Torrent Pharmaceuticals EBITDA jumped on 167% and EBITDA Margin surged on 19.4 pp from 22.2% to 41.7%
23-05-2016 • About Torrent Pharmaceuticals (
$TORNTPHARM) • By InTwits
Torrent Pharmaceuticals reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Torrent Pharmaceuticals is a fast growth stock: FY2016 revenue growth was 42.4%, 5 year revenue CAGR was 25.3% at FY2016 ROIC 44.2%
- Torrent Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.1%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: ₹6,040m in FY2016, ₹2,426m in FY2015, ₹4,001m in FY2014, ₹2,929m in FY2013, ₹1,703m in FY2012
- The company has highly profitable business model: ROIC is 44.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Torrent Pharmaceuticals's Revenue surged on 42.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 15.1% to 17.8% in FY2016.
SG&A as a % of Revenue decreased on 3.3 pp from 11.6% to 8.4% in FY2016.
Net Income margin jumped on 10.0 pp from 16.4% to 26.4% in FY2016. Net Income margin stuck to a growing trend at 3.3 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Torrent Pharmaceuticals's CAPEX/Revenue was 9.3% in FY2016. Torrent Pharmaceuticals's CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 8.2%.
Return on investment
The company operates at high and attractive ROIC (44.2%) and ROE (58.6%). ROIC jumped on 24.5 pp from 19.7% to 44.2% in FY2016. ROE surged on 24.4 pp from 34.2% to 58.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 1.5x from 2.1x to 0.6x in FY2016. Debt dropped on 13.4% while cash surged on 14.0%.
Torrent Pharmaceuticals has no short term refinancing risk: cash is higher than short term debt (124.2%).
Financial and operational results
Torrent Pharmaceuticals ($TORNTPHARM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 25,944 | 30,535 | 40,363 | 45,853 | 65,290 | 42.4% |
| SG&A | | | | 5,341 | 5,470 | 2.4% |
| EBITDA | 5,232 | 6,972 | 9,553 | 10,202 | 27,204 | 166.7% |
| Net Income | 2,840 | 4,328 | 6,639 | 7,509 | 17,224 | 129.4% |
Balance Sheet
|
|---|
| Cash | 1,906 | 6,270 | 7,694 | 5,656 | 6,449 | 14.0% |
| Short Term Debt | 2,682 | 2,631 | 3,915 | 5,667 | 5,192 | -8.4% |
| Long Term Debt | 3,221 | 4,545 | 7,445 | 21,852 | 18,637 | -14.7% |
Cash flow
|
|---|
| Capex | 1,703 | 2,929 | 4,001 | 2,426 | 6,040 | 149.0% |
Ratios
|
|---|
| Revenue growth | 22.7% | 17.7% | 32.2% | 13.6% | 42.4% | |
| EBITDA growth | 34.9% | 33.3% | 37.0% | 6.8% | 166.7% | |
|
|---|
| EBITDA Margin | 20.2% | 22.8% | 23.7% | 22.2% | 41.7% | 19.4% |
| SG&A, % of revenue | | | | 11.6% | 8.4% | -3.3% |
| Net Income Margin | 10.9% | 14.2% | 16.4% | 16.4% | 26.4% | 10.0% |
| CAPEX, % of revenue | 6.6% | 9.6% | 9.9% | 5.3% | 9.3% | 4.0% |
|
|---|
| ROIC | 26.4% | 30.5% | 33.2% | 19.7% | 44.2% | 24.5% |
| ROE | 25.6% | 33.1% | 39.9% | 34.2% | 58.6% | 24.4% |
| Net Debt/EBITDA | 0.8x | 0.1x | 0.4x | 2.1x | 0.6x | -1.5x |
Peers in Pharmaceuticals
Below you can find Torrent Pharmaceuticals 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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 19.8% | 14.7% | 12.6% | 8.6% | 12.8% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | - | 17.7% | 32.2% | 13.6% | 42.4% |
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 ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 18.0% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 20.2% | 22.8% | 23.7% | 22.2% | 41.7% |
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 ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 8.2% | 7.5% | 5.7% | 6.2% | 9.5% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 6.6% | 9.6% | 9.9% | 5.3% | 9.3% |
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 ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 14.5% |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 26.4% | 30.5% | 33.2% | 19.7% | 44.2% |
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 |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x |
| |
|---|
| Median (48 companies) | 1.6x | 1.4x | 0.4x | 0.0x | 0.9x |
|---|
| Torrent Pharmaceuticals ($TORNTPHARM) | 0.8x | 0.1x | 0.4x | 2.1x | 0.6x |
