Alembic Pharmaceuticals reports 154% Net Income growth in 2016 and 12.4 pp EBITDA Margin growth from 19.6% to 31.9%
27-04-2016 • About Alembic Pharmaceuticals (
$APLLTD) • By InTwits
Alembic Pharmaceuticals reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Alembic Pharmaceuticals is a fast growth stock: FY2016 revenue growth was 53.1%, 5 year revenue CAGR was 21.3% at FY2016 ROIC 62.1%
- EBITDA Margin is expanding: 31.9% in FY2016 vs. 19.6% in FY2015 vs. 15.4% in FY2012
- Alembic Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.0%. At the same time it's in pair with industry average of 3.0%
- CAPEX is quite volatile: ₹3,036m in FY2016, ₹2,236m in FY2015, ₹820m in FY2014, ₹860m in FY2013, ₹613m in FY2012
- The company has highly profitable business model: ROIC is 62.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 53.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 10.2% to 11.1% in FY2016. EBITDA Margin followed a growing trend in FY2012-FY2016.
Net Income margin increased on 9.1 pp from 13.8% to 22.8% in FY2016. Net Income margin stuck to a growing trend at 3.1 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Alembic Pharmaceuticals had CAPEX/Revenue of 9.6%. The company's CAPEX/Revenue increased on 4.0 pp from 5.7% in FY2013 to 9.6% in FY2016. Average CAPEX/Revenue for the last three years was 8.3%.
Return on investment
The company operates at high and attractive ROIC (62.1%) and ROE (57.9%). ROIC surged on 26.4 pp from 35.7% to 62.1% in FY2016. ROE surged on 21.6 pp from 36.3% to 57.9% in FY2016.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.2x Debt / EBITDA. Debt dropped on 40.6% while cash jumped on 1,776%.
Alembic Pharmaceuticals has no short term refinancing risk: cash is higher than short term debt (280.9%).
Valuation and dividends
The company's trades at EV/EBITDA 11.3x and P/E 16.2x while industy averages are 17.8x and 21.9x. Alembic Pharmaceuticals's EV/(EBITDA-CAPEX) is 16.2x with the industry average at 22.8x.
Management team
Alembic Pharmaceuticals's CEO is Chirayu Ramanbhai Amin. Chirayu Ramanbhai Amin has 9 years tenure with the company.
Financial and operational results
Alembic Pharmaceuticals ($APLLTD) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,654 | 15,203 | 18,632 | 20,561 | 31,487 | 53.1% |
| SG&A | | | | | 2,444 | |
| EBITDA | 2,260 | 2,490 | 3,577 | 4,030 | 10,060 | 149.6% |
| Net Income | 1,301 | 1,653 | 2,355 | 2,829 | 7,194 | 154.3% |
Balance Sheet
|
|---|
| Cash | 238 | 155 | 228 | 234 | 4,393 | 1,776.3% |
| Short Term Debt | 2,579 | 1,163 | 572 | 2,447 | 1,564 | -36.1% |
| Long Term Debt | 949 | 705 | 522 | 188 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 613 | 860 | 820 | 2,236 | 3,036 | 35.8% |
Ratios
|
|---|
| Revenue growth | 22.0% | 3.7% | 22.6% | 10.4% | 53.1% | |
| EBITDA growth | 40.9% | 10.2% | 43.7% | 12.6% | 149.6% | |
|
|---|
| EBITDA Margin | 15.4% | 16.4% | 19.2% | 19.6% | 31.9% | 12.4% |
| SG&A, % of revenue | | | | | 7.8% | |
| Net Income Margin | 8.9% | 10.9% | 12.6% | 13.8% | 22.8% | 9.1% |
| CAPEX, % of revenue | 4.2% | 5.7% | 4.4% | 10.9% | 9.6% | -1.2% |
|
|---|
| ROIC | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% | 26.4% |
| ROE | 37.6% | 36.8% | 40.0% | 36.3% | 57.9% | 21.6% |
| Net Debt/EBITDA | 1.5x | 0.7x | 0.2x | 0.6x | -0.3x | -0.9x |
Peers in Pharmaceuticals
Below we provide Alembic Pharmaceuticals 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mangalam Drugs & Organics ($MANGALAM) | 16.6% | -18.2% | -2.1% | 79.8% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 39.9% | 40.4% | 42.4% | 70.2% | - |
| Lyka Labs ($LYKALABS) | 41.9% | -25.7% | -22.6% | 68.7% | - |
| Marksans Pharma ($MARKSANS) | 16.7% | 23.3% | 43.3% | 26.8% | - |
| Torrent Cables ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 16.6% | 14.9% | 12.6% | 8.6% | - |
|---|
| Alembic Pharmaceuticals ($APLLTD) | - | 3.7% | 22.6% | 10.4% | 53.1% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | - |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | - |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | - |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | - |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | - |
|---|
| Alembic Pharmaceuticals ($APLLTD) | 15.4% | 16.4% | 19.2% | 19.6% | 31.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | - |
| Wintac ($WINTAC) | - | - | - | 22.8% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 21.5% | - |
| Ipca Laboratories ($IPCALAB) | 11.2% | 8.3% | 11.6% | 17.8% | - |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 8.2% | 8.3% | 5.8% | 6.0% | - |
|---|
| Alembic Pharmaceuticals ($APLLTD) | 4.2% | 5.7% | 4.4% | 10.9% | 9.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Marksans Pharma ($MARKSANS) | -142.4% | 34.9% | 33.8% | 41.2% | - |
| Jenburkt Pharmaceuticals ($JENBURPH) | 34.1% | 29.0% | 32.4% | 35.3% | - |
| Abbott India ($ABBOTINDIA) | 29.6% | 26.9% | 30.5% | 34.2% | - |
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| Ngl Fine-Chem ($NGLFINE) | 9.3% | 17.9% | 22.4% | 27.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 0.0% |
|---|
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | - |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 2.8x | 4.5x | 6.0x | 6.2x | - |
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | - |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | - |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | - |
| |
|---|
| Median (48 companies) | 1.5x | 1.4x | 0.5x | 0.0x | - |
|---|
| Alembic Pharmaceuticals ($APLLTD) | 1.5x | 0.7x | 0.2x | 0.6x | -0.3x |
