Claris Lifesciences CAPEX jumped
22-05-2015 • About Claris Lifesciences (
$CLARIS) • By InTwits
Claris Lifesciences reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Claris Lifesciences ($CLARIS) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 7,388 | 7,627 | 6,584 | 6,254 | 6,470 | 3.5% |
| EBITDA | 2,485 | 2,643 | 1,816 | 1,319 | 1,466 | 11.2% |
| Net Income | 1,263 | 1,039 | 844 | 1,390 | 1,361 | -2.1% |
Balance Sheet
|
|---|
| Cash | 395 | 324 | 659 | 1,693 | 576 | -66.0% |
| Short Term Debt | 2,269 | 2,431 | 1,410 | 1,050 | 2,604 | 148.0% |
| Long Term Debt | 1,817 | 2,989 | 1,268 | 3,068 | 2,734 | -10.9% |
Cash flow
|
|---|
| Capex | 2,402 | 4,432 | 2,823 | | 6,670 | |
Ratios
|
|---|
| Revenue growth | -4.3% | 3.2% | -13.7% | -5.0% | 3.5% | |
| EBITDA growth | 2.0% | 6.3% | -31.3% | -27.3% | 11.2% | |
| EBITDA Margin | 33.6% | 34.7% | 27.6% | 21.1% | 22.7% | 1.6% |
| Net Income Margin | 17.1% | 13.6% | 12.8% | 22.2% | 21.0% | -1.2% |
| CAPEX, % of revenue | 32.5% | 58.1% | 42.9% | | 103.1% | 103.1% |
| ROIC | 13.5% | 11.5% | 6.6% | 5.3% | 5.4% | 0.2% |
| ROE | 12.8% | 9.4% | 6.6% | 10.2% | 10.4% | 0.1% |
| Net Debt/EBITDA | 1.5x | 1.9x | 1.1x | 1.8x | 3.2x | 1.4x |
Revenue and profitability
The company's Revenue increased on 3.5% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 0.79% to -0.81% in FY2015.
Net Income marign decreased slightly on 1.2 pp from 22.2% to 21.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 103%. CAPEX/Revenue jumped on 45.0 pp from 58.1% in FY2012 to 103% in FY2015.The company maintained rich investment policy and has spent a lot to CAPEX (455% of EBITDA).
Return on investment
The company operates at low ROIC (5.42%) and ROE (10.35%). ROIC showed almost no change in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.6x. Net Debt / EBITDA surged on 1.4x from 1.8x to 3.2x in FY2015. Debt jumped on 29.6% in FY2015 while cash dropped on 66.0% in FY2015.
Valuation
Claris Lifesciences's trades at EV/EBITDA 14.5x and P/E 12.1x while industy averages are 10.5x and 26.1x.
Management team
Claris Lifesciences's CEO Arjun S Handa has spent 10 years at the company.
Appendix 1: Peers in Pharmaceuticals
Below you can find Claris Lifesciences benchmarking vs. other companies in Pharmaceuticals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
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) | | 22.7% | 17.7% | 32.2% | 13.6% |
| Abbott India ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| |
|---|
| Median (41 companies) | -47.3% | 16.7% | 14.9% | 13.7% | 10.4% |
|---|
| Claris Lifesciences ($CLARIS) | | 3.2% | -13.7% | -5.0% | 3.5% |
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 ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | 26.2% |
| |
|---|
| Median (36 companies) | 16.2% | 12.7% | 12.8% | 14.3% | 15.0% |
|---|
| Claris Lifesciences ($CLARIS) | 33.6% | 34.7% | 27.6% | 21.1% | 22.7% |
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 ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | 14.1% |
| |
|---|
| Median (29 companies) | 7.3% | 7.7% | 7.5% | 5.8% | 6.3% |
|---|
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Alembic Pharmaceuticals ($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% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | 22.3% | 26.4% | 30.5% | 33.2% | 19.7% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | 35.3% |
| |
|---|
| Median (63 companies) | 14.0% | 14.0% | 13.8% | 15.6% | 15.1% |
|---|
| Claris Lifesciences ($CLARIS) | 13.5% | 11.5% | 6.6% | 5.3% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ind-Swift Laboratories ($INDSWFTLAB) | 4.6x | 5.5x | 16.1x | 19.5x | 0.0x |
| 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 | 1.4x | 1.4x | 0.3x | 1.1x |
|---|
| Claris Lifesciences ($CLARIS) | 1.5x | 1.9x | 1.1x | 1.8x | 3.2x |
