Cipla reports 15.0% Net Income decline while 10.8% Revenue growth
29-05-2015 • About Cipla (
$CIPLA) • By InTwits
Cipla reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cipla has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's in pair with industry average of 10.1%.
- CAPEX is quite volatile: 38,051 in FY2015, 56,027 in FY2014, 102,810 in FY2013, 108,133 in FY2012, 69,673 in FY2011
- The company has highly profitable business model: ROIC is at 13.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cipla ($CIPLA) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 61,114 | 68,477 | 80,868 | 98,258 | 108,824 | 10.8% |
| EBITDA | 13,692 | 16,589 | 21,979 | 21,331 | 21,617 | 1.3% |
| Net Income | 9,896 | 11,442 | 15,449 | 13,884 | 11,808 | -15.0% |
Balance Sheet
|
|---|
| Cash | 828 | 756 | 773 | 1,426 | 4,840 | 239.4% |
| Short Term Debt | 5,540 | 259 | 9,665 | 9,300 | 13,941 | 49.9% |
| Long Term Debt | 179 | 33 | 6 | 3,179 | 3,093 | -2.7% |
Cash flow
|
|---|
| Capex | 7,105 | 5,611 | 7,567 | 5,696 | 6,462 | 13.5% |
Ratios
|
|---|
| Revenue growth | -58.1% | 12.0% | 18.1% | 21.5% | 10.8% | |
| EBITDA growth | -3.3% | 21.2% | 32.5% | -2.9% | 1.3% | |
| EBITDA Margin | 22.4% | 24.2% | 27.2% | 21.7% | 19.9% | -1.8% |
| Net Income Margin | 16.2% | 16.7% | 19.1% | 14.1% | 10.9% | -3.3% |
| CAPEX, % of revenue | 11.6% | 8.2% | 9.4% | 5.8% | 5.9% | 0.1% |
| ROIC | 16.0% | 17.3% | 20.3% | 16.0% | 13.3% | -2.6% |
| ROE | 15.7% | 16.0% | 18.5% | 14.6% | 11.3% | -3.2% |
| Net Debt/EBITDA | 0.4x | -0.0x | 0.4x | 0.5x | 0.6x | 0.0x |
Revenue and profitability
The company's Revenue surged on 10.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.0 pp from 14.2% to 15.2% in FY2015.
Net Income marign decreased on 3.3 pp from 14.1% to 10.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.9% in FY2015. CAPEX/Revenue decreased on 2.3 pp from 8.2% in FY2012 to 5.9% in FY2015. For the last three years the average CAPEX/Revenue was 7.0%.
Return on investment
The company operates at good ROIC (13.34%) while ROE is low (11.33%). ROIC decreased on 2.6 pp from 16.0% to 13.3% in FY2015. ROE decreased on 3.2 pp from 14.6% to 11.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 0.8x. Net Debt / EBITDA increased on 0.046x from 0.5x to 0.6x in FY2015. Debt surged on 36.5% in FY2015 while cash jumped on 239% in FY2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide Cipla 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 ($SUNPHARMA) | | 39.9% | 40.4% | 42.4% | 70.2% |
| Torrent Pharmaceuticals ($TORNTPHARM) | | 22.7% | 17.7% | 32.2% | 13.6% |
| Abbott India ($ABBOTINDIA) | | 8.2% | 8.7% | 27.3% | 2.6% |
| |
|---|
| Median (41 companies) | -37.4% | 16.7% | 14.7% | 12.6% | 10.4% |
|---|
| Cipla ($CIPLA) | | 12.0% | 18.1% | 21.5% | 10.8% |
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 ($DIVISLAB) | 38.1% | 37.2% | 38.2% | 40.2% | 37.4% |
| Hester Biosciences ($HESTERBIO) | | | | | 32.9% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | 29.2% |
| Natco Pharma ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | 26.2% |
| Dr.Reddy'S Laboratories ($DRREDDY) | 21.7% | 25.8% | 22.9% | 25.1% | 23.2% |
| |
|---|
| Median (39 companies) | 16.2% | 12.7% | 12.8% | 14.3% | 13.8% |
|---|
| Cipla ($CIPLA) | 22.4% | 24.2% | 27.2% | 21.7% | 19.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Claris Lifesciences ($CLARIS) | 32.5% | 58.1% | 42.9% | | 103.1% |
| Wintac ($WINTAC) | | | | | 22.8% |
| Hester Biosciences ($HESTERBIO) | | | | | 21.5% |
| Natco Pharma ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | 14.1% |
| Granules India ($GRANULES) | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% |
| |
|---|
| Median (27 companies) | 7.3% | 7.7% | 7.5% | 5.7% | 6.4% |
|---|
| Cipla ($CIPLA) | 11.6% | 8.2% | 9.4% | 5.8% | 5.9% |
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% | 23.0% |
| 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 ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | 35.3% |
| |
|---|
| Median (63 companies) | 13.5% | 13.7% | 13.2% | 14.4% | 14.9% |
|---|
| Cipla ($CIPLA) | 16.0% | 17.3% | 20.3% | 16.0% | 13.3% |
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 ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | 2.4x |
| |
|---|
| Median (50 companies) | 1.6x | 1.6x | 1.4x | 0.3x | 0.6x |
|---|
| Cipla ($CIPLA) | 0.4x | -0.0x | 0.4x | 0.5x | 0.6x |
