Torrent Pharmaceuticals Debt surged on 142% in 2015 and Net Debt / EBITDA surged on 1.8x from 0.4x to 2.1x
15-05-2015 • About Torrent Pharmaceuticals (
$TORNTPHARM) • By InTwits
Torrent Pharmaceuticals reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Torrent Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.8%. At the same time it's a lot of higher than industry average of 6.7%.
- CAPEX is quite volatile: 4,099 in FY2015, 1,895 in FY2014, 1,081 in FY2013, 1,630 in FY2012, 1,275 in FY2011
- The company has highly profitable business model: ROIC is at 19.7%
- It operates with high leverage: Net Debt/EBITDA is 2.1x while industry average is 1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Torrent Pharmaceuticals ($TORNTPHARM) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,147 | 25,944 | 30,535 | 40,363 | 45,853 | 13.6% |
| SG&A | | | | | 5,341 | |
| EBITDA | 3,878 | 5,232 | 6,972 | 9,553 | 10,202 | 6.8% |
| Net Income | 2,702 | 2,840 | 4,328 | 6,639 | 7,509 | 13.1% |
Balance Sheet
|
|---|
| Cash | 4,783 | 1,906 | 6,270 | 7,694 | 5,656 | -26.5% |
| Short Term Debt | 996 | 2,682 | 2,631 | 3,915 | 5,667 | 44.8% |
| Long Term Debt | 2,930 | 3,221 | 4,545 | 7,445 | 21,852 | 193.5% |
Cash flow
|
|---|
| Capex | 2,650 | 1,703 | 2,929 | 4,001 | 2,426 | -39.4% |
Ratios
|
|---|
| Revenue growth | -63.5% | 22.7% | 17.7% | 32.2% | 13.6% | |
| EBITDA growth | -6.9% | 34.9% | 33.3% | 37.0% | 6.8% | |
| EBITDA Margin | 18.3% | 20.2% | 22.8% | 23.7% | 22.2% | -1.4% |
| Net Income Margin | 12.8% | 10.9% | 14.2% | 16.4% | 16.4% | -0.1% |
| SG&A, % of revenue | | | | | 11.6% | 11.6% |
| CAPEX, % of revenue | 12.5% | 6.6% | 9.6% | 9.9% | 5.3% | -4.6% |
| ROIC | 22.3% | 26.4% | 30.5% | 33.2% | 19.7% | -13.5% |
| ROE | 29.2% | 25.6% | 33.1% | 39.9% | 34.2% | -5.8% |
| Net Debt/EBITDA | -0.2x | 0.8x | 0.1x | 0.4x | 2.1x | 1.8x |
Revenue and profitability
Torrent Pharmaceuticals's Revenue jumped on 13.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 12.4% to 15.1% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Torrent Pharmaceuticals had CAPEX/Revenue of 5.3%. CAPEX/Revenue decreased slightly on 1.3 pp from 6.6% in FY2012 to 5.3% in FY2015. Average CAPEX/Revenue for the last three years was 8.3%.
Return on investment
The company operates at high and attractive ROE (34.19%) while ROIC is a bit lower (19.65%). ROIC dropped on 13.5 pp from 33.2% to 19.7% in FY2015. ROE decreased on 5.8 pp from 39.9% to 34.2% in FY2015.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.8x from 0.4x to 2.1x in FY2015. Debt surged on 142% in FY2015 while cash dropped on 26.5% in FY2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide Torrent Pharmaceuticals 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 ($SUNPHARMA) | -87.8% | 39.9% | 40.4% | 42.4% | |
| Abbott India ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| Sharon Bio-Medicine ($SHARONBIO) | -37.2% | 28.3% | 33.5% | 23.4% | |
| |
|---|
| Median (41 companies) | -45.0% | 16.6% | 14.7% | 12.6% | 8.6% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | | 22.7% | 17.7% | 32.2% | 13.6% |
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 ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | |
| |
|---|
| Median (36 companies) | 16.2% | 12.7% | 12.8% | 14.3% | 14.3% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 18.3% | 20.2% | 22.8% | 23.7% | 22.2% |
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 ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | |
| |
|---|
| Median (28 companies) | 7.3% | 8.2% | 7.5% | 5.7% | 6.4% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 12.5% | 6.6% | 9.6% | 9.9% | 5.3% |
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 ($MARKSANS) | -25.8% | -142.4% | 34.9% | 33.8% | |
| Jenburkt Pharmaceuticals ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | |
| Divi'S Laboratories ($DIVISLAB) | 25.6% | 30.6% | 30.4% | 32.3% | |
| |
|---|
| Median (63 companies) | 13.5% | 13.7% | 13.2% | 14.4% | 10.8% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 22.3% | 26.4% | 30.5% | 33.2% | 19.7% |
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 | 6.4x |
| Kopran ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | |
| |
|---|
| Median (50 companies) | 1.6x | 1.6x | 1.4x | 0.4x | 1.6x |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | -0.2x | 0.8x | 0.1x | 0.4x | 2.1x |
