Fin455 Midterm-1 Presentation

Beximco Pharmaceuticals Limited

Section: 02

Submitted To
Mr. Mirza Ferdous (MzF)
Senior Lecturer, Department of Accounting & Finance,
North South University

Group Details
Name
Asif Iqbal Choudhury
Tanzina Sabrin Prova
Md.Tauhidur Rahman
Asheq Abeer Hossain
Md. Rahat Bin Islam
5 Midterm-1 Presentation
co Pharmaceuticals Limited
Section: 02

Submitted To
Mr. Mirza Ferdous (MzF)
, Department of Accounting & Finance,
North South University

Group Details
ID
103 0661 530
162 0146 020
162 0222 630
171 1714 030
171 2691 030
 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated
Profit or Loss and Other Comprehensive Income From the year 2

Year 2016-2017 2017-2018

BDT BDT
Net Sales Revenue 15,508,776,972 17,716,716,855
Cost of Goods Sold (8,323,895,349) (9,430,737,431)
Gross Profit 7,184,881,623 8,285,979,424

Operating Expenses (3,736,675,551) (4,259,811,440)

Administrative Expenses (522,396,449) (618,675,127)
Selling, Marketing and Distribution Expenses (3,214,279,102) (3,641,136,313)
Profit from Operations 3,448,206,072 4,026,167,984

Other Income 144,852,831 43,757,880

Finance Cost (557,003,162) (540,283,443)
Share of Loss of Associates
Profit Before Contribution to WPPF & Welfare Funds 3,036,055,741 3,529,642,421

Contribution to WPPF & Welfare Funds (144,574,083) (168,308,290)

Profit Before Tax 2,891,481,658 3,361,334,131

Income Tax Expenses (664,786,534) (828,679,830)

Current Tax (591,982,589) (792,620,241)
Derferred Tax Income/ (Expense) (72,803,945) (36,059,589)
Profit after Tax for the Period 2,226,695,124 2,532,654,301

Other Comprehensive Income - Unrealized Gain/(Loss) 2,579,507 481,697

Total Comprehensive Income for the Period 2,229,274,631 2,533,135,998

Earnings Per Share (EPS) / Adjusted EPS 5.49 6.25

Number of Shares used to compute EPS 405,556,445 405,556,445

es Consolidated Statement of
From the year 2017 - 2020

2018-2019 2019-2020
BDT BDT
22,816,629,795 25,611,947,655
(12,196,286,770) (13,712,847,509)
10,620,343,025 11,899,100,146

(5,554,169,458) (6,289,606,032)
(752,944,182) (792,951,709)
(4,801,225,276) (5,496,654,323)
5,066,173,567 5,609,494,114

139,917,665 293,558,304
(1,029,762,542) (1,013,804,085)
(29,325,720)
4,147,002,970 4,889,248,333

(200,937,234) (235,808,378)

3,946,065,736 4,653,439,955

(905,662,782) (1,108,956,854)
(803,760,846) (1,086,668,418)
(101,901,936) (22,288,436)
3,040,402,954 3,544,483,101

(1,852,559) (1,577,828)
3,038,550,395 3,542,905,273

7.48 8.67

405,556,445 405,556,445
 Beximco Pharmaceuticals Limited and its Subsidiaries Consolidated Statem
Flows From the year 2017 - 2020

Year 2016-2017 2017-2018

BDT BDT
Cash Flows from Operating Activities
Receipts from Customers and Others 15,028,477,642 17,195,399,333
Payments to Suppliers and Employees (11,480,328,595) (14,113,012,465)
Cash Generated from Operations 3,548,149,047 3,082,386,868

Interest Paid (557,003,162) (536,570,775)

Interest Received 161,110,825 54,928,425
Income Tax Paid (518,291,724) (781,630,595)
Net Cash Generated from Operating Activities 2,633,964,986 1,819,113,923

