Abbott India Net Income surged and EBITDA Margin increased slightly on 1.8 pp from 12.0% to 13.8%

27-05-2015 • About Abbott India ($ABBOTINDIA) • By InTwits

Abbott India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• EBITDA Margin is relatively stable: 13.8% in FY2015 vs. 12.0% in FY2014 vs. 12.1% in FY2011
• The company has highly profitable business model: ROIC is at 34.2%

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

Abbott India ($ABBOTINDIA) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	14,902	16,131	17,527	22,313	22,886	2.6%
EBITDA	1,800	2,043	2,180	2,683	3,167	18.0%
Net Income	1,204	1,447	1,601	0	2,290
Balance Sheet
Cash	207	3,245	3,681	4,602	490	-89.4%
Short Term Debt	0	0	0	0	0
Long Term Debt	0	0	0	0	0
Cash flow
Capex	155	173			181
Ratios
Revenue growth	-46.4%	8.2%	8.7%	27.3%	2.6%
EBITDA growth	53.1%	13.5%	6.7%	23.1%	18.0%
EBITDA Margin	12.1%	12.7%	12.4%	12.0%	13.8%	1.8%
Net Income Margin	8.1%	9.0%	9.1%	0.0%	10.0%	10.0%
CAPEX, % of revenue	1.0%	1.1%			0.8%	0.8%
ROIC	36.0%	29.6%	26.9%	30.5%	34.2%	3.7%
ROE	27.0%	24.3%	22.0%	0.0%	26.5%	26.5%
Net Debt/EBITDA	-0.1x	-1.6x	-1.7x	-1.7x	-0.2x	1.6x

Revenue and profitability

Abbott India's Revenue increased on 2.6% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 12.0% to 13.8% in FY2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 0.79% in FY2015. The company's CAPEX/Revenue showed almost no change from FY2012 to FY2015.

Return on investment

The company operates at high and attractive ROIC (34.18%) and ROE (26.54%). ROIC increased on 3.7 pp from 30.5% to 34.2% in FY2015. ROE surged26.5 pp from 0% to 26.5% in FY2015.

Leverage (Debt)

The company has no debt. Cash dropped on 89.4% in FY2015.

Appendix 1: Peers in Pharmaceuticals

Below you can find Abbott India 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%
Sharon Bio-Medicine ($SHARONBIO)	-37.2%	28.3%	33.5%	23.4%
Median (41 companies)	-48.8%	16.7%	14.9%	12.6%	9.2%
Abbott India ($ABBOTINDIA)		8.2%	8.7%	27.3%	2.6%

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
Divi'S Laboratories ($DIVISLAB)	38.1%	37.2%	38.2%	40.2%	37.4%
Natco Pharma ($NATCOPHARM)	21.3%	21.5%	23.2%	24.9%	26.2%
Dr.Reddy'S Laboratories ($DRREDDY)	21.7%	25.8%	22.9%	25.1%	23.2%
Claris Lifesciences ($CLARIS)	33.6%	34.7%	27.6%	21.1%	22.7%
Torrent Pharmaceuticals ($TORNTPHARM)	18.3%	20.2%	22.8%	23.7%	22.2%
Median (29 companies)	16.5%	12.9%	13.4%	15.0%	12.1%
Abbott India ($ABBOTINDIA)	12.1%	12.7%	12.4%	12.0%	13.8%

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%	14.1%
Median (29 companies)	7.4%	8.2%	7.9%	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 ($JENBURPH)	43.6%	34.1%	29.0%	32.4%	35.3%
Median (63 companies)	13.5%	13.7%	13.2%	14.4%	13.6%
Abbott India ($ABBOTINDIA)	36.0%	29.6%	26.9%	30.5%	34.2%

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 ($KOPRAN)	6.0x	4.5x	3.0x	3.0x
Median (50 companies)	1.6x	1.6x	1.4x	0.5x	0.6x
Abbott India ($ABBOTINDIA)	-0.1x	-1.6x	-1.7x	-1.7x	-0.2x

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