Trending stocks

Natco Pharma reports 31.0% Net Income growth and 11.7% Revenue growth

22-05-2015 • About Natco Pharma ($NATCOPHARM) • By InTwits

Natco Pharma reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is expanding: 26.2% in FY2015 vs. 24.9% in FY2014 vs. 21.3% in FY2011
  • Natco Pharma has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.8%. At the same time it's a lot of higher than industry average of 10.3%.
  • CAPEX is quite volatile: 180 in FY2015, 947 in FY2014, 171 in FY2013, 893 in FY2012, 156 in FY2011
  • The company has highly profitable business model: ROIC is at 15.4%
  • It operates with high leverage: Net Debt/EBITDA is 1.4x 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.

Natco Pharma ($NATCOPHARM) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue4,5975,2376,6057,3898,25311.7%
EBITDA9811,1261,5311,8372,16517.9%
Net Income5355967191,0271,34631.0%
Balance Sheet
Cash31734610010212421.8%
Short Term Debt7201,2451,9991,4502,14848.2%
Long Term Debt1,2541,3411,3789559701.6%
Cash flow
Capex9181,2801,0781,0601,16710.1%
Ratios
Revenue growth-52.0%13.9%26.1%11.9%11.7%
EBITDA growth0.8%14.8%35.9%20.0%17.9%
EBITDA Margin21.3%21.5%23.2%24.9%26.2%1.4%
Net Income Margin11.6%11.4%10.9%13.9%16.3%2.4%
CAPEX, % of revenue20.0%24.4%16.3%14.4%14.1%-0.2%
ROIC15.9%14.4%15.5%15.7%15.4%-0.3%
ROE16.3%14.4%14.3%16.3%17.1%0.8%
Net Debt/EBITDA1.7x2.0x2.1x1.3x1.4x0.1x

Revenue and profitability


The company's Revenue jumped on 11.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 1.4% to 4.8% in FY2015.

Net Income marign increased on 2.4 pp from 13.9% to 16.3% in FY2015.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 14.1% in FY2015. The company showed big decline in CAPEX/Revenue of 10.3 pp from 24.4% in FY2012 to 14.1% in FY2015. For the last three years the average CAPEX/Revenue was 14.9%.To deliver this fast growth the company invested a large share of EBITDA (53.9%) to CAPEX.

Return on investment


The company operates at good ROIC (15.41%) and ROE (17.13%). ROIC showed almost no change in FY2015. ROE increased slightly on 0.81 pp from 16.3% to 17.1% in FY2015.

Leverage (Debt)


Debt level is 1.4x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA surged on 0.1x from 1.3x to 1.4x in FY2015. Debt surged on 29.7% in FY2015 while cash surged on 21.8% in FY2015.

Management team


Natco Pharma's CEO Rajeev Nannapaneni has spent 6 years at the company.

Appendix 1: Peers in Pharmaceuticals


Below we provide Natco Pharma 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)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%14.7%13.7%9.2%
Natco Pharma ($NATCOPHARM)13.9%26.1%11.9%11.7%


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%
Ipca Laboratories ($IPCALAB)20.0%22.3%22.6%24.8%
 
Median (36 companies)16.2%12.7%12.8%14.3%15.0%
Natco Pharma ($NATCOPHARM)21.3%21.5%23.2%24.9%26.2%


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%
Ipca Laboratories ($IPCALAB)10.3%11.2%8.3%11.6%
 
Median (28 companies)7.3%7.7%7.5%5.7%6.3%
Natco Pharma ($NATCOPHARM)20.0%24.4%16.3%14.4%14.1%


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%19.7%
Jenburkt Pharmaceuticals ($JENBURPH)43.6%34.1%29.0%32.4%35.3%
 
Median (63 companies)13.5%13.7%13.2%14.4%13.6%
Natco Pharma ($NATCOPHARM)15.9%14.4%15.5%15.7%15.4%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Ind-Swift Laboratories ($INDSWFTLAB)4.6x5.5x16.1x19.5x0.0x
Shasun Pharmaceuticals ($SHASUNPHAR)4.5x2.8x4.5x6.0x6.2x
Sharon Bio-Medicine ($SHARONBIO)4.6x4.7x5.3x4.5x
Jubilant Life Sciences Limited ($JUBILANT)5.3x4.0x3.5x3.5x6.4x
Kopran ($KOPRAN)6.0x4.5x3.0x3.0x
 
Median (50 companies)1.5x1.4x1.2x0.3x1.1x
Natco Pharma ($NATCOPHARM)1.7x2.0x2.1x1.3x1.4x


Similar news

22-05-2015 Triton Valves EBITDA surged on 32.1% in 2015 and Revenue increased on 5.5%

22-05-2015 Cosmo Films Debt dropped on 29.8% in 2015 while Revenue surged on 12.2%

22-05-2015 Munjal Showa EBITDA surged on 17.0% in 2015 and Revenue increased on 2.8%

22-05-2015 Rane Brake Lining reports 12.7% EBITDA growth and almost no change in EBITDA Margin of 11.0%

22-05-2015 Andhra Petrochemicals revenue dropped on 45.9% in 2015 and EBITDA Margin dropped on 16.1 pp from -4.9% to -21.0%