Claris Lifesciences Net Income dropped on 143% while Revenue jumped on 14.2%
06-05-2016 • About Claris Lifesciences (
$CLARIS) • By InTwits
Claris Lifesciences reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- The company has potentially unprofitable business model: ROIC is 5.5%
- It operates with high leverage: Net Debt/EBITDA is 2.9x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Claris Lifesciences's Revenue surged on 14.2%. During FY2012-FY2016 Revenue growth bottomed in FY2013 at -13.7% and was accelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.9 pp from 16.9% to 18.8% in FY2016. EBITDA Margin declined at -3.5 pp per annum in the last 5 years.
Net Income margin dropped on 28.9 pp from 21.0% to -7.9% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Claris Lifesciences had CAPEX/Revenue of 15.8%. CAPEX/Revenue dropped on 27.1 pp from 42.9% in FY2013 to 15.8% in FY2016. To deliver its fast growth the company invested a large share of EBITDA (79.7%) to CAPEX.
Return on investment
The company operates at low but positive ROIC (5.5%) and negative ROE (-4.5%). ROIC showed almost no change in FY2016. ROE dropped on 14.9 pp from 10.4% to -4.5% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 5.3% and was growing since that time.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 3.2x to 2.9x in FY2016. Debt jumped on 12.9% while cash surged on 217%.
Claris Lifesciences has short term refinancing risk: cash is only 73.6% of short term debt.
Management team
The company's CEO is Arjun S Handa. Arjun S Handa has 12 years tenure with the company. Chandrasingh S Purohit is a the company's CFO. Chandrasingh S Purohit has spent 5 years at the company.
Financial and operational results
Claris Lifesciences ($CLARIS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,627 | 6,584 | 6,254 | 6,470 | 7,389 | 14.2% |
| EBITDA | 2,643 | 1,816 | 1,319 | 1,466 | 1,463 | -0.2% |
| Net Income | 1,039 | 844 | 1,390 | 1,361 | -580 | -142.6% |
Balance Sheet
|
|---|
| Cash | 324 | 659 | 1,693 | 576 | 1,824 | 217.0% |
| Short Term Debt | 2,431 | 1,410 | 1,050 | 2,604 | 2,478 | -4.8% |
| Long Term Debt | 2,989 | 1,268 | 3,068 | 2,734 | 3,551 | 29.9% |
Cash flow
|
|---|
| Capex | 4,432 | 2,823 | | 6,670 | 1,166 | -82.5% |
Ratios
|
|---|
| Revenue growth | 3.2% | -13.7% | -5.0% | 3.5% | 14.2% | |
| EBITDA growth | 6.3% | -31.3% | -27.3% | 11.2% | -0.2% | |
|
|---|
| EBITDA Margin | 34.7% | 27.6% | 21.1% | 22.7% | 19.8% | -2.9% |
| Net Income Margin | 13.6% | 12.8% | 22.2% | 21.0% | -7.9% | -28.9% |
| CAPEX, % of revenue | 58.1% | 42.9% | | 103.1% | 15.8% | -87.3% |
|
|---|
| ROIC | 11.5% | 6.6% | 5.3% | 5.4% | 5.5% | 0.1% |
| ROE | 9.4% | 6.6% | 10.2% | 10.4% | -4.5% | -14.9% |
| Net Debt/EBITDA | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x | -0.4x |
Peers in Pharmaceuticals
Below we provide Claris Lifesciences 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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 16.7% | 14.9% | 13.7% | 9.2% | 15.3% |
|---|
| Claris Lifesciences ($CLARIS) | - | -13.7% | -5.0% | 3.5% | 14.2% |
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 ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | - |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 19.5% |
|---|
| Claris Lifesciences ($CLARIS) | 34.7% | 27.6% | 21.1% | 22.7% | 19.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | - |
| Granules India ($GRANULES) | 8.8% | 15.2% | 24.3% | 11.4% | 9.4% |
| |
|---|
| Median (31 companies) | 7.7% | 7.5% | 5.8% | 6.0% | 9.4% |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | 15.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Marksans Pharma ($MARKSANS) | -142.4% | 34.9% | 33.8% | 41.2% | - |
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
| 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 ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 14.0% | 13.8% | 15.6% | 13.3% | 14.1% |
|---|
| Claris Lifesciences ($CLARIS) | 11.5% | 6.6% | 5.3% | 5.4% | 5.5% |
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 | - |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | - |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | - |
| Glenmark Pharmaceuticals ($GLENMARK) | 2.7x | 2.1x | 2.2x | 2.5x | - |
| |
|---|
| Median (48 companies) | 1.4x | 1.4x | 0.3x | 0.0x | 1.0x |
|---|
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x |
