Looking for growth stocks? Pay attention to Divi'S Laboratories
30-05-2015 • About Divi'S Laboratories (
$DIVISLAB) • By InTwits
Divi'S Laboratories is an attractive growth stock in Pharmaceuticals industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Divi'S Laboratories showed fast growth in the last financial year. Divi'S Laboratories's revenue surged on 23.3% in FY2015. The growth also happened in EBITDA of 14.8% for the same period.
If we look for the longer period Divi'S Laboratories showed fast revenue growth of 18.8% from FY2012 to FY2015 annually. EBITDA surged on 19.0% from FY2012 to FY2015 annually.
Divi'S Laboratories ($DIVISLAB) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 13,071 | 18,584 | 21,399 | 25,253 | 31,149 |
|---|
| Revenue growth, % | | 42.2% | 15.1% | 18.0% | 23.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 4,983 | 6,915 | 8,165 | 10,152 | 11,658 |
|---|
| EBITDA growth, % | | 38.8% | 18.1% | 24.3% | 14.8% |
|---|
| EBITDA margin, % | 38.1% | 37.2% | 38.2% | 40.2% | 37.4% |
|---|
| Net Income | 4,293 | 5,333 | 6,020 | 7,733 | 8,515 |
|---|
| Net Income margin, % | 32.8% | 28.7% | 28.1% | 30.6% | 27.3% |
|---|
| |
| CAPEX | 1,627 | 2,892 | 3,401 | 2,465 | 3,072 |
|---|
| CAPEX/Revenue, % | 12.4% | 15.6% | 15.9% | 9.76% | 9.86% |
|---|
| Debt | 230 | 528 | 331 | 184 | 266 |
|---|
| Cash | 145 | 173 | 120 | 151 | 646 |
|---|
| Net Debt/EBITDA | 0.0x | 0.1x | 0.0x | 0.0x | -0.0x |
|---|
| |
| ROIC, % | 25.6% | 30.6% | 30.4% | 32.3% | 30.5% |
|---|
| ROE, % | 25.9% | 27.1% | 26.0% | 28.3% | 26.4% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 40.2% in FY2014 to 37.4% in FY2015. In the longer period EBITDA margin increased slightly on 0.200 pp from 37.2% in FY2012 to 37.4% in FY2015.
We call Divi'S Laboratories an attractive growth stock as together with the growth it delivers high ROIC at 30.5%. Three years ago it was about the same at 30.6%. It's average level of ROIC for the last three years was 31.1%.
The company's Net Income margin dropped on 3.30 pp from 30.6% to 27.3% in FY2015. In the longer period Net Income margin decreased slightly on 1.40 pp from 28.7% in FY2012 to 27.3% in FY2015.
Divi'S Laboratories operates at ROE of 26.4%. Average ROE for the last three years was 26.9%.
Capital expenditures (CAPEX)
To this fast growth Divi'S Laboratories had to invest in CAPEX.The company's CAPEX/Revenue was 9.86% in FY2015. CAPEX/Revenue dropped on 5.70 pp from 15.6% in FY2012 to 9.86% in FY2015. For the last three years the average CAPEX/Revenue was 11.8%.
Leverage (Debt)
The company has negative net debt at -0.0x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period Divi'S Laboratories's leverage dropped on 0.08x from 0.05x in FY2012 to -0.03x in FY2015.
Management team
Divi'S Laboratories is run by Murali Krishna Prasad Divi as a CEO.
Peers in Pharmaceuticals
Below you can find Divi'S Laboratories 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| |
|---|
| Median (41 companies) | -46.4% | 16.6% | 14.7% | 12.6% | 10.4% |
|---|
| Divi'S Laboratories ($DIVISLAB) | | 42.2% | 15.1% | 18.0% | 23.3% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | |
| Venus Remedies ($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% |
| Ipca Laboratories ($IPCALAB) | 20.0% | 22.3% | 22.6% | 24.8% | |
| |
|---|
| Median (36 companies) | 16.2% | 12.7% | 12.8% | 14.3% | 15.0% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 38.1% | 37.2% | 38.2% | 40.2% | 37.4% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | 14.1% |
| |
|---|
| Median (28 companies) | 7.3% | 7.7% | 7.5% | 5.7% | 6.4% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 12.4% | 15.6% | 15.9% | 9.8% | 9.9% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | 35.3% |
| |
|---|
| Median (63 companies) | 13.5% | 13.7% | 13.2% | 14.4% | 14.9% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 25.6% | 30.6% | 30.4% | 32.3% | 30.5% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | |
| |
|---|
| Median (50 companies) | 1.6x | 1.6x | 1.4x | 0.5x | 1.1x |
|---|
| Divi'S Laboratories ($DIVISLAB) | 0.0x | 0.1x | 0.0x | 0.0x | -0.0x |
