Divi'S Laboratories Net Income surged on 30.6% and EBITDA Margin showed almost no change
28-05-2016 • About Divi'S Laboratories (
$DIVISLAB) • By InTwits
Divi'S Laboratories reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Divi'S Laboratories is a fast growth stock: FY2016 revenue growth was 21.2%, 5 year revenue CAGR was 23.6% at FY2016 ROIC 31.9%
- Divi'S Laboratories has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.3%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: ₹2,223m in FY2016, ₹1,367m in FY2015, ₹604m in FY2014, ₹411m in FY2013, ₹744m in FY2012
- The company has highly profitable business model: ROIC is 31.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Divi'S Laboratories's Revenue surged on 21.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 8.9% to 11.2% in FY2016.
Net Income margin increased on 2.1 pp from 27.3% to 29.4% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Divi'S Laboratories had CAPEX/Revenue of 10.5%. Divi'S Laboratories showed decline in CAPEX/Revenue of 5.4 pp from 15.9% in FY2013 to 10.5% in FY2016. Average CAPEX/Revenue for the last three years was 10.0%.
Return on investment
The company operates at high and attractive ROIC (31.9%) and ROE (28.6%). ROIC increased slightly on 1.4 pp from 30.5% to 31.9% in FY2016. ROE increased on 2.2 pp from 26.4% to 28.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.0x. Debt jumped on 59.5% while cash increased on 6.3%.
Divi'S Laboratories has no short term refinancing risk: cash is higher than short term debt (163.6%).
Management team
Divi'S Laboratories's CEO is Murali Krishna Prasad Divi. Murali Krishna Prasad Divi has 16 years tenure with the company.
Financial and operational results
Divi'S Laboratories ($DIVISLAB) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 18,584 | 21,399 | 25,253 | 31,149 | 37,764 | 21.2% |
| SG&A | | | | | 49 | |
| EBITDA | 6,915 | 8,165 | 10,152 | 11,658 | 14,144 | 21.3% |
| Net Income | 5,333 | 6,020 | 7,733 | 8,515 | 11,119 | 30.6% |
Balance Sheet
|
|---|
| Cash | 173 | 120 | 151 | 646 | 687 | 6.3% |
| Short Term Debt | 502 | 310 | 169 | 256 | 420 | 64.3% |
| Long Term Debt | 26 | 21 | 16 | 11 | 5 | -55.5% |
Cash flow
|
|---|
| Capex | 2,892 | 3,401 | 2,465 | 3,072 | 3,957 | 28.8% |
Ratios
|
|---|
| Revenue growth | 42.2% | 15.1% | 18.0% | 23.3% | 21.2% | |
| EBITDA growth | 38.8% | 18.1% | 24.3% | 14.8% | 21.3% | |
|
|---|
| EBITDA Margin | 37.2% | 38.2% | 40.2% | 37.4% | 37.5% | 0.0% |
| SG&A, % of revenue | | | | | 0.1% | |
| Net Income Margin | 28.7% | 28.1% | 30.6% | 27.3% | 29.4% | 2.1% |
| CAPEX, % of revenue | 15.6% | 15.9% | 9.8% | 9.9% | 10.5% | 0.6% |
|
|---|
| ROIC | 30.6% | 30.4% | 32.3% | 30.5% | 31.9% | 1.4% |
| ROE | 27.1% | 26.0% | 28.3% | 26.4% | 28.6% | 2.2% |
| Net Debt/EBITDA | 0.1x | 0.0x | 0.0x | -0.0x | -0.0x | 0.0x |
Peers in Pharmaceuticals
Below we provide Divi'S Laboratories 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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 19.8% | 14.7% | 12.6% | 8.6% | 11.4% |
|---|
| Divi'S Laboratories ($DIVISLAB) | - | 15.1% | 18.0% | 23.3% | 21.2% |
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 |
|---|
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | - |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | 24.1% |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| Marksans Pharma ($MARKSANS) | -27.2% | 15.0% | 18.1% | 23.2% | - |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 18.0% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | 37.5% |
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 ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | 13.8% |
| |
|---|
| Median (31 companies) | 7.7% | 7.5% | 5.7% | 6.0% | 8.1% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 15.6% | 15.9% | 9.8% | 9.9% | 10.5% |
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% | 34.1% |
| Ngl Fine-Chem ($NGLFINE) | 9.3% | 17.9% | 22.4% | 27.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 13.1% |
|---|
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | 31.9% |
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 ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x |
| |
|---|
| Median (48 companies) | 1.6x | 1.4x | 0.5x | 0.2x | 0.4x |
|---|
| Divi'S Laboratories ($DIVISLAB) | 0.1x | 0.0x | 0.0x | -0.0x | -0.0x |
