Sun Pharmaceutical Industries reports 158% CAPEX growth and 70.2% Revenue growth
29-05-2015 • About Sun Pharmaceutical Industries (
$SUNPHARMA) • By InTwits
Sun Pharmaceutical Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sun Pharmaceutical Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's in pair with industry average of 10.1%.
- CAPEX is quite volatile: 23,419 in FY2015, 9,060 in FY2014, 8,455 in FY2013, 7,129 in FY2012, 4,219 in FY2011
- The company has highly profitable business model: ROIC is at 23.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sun Pharmaceutical Industries ($SUNPHARMA) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 57,216 | 80,054 | 112,389 | 160,044 | 272,451 | 70.2% |
| EBITDA | 19,631 | 32,676 | 49,749 | 71,906 | 79,635 | 10.7% |
| Net Income | 18,161 | 26,567 | 29,831 | 31,415 | 45,394 | 44.5% |
Balance Sheet
|
|---|
| Cash | 8,105 | 17,527 | 20,691 | 43,587 | 72,856 | 67.1% |
| Short Term Debt | 2,683 | 1,653 | 1,445 | 25,122 | 76,277 | 203.6% |
| Long Term Debt | 1,573 | 1,554 | 1,153 | 487 | 13,684 | 2,711.6% |
Cash flow
|
|---|
| Capex | 4,219 | 7,129 | 8,455 | 9,060 | 23,419 | 158.5% |
Ratios
|
|---|
| Revenue growth | -87.8% | 39.9% | 40.4% | 42.4% | 70.2% | |
| EBITDA growth | 44.0% | 66.4% | 52.2% | 44.5% | 10.7% | |
| EBITDA Margin | 34.3% | 40.8% | 44.3% | 44.9% | 29.2% | -15.7% |
| Net Income Margin | 31.7% | 33.2% | 26.5% | 19.6% | 16.7% | -3.0% |
| CAPEX, % of revenue | 7.4% | 8.9% | 7.5% | 5.7% | 8.6% | 2.9% |
| ROIC | 18.9% | 24.8% | 31.1% | 35.0% | 23.0% | -12.0% |
| ROE | 21.0% | 24.5% | 21.9% | 18.7% | 20.6% | 1.8% |
| Net Debt/EBITDA | -0.2x | -0.4x | -0.4x | -0.3x | 0.2x | 0.5x |
Revenue and profitability
Sun Pharmaceutical Industries's Revenue jumped on 70.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 9.0% to 10.6% in FY2015.
Net Income marign decreased on 3.0 pp from 19.6% to 16.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 8.6%. Sun Pharmaceutical Industries showed almost no change in CAPEX/Revenue from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 7.3%.
Return on investment
The company operates at high and attractive ROIC (23.02%) and ROE (20.56%). ROIC dropped on 12.0 pp from 35.0% to 23.0% in FY2015. ROE increased slightly on 1.8 pp from 18.7% to 20.6% in FY2015.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA surged on 0.5x from -0.3x to 0.2x in FY2015. Debt surged on 251% in FY2015 while cash surged on 67.1% in FY2015.
Valuation
The company's trades at EV/EBITDA 29.4x and P/E 51.2x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 41.7x with the industry average at 4.7x.
Appendix 1: Peers in Pharmaceuticals
Below we provide Sun Pharmaceutical Industries 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% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | | 22.7% | 17.7% | 32.2% | 13.6% |
| Abbott India ($ABBOTINDIA) | | 8.2% | 8.7% | 27.3% | 2.6% |
| Sharon Bio-Medicine ($SHARONBIO) | -37.2% | 28.3% | 33.5% | 23.4% | |
| |
|---|
| Median (41 companies) | -37.4% | 16.6% | 14.7% | 12.6% | 10.4% |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | | 39.9% | 40.4% | 42.4% | 70.2% |
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% |
| 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 ($CLARIS) | 33.6% | 34.7% | 27.6% | 21.1% | 22.7% |
| |
|---|
| Median (39 companies) | 16.2% | 12.7% | 12.8% | 14.3% | 13.8% |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | 29.2% |
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 ($GRANULES) | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% |
| |
|---|
| Median (27 companies) | 7.4% | 7.7% | 8.3% | 5.8% | 6.2% |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 7.4% | 8.9% | 7.5% | 5.7% | 8.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | | 27.5% | 29.1% | 41.5% | 35.7% |
| Marksans Pharma ($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% |
| Divi'S Laboratories ($DIVISLAB) | 25.6% | 30.6% | 30.4% | 32.3% | 30.5% |
| |
|---|
| Median (63 companies) | 13.5% | 13.7% | 13.2% | 14.4% | 13.3% |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 18.9% | 24.8% | 31.1% | 35.0% | 23.0% |
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 ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | 2.4x |
| |
|---|
| Median (50 companies) | 1.6x | 1.6x | 1.4x | 0.5x | 0.6x |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | -0.2x | -0.4x | -0.4x | -0.3x | 0.2x |
