Cipla CAPEX surged on 66.6% and Revenue jumped on 22.9%
24-05-2016 • About Cipla (
$CIPLA) • By InTwits
Cipla reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cipla is a fast growth stock: FY2016 revenue growth was 22.9%, 5 year revenue CAGR was 17.0% at FY2016 ROIC 12.6%
- EBITDA Margin is declining: 18.7% in FY2016 vs. 19.9% in FY2015 vs. 24.2% in FY2012
- Cipla has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.5%. At the same time it's in pair with industry average of 7.7%
- CAPEX is quite volatile: ₹22,421m in FY2016, ₹38,051m in FY2015, ₹56,027m in FY2014, ₹102,810m in FY2013, ₹108,133m in FY2012
- The company has highly profitable business model: ROIC is 12.6%
- It operates with high leverage: Net Debt/EBITDA is 1.8x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Cipla's Revenue jumped on 22.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 15.2% to 16.8% in FY2016. During the last 5 years EBITDA Margin topped in FY2013 at 27.2% and was declining since that time.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
Cipla's CAPEX/Revenue was 8.1% in FY2016. Cipla showed small CAPEX/Revenue decline of 1.3 pp from 9.4% in FY2013 to 8.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 6.6%.
Return on investment
The company operates at good ROIC (12.6%) and ROE (13.3%). ROIC decreased slightly on 0.72 pp from 13.3% to 12.6% in FY2016. ROE increased slightly on 2.0 pp from 11.3% to 13.3% in FY2016. During FY2012-FY2016 ROIC topped in FY2013 at 20.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is 2.1x. Net Debt / EBITDA surged on 1.2x from 0.6x to 1.8x in FY2016. Debt jumped on 205% while cash surged on 55.1%. Net Debt/EBITDA grew at 0.4x per annum in FY2012-FY2016.
Cipla has short term refinancing risk: cash is only 15.1% of short term debt.
Financial and operational results
Cipla ($CIPLA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 68,477 | 80,868 | 98,258 | 108,824 | 133,725 | 22.9% |
| EBITDA | 16,589 | 21,979 | 21,331 | 21,617 | 25,011 | 15.7% |
| Net Income | 11,442 | 15,449 | 13,884 | 11,808 | 15,059 | 27.5% |
Balance Sheet
|
|---|
| Cash | 756 | 773 | 1,426 | 4,840 | 7,505 | 55.1% |
| Short Term Debt | 259 | 9,665 | 9,300 | 13,941 | 49,800 | 257.2% |
| Long Term Debt | 33 | 6 | 3,179 | 3,093 | 2,219 | -28.3% |
Cash flow
|
|---|
| Capex | 5,611 | 7,567 | 5,696 | 6,462 | 10,769 | 66.6% |
Ratios
|
|---|
| Revenue growth | 12.0% | 18.1% | 21.5% | 10.8% | 22.9% | |
| EBITDA growth | 21.2% | 32.5% | -2.9% | 1.3% | 15.7% | |
|
|---|
| EBITDA Margin | 24.2% | 27.2% | 21.7% | 19.9% | 18.7% | -1.2% |
| Net Income Margin | 16.7% | 19.1% | 14.1% | 10.9% | 11.3% | 0.4% |
| CAPEX, % of revenue | 8.2% | 9.4% | 5.8% | 5.9% | 8.1% | 2.1% |
|
|---|
| ROIC | 17.3% | 20.3% | 16.0% | 13.3% | 12.6% | -0.7% |
| ROE | 16.0% | 18.5% | 14.6% | 11.3% | 13.3% | 2.0% |
| Net Debt/EBITDA | -0.0x | 0.4x | 0.5x | 0.6x | 1.8x | 1.2x |
Peers in Pharmaceuticals
Below we provide Cipla 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 ($MANGALAM) | - | -18.2% | -2.1% | 79.8% | 33.7% |
| Sun Pharmaceutical Industries ($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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 19.8% | 14.7% | 12.6% | 8.6% | 12.8% |
|---|
| Cipla ($CIPLA) | - | 18.1% | 21.5% | 10.8% | 22.9% |
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 ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 19.1% |
|---|
| Cipla ($CIPLA) | 24.2% | 27.2% | 21.7% | 19.9% | 18.7% |
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 ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 7.7% | 7.5% | 5.7% | 6.2% | 9.3% |
|---|
| Cipla ($CIPLA) | 8.2% | 9.4% | 5.8% | 5.9% | 8.1% |
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 ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 14.5% |
|---|
| Cipla ($CIPLA) | 17.3% | 20.3% | 16.0% | 13.3% | 12.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | 3.2x |
| Shasun Pharmaceuticals ($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 ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x |
| |
|---|
| Median (48 companies) | 1.6x | 1.4x | 0.3x | 0.0x | 0.8x |
|---|
| Cipla ($CIPLA) | -0.0x | 0.4x | 0.5x | 0.6x | 1.8x |
