Neuland Laboratories Net Income jumped on 71.3% and EBITDA Margin increased slightly on 1.5 pp from 14.3% to 15.8%
20-05-2016 • About Neuland Laboratories (
$NEULANDLAB) • By InTwits
Neuland Laboratories reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Neuland Laboratories has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 6.2%
- CAPEX is quite volatile: ₹193m in FY2016, ₹148m in FY2015, ₹115m in FY2014, ₹142m in FY2013, ₹54m in FY2012
- The company has highly profitable business model: ROIC is 17.6%
- It operates with high leverage: Net Debt/EBITDA is 2.0x 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
The company's Revenue increased on 8.7%. During FY2012-FY2016 Revenue growth bottomed in FY2015 at 0.74%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.5 pp from 14.3% to 15.8% in FY2016.
Net Income margin increased slightly on 2.0 pp from 3.4% to 5.4% in FY2016.
Investments (CAPEX, working capital and M&A)
Neuland Laboratories's CAPEX/Revenue was 3.8% in FY2016. Neuland Laboratories showed small growth in CAPEX/Revenue of 0.71 pp from 3.1% in FY2013 to 3.8% in FY2016. For the last three years the average CAPEX/Revenue was 3.1%.
Return on investment
The company operates at good ROIC (17.6%) and ROE (15.7%). ROIC increased on 2.7 pp from 14.9% to 17.6% in FY2016. ROE increased on 4.5 pp from 11.2% to 15.7% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.1x. Net Debt / EBITDA dropped on 0.6x from 2.6x to 2.0x in FY2016. Debt decreased on 5.6% while cash jumped on 39.5%. Net Debt/EBITDA stuck to a declining trend at -0.5x per annum in FY2012-FY2016.
Neuland Laboratories has short term refinancing risk: cash is only 7.8% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 10.3x and P/E 24.6x while industy averages are 17.8x and 21.9x. Neuland Laboratories's EV/(EBITDA-CAPEX) is 13.6x with the industry average at 22.8x.
Financial and operational results
Neuland Laboratories ($NEULANDLAB) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,485 | 4,606 | 4,657 | 4,692 | 5,100 | 8.7% |
| EBITDA | 522 | 615 | 741 | 670 | 804 | 20.1% |
| Net Income | 26 | 139 | 268 | 159 | 273 | 71.3% |
Balance Sheet
|
|---|
| Cash | 19 | 7 | 6 | 69 | 96 | 39.5% |
| Short Term Debt | 1,642 | 1,624 | 1,562 | 1,458 | 1,236 | -15.2% |
| Long Term Debt | 559 | 511 | 339 | 332 | 454 | 36.7% |
Cash flow
|
|---|
| Capex | 54 | 142 | 115 | 148 | 193 | 30.7% |
Ratios
|
|---|
| Revenue growth | 13.0% | 2.7% | 1.1% | 0.7% | 8.7% | |
| EBITDA growth | 9.4% | 17.9% | 20.5% | -9.7% | 20.1% | |
|
|---|
| EBITDA Margin | 11.6% | 13.4% | 15.9% | 14.3% | 15.8% | 1.5% |
| Net Income Margin | 0.6% | 3.0% | 5.8% | 3.4% | 5.4% | 2.0% |
| CAPEX, % of revenue | 1.2% | 3.1% | 2.5% | 3.1% | 3.8% | 0.6% |
|
|---|
| ROIC | 12.3% | 15.3% | 18.2% | 14.9% | 17.6% | 2.7% |
| ROE | 3.4% | 15.8% | 24.0% | 11.2% | 15.7% | 4.5% |
| Net Debt/EBITDA | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x | -0.6x |
Peers in Pharmaceuticals
Below you can find Neuland 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mangalam Drugs & Organics ($MANGALAM) | - | -18.2% | -2.1% | 79.8% | 33.7% |
| Sun Pharmaceutical Industries ($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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 22.7% | 14.9% | 13.7% | 9.2% | 14.2% |
|---|
| Neuland Laboratories ($NEULANDLAB) | - | 2.7% | 1.1% | 0.7% | 8.7% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | 59.6% |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 29.8% |
|---|
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 ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.9% | 12.8% | 14.3% | 12.0% | 18.8% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 11.6% | 13.4% | 15.9% | 14.3% | 15.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | 15.8% |
| Wintac ($WINTAC) | - | - | - | 22.8% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 21.5% | - |
| Ipca Laboratories ($IPCALAB) | 11.2% | 8.3% | 11.6% | 17.8% | - |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 8.2% | 8.3% | 5.8% | 6.2% | 9.6% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 1.2% | 3.1% | 2.5% | 3.1% | 3.8% |
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 ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 14.0% | 13.2% | 14.4% | 13.0% | 13.4% |
|---|
| Neuland Laboratories ($NEULANDLAB) | 12.3% | 15.3% | 18.2% | 14.9% | 17.6% |
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 ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | 2.1x |
| Glenmark Pharmaceuticals ($GLENMARK) | 2.7x | 2.1x | 2.2x | 2.5x | 2.2x |
| |
|---|
| Median (48 companies) | 1.4x | 1.2x | 0.3x | 0.0x | 0.8x |
|---|
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x |
