%	15.2%
Jubilant Life Sciences Limited ($JUBILANT)	17.1%	20.6%	21.8%	19.2%	11.8%

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 ($NATCOPHARM)	20.0%	24.4%	16.3%	14.4%
Median (28 companies)	7.3%	7.7%	7.5%	5.8%	8.7%
Jubilant Life Sciences Limited ($JUBILANT)	16.9%	14.3%	9.0%	5.0%	6.4%

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 ($JENBURPH)	43.6%	34.1%	29.0%	32.4%
Median (63 companies)	14.0%	14.0%	13.8%	15.6%	14.9%
Jubilant Life Sciences Limited ($JUBILANT)	6.3%	10.3%	11.9%	10.0%	5.4%

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 ($SHARONBIO)	4.6x	4.7x	5.3x	4.5x
Kopran ($KOPRAN)	6.0x	4.5x	3.0x	3.0x
Lincoln Pharmaceuticals ($LINCOPH)	3.6x	3.8x	4.3x	3.0x
Median (50 companies)	1.5x	1.4x	1.2x	0.3x	1.6x
Jubilant Life Sciences Limited ($JUBILANT)	5.3x	4.0x	3.5x	3.5x	6.4x

Jubilant Life Sciences Limited stock price chart

Jubilant Life Sciences Limited financials

mln.	FY2010	FY2011	FY2012

Revenue	70,066	34,456	43,031
EBITDA	7,116	5,885	8,884
Net income	4,215	2,297	145.6
CAPEX	3,075	5,814	6,146
Debt	33,597	41,394	38,189
Cash	4,837	10,399	2,569

About Jubilant Life Sciences Limited

Jubilant Life Sciences Limited, an integrated pharmaceutical and life sciences company, manufactures and supplies pharmaceutical and life sciences products and services worldwide. The company provides active pharmaceutical ingredients (APIs) for cardiovascular system (CVS) and central nervous system (CNS), as well as anti-infective and anti-ulcerants. Its APIs include solid dosage formulations for CVS, CNS, and anti-allergy categories; radiopharmaceuticals for the diagnosis, treatment, and monitoring of diseases; and allergy therapy products, including allergenic extracts and mixes, and skin test devices. The company also offers life sciences ingredients, such as pyridine and picoline; fine chemicals; crop science chemicals; nutrition products, including niacinamide, niacin (vitamin B3), and choline chloride; animal nutrition products in the category of vitamin and mineral premixes, betaine, acidifiers, toxin binders, growth promoters, and emulsifiers; acetyl products, which include acetic acid, monochloro acetic acid, acetic anhydride, ethyl acetate, and sodium mono chlor acetate; and specialty gases, such as liquid carbon dioxide and ethylene oxide mixtures. In addition, it provides contract manufacturing services in manufacturing sterile injectables, and solid and semi solid dosage forms; drug discovery services in bioinformatics, chemoinformatics, and crystallography structure directed molecular design and information technology; pre clinical services, such as medicinal chemistry, analytical chemistry, custom synthesis, library design, and clinical development and market launch services; and conducts integrated drug discovery and development programs on oncology, metabolic disorders, pain, and inflammation. The company was formerly known as Jubilant Organosys Limited and changed its name to Jubilant Life Sciences Limited in 2010. Jubilant Life Sciences Limited was incorporated in 1978 and is based in Noida, India.