Jubilant Life Sciences Limited reports 847% Net Income growth in 2016 and almost no change in Revenue of 58,023

24-05-2016 • About Jubilant Life Sciences Limited ($JUBILANT) • By InTwits

Jubilant Life Sciences Limited reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Jubilant Life Sciences Limited has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's in pair with industry average of 7.7%
CAPEX is quite volatile: ₹25,268m in FY2016, ₹18,010m in FY2015, ₹12,460m in FY2014, ₹38,367m in FY2013, ₹45,600m in FY2012
The company has highly profitable business model: ROIC is 12.4%
It operates with high leverage: Net Debt/EBITDA is 3.2x 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

Jubilant Life Sciences Limited's Revenue showed almost no change in FY2016. Revenue decline was accelerating on average at -7.0 pp per annum in FY2012-FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 10.3 pp from 11.8% to 22.2% in FY2016.

Net Income margin increased on 8.4 pp from -0.99% to 7.4% in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 Jubilant Life Sciences Limited had CAPEX/Revenue of 6.1%. The company's CAPEX/Revenue decreased on 2.8 pp from 9.0% in FY2013 to 6.1% in FY2016. It's average CAPEX/Revenue for the last three years was 5.9%.

Return on investment

The company operates at good ROIC (12.4%) and ROE (16.1%). ROIC increased on 7.0 pp from 5.4% to 12.4% in FY2016. ROE jumped on 18.4 pp from -2.3% to 16.1% in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.5x. Net Debt / EBITDA dropped on 3.1x from 6.4x to 3.2x in FY2016. Debt decreased on 5.8% while cash dropped on 13.5%.

Jubilant Life Sciences Limited has short term refinancing risk: cash is only 22.7% of short term debt.

Financial and operational results

Jubilant Life Sciences Limited ($JUBILANT) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	43,031	51,660	58,034	58,262	58,023	-0.4%
SG&A					982
EBITDA	8,884	11,248	11,165	6,904	12,867	86.4%
Net Income	146	1,527	1,090	-578	4,315
Balance Sheet
Cash	2,569	2,662	4,655	3,873	3,350	-13.5%
Short Term Debt	9,790	17,764	26,784	11,018	14,727	33.7%
Long Term Debt	28,399	24,688	17,169	36,913	30,440	-17.5%
Cash flow
Capex	6,146	4,638	2,908	3,750	3,558	-5.1%
Ratios
Revenue growth	24.9%	20.1%	12.3%	0.4%	-0.4%
EBITDA growth	51.0%	26.6%	-0.7%	-38.2%	86.4%

EBITDA Margin	20.6%	21.8%	19.2%	11.8%	22.2%	10.3%
SG&A, % of revenue					1.7%
Net Income Margin	0.3%	3.0%	1.9%	-1.0%	7.4%	8.4%
CAPEX, % of revenue	14.3%	9.0%	5.0%	6.4%	6.1%	-0.3%

ROIC	10.3%	11.9%	10.0%	5.4%	12.4%	7.0%
ROE	0.7%	6.5%	4.3%	-2.3%	16.1%	18.4%
Net Debt/EBITDA	4.0x	3.5x	3.5x	6.4x	3.2x	-3.1x

Peers in Pharmaceuticals

Below we provide Jubilant Life Sciences Limited 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 ($TORRCABS)	27.5%	17.4%	-42.9%	26.5%	-
Median (41 companies)	19.8%	14.7%	13.7%	9.2%	14.7%
Jubilant Life Sciences Limited ($JUBILANT)	-	20.1%	12.3%	0.4%	-0.4%

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 ($DRREDDY)	25.8%	22.9%	25.1%	23.2%	25.8%
Median (53 companies)	12.7%	12.8%	14.3%	12.1%	18.7%
Jubilant Life Sciences Limited ($JUBILANT)	20.6%	21.8%	19.2%	11.8%	22.2%

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 ($NATCOPHARM)	24.4%	16.3%	14.4%	14.1%	-
Median (31 companies)	7.7%	7.5%	5.8%	6.0%	9.3%
Jubilant Life Sciences Limited ($JUBILANT)	14.3%	9.0%	5.0%	6.4%	6.1%

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 ($DIVISLAB)	30.6%	30.4%	32.3%	30.5%	-
Median (63 companies)	14.0%	13.8%	15.6%	13.3%	14.5%
Jubilant Life Sciences Limited ($JUBILANT)	10.3%	11.9%	10.0%	5.4%	12.4%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
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
Glenmark Pharmaceuticals ($GLENMARK)	2.7x	2.1x	2.2x	2.5x	2.2x
Median (48 companies)	1.4x	1.2x	0.3x	0.0x	0.8x
Jubilant Life Sciences Limited ($JUBILANT)	4.0x	3.5x	3.5x	6.4x	3.2x

Jubilant Life Sciences Limited stock price chart

Jubilant Life Sciences Limited financials

mln.	FY2010	FY2011	FY2012

Revenue	70,066	34,456	43,031
EBITDA	7,116	5,885	8,884
Net income	4,215	2,297	145.6
CAPEX	3,075	5,814	6,146
Debt	33,597	41,394	38,189
Cash	4,837	10,399	2,569

About Jubilant Life Sciences Limited

Jubilant Life Sciences Limited, an integrated pharmaceutical and life sciences company, manufactures and supplies pharmaceutical and life sciences products and services worldwide. The company provides active pharmaceutical ingredients (APIs) for cardiovascular system (CVS) and central nervous system (CNS), as well as anti-infective and anti-ulcerants. Its APIs include solid dosage formulations for CVS, CNS, and anti-allergy categories; radiopharmaceuticals for the diagnosis, treatment, and monitoring of diseases; and allergy therapy products, including allergenic extracts and mixes, and skin test devices. The company also offers life sciences ingredients, such as pyridine and picoline; fine chemicals; crop science chemicals; nutrition products, including niacinamide, niacin (vitamin B3), and choline chloride; animal nutrition products in the category of vitamin and mineral premixes, betaine, acidifiers, toxin binders, growth promoters, and emulsifiers; acetyl products, which include acetic acid, monochloro acetic acid, acetic anhydride, ethyl acetate, and sodium mono chlor acetate; and specialty gases, such as liquid carbon dioxide and ethylene oxide mixtures. In addition, it provides contract manufacturing services in manufacturing sterile injectables, and solid and semi solid dosage forms; drug discovery services in bioinformatics, chemoinformatics, and crystallography structure directed molecular design and information technology; pre clinical services, such as medicinal chemistry, analytical chemistry, custom synthesis, library design, and clinical development and market launch services; and conducts integrated drug discovery and development programs on oncology, metabolic disorders, pain, and inflammation. The company was formerly known as Jubilant Organosys Limited and changed its name to Jubilant Life Sciences Limited in 2010. Jubilant Life Sciences Limited was incorporated in 1978 and is based in Noida, India.