Cash Flow from Investing Activities

Acquisition of Property, Plant and Equipment (3,016,391,390) (4,951,352,340)
Intangible Assets (108,998,404) (106,921,036)
Investment in Subsidiary (2,125,186,000)
Disposal of Property, Plant and Equipment 22,059,127 14,114,722
Dividend Received 1,427,955 1,504,092
Decrease in Short Term Investment 552,460,907 547,179,732
Net Cash Used in Investing Activities (2,549,441,805) (6,620,660,830)

Cash Flows from Financing Activities

Net Increase /(Decrease) in Long Term Borrowings 32,424,297 1,859,021,877
Net Increase/(Decrease) in Short Term Borrowings 130,113,725 3,546,896,539
Share capital
Dividend Paid (193,154,407) (502,757,959)
Net Cash (Used in) / from Financing Activities (30,616,385) 4,903,160,457

Increase in Cash and Cash Equivalents 53,906,796 101,613,550

Cash and Cash Equivalents at Beginning of Year 221,121,229 292,122,396
Effect of exchange rate changes on Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year 275,028,025 393,735,946

Net Operating Cash Flow Per Share 6.49 4.49

nsolidated Statement of Cash Beximco Pharmaceuticals Limited and its Su
20 of Financial Position from

2018-2019 2019-2020 Year

BDT BDT
Assets
22,463,550,299 25,934,454,695 Non-Current Assets
(17,434,690,241) (18,467,458,543) Property, Plant and Equipment- Carrying Value
5,028,860,058 7,466,996,152 Right-of-use Assets
Intangible Assets
(1,032,409,014) (1,012,519,091) Goodwill
36,457,527 20,409,291 Other Investment
(1,072,991,667) (932,399,131) Other Non-current Assets
2,959,916,904 5,542,487,221
Current Assets
Inventories
(4,416,446,385) (2,243,555,782) Spares & Supplies
(128,619,282) (31,745,002) Accounts Receivable
Loans, Advances and Deposits
17,540,625 3,646,251 Advance Income Tax
1,491,901 1,427,930 Short Term Investment
16,032,638 323,364,536 Cash and Cash Equivalents
(4,510,000,503) (1,946,862,067) Total Assets

Equity and Liabilities

(1,412,334,115) (1,000,373,112) Equity Attributable to the Owners of the Company
3,684,312,230 (1,970,741,462) Issued Share Capital
100 Share Premium
(505,351,881) (601,957,017) Excess of Issue Price over Face Value of GDRs
1,766,626,334 (3,573,071,591) Capital Reserve on Merger
Revaluation Surplus
216,542,735 22,553,563 Unrealized Gain/(Loss)
393,735,946 610,494,299 Retained Earnings
215,618 1,968,657 Non-Controlling Interest
610,494,299 635,016,519 Total Equity

7.30 13.67 Non-Current Liabilities

Long Term Borrowings-Net of Current Maturity
Liability for Gratuity and WPPF & Welfare Funds
Deferred Tax Liability
Current Liabilities and Provisions
Short Term Borrowings
Long Term Borrowings-Current Maturity
Creditors and Other Payables
Accrued Expenses
Dividend Payable
Income Tax Payable

Total Equity and Liabilities

Limited and its Subsidiaries Consolidated Statement
ial Position from June 2017 - 2020

2017 2018 2019 2020

BDT BDT BDT BDT

24,953,316,701 32,394,686,712 35,949,930,818 37,069,663,021

24,472,468,013 30,524,692,707 33,853,977,656 35,000,809,631
202,689,556 240,163,919
462,968,347 1,280,695,416 1,334,921,698 1,275,560,330
546,691,213 546,691,213 546,691,213
17,880,341 36,507,658 5,329,379 3,751,551
6,099,718 6,321,316 2,686,377

9,130,816,169 11,344,199,700 13,264,161,542 13,049,078,919

3,468,089,061 5,058,847,681 5,924,031,678 5,944,769,057
636,102,892 663,911,096 726,127,262 775,528,787
2,167,339,867 2,761,509,393 3,334,958,905 3,305,451,434
1,697,679,418 2,094,229,902 2,309,503,747 2,388,313,122
32,568,508 35,681,115
886,576,906 339,397,174 323,364,536
275,028,025 393,735,946 610,494,299 635,016,519
34,084,132,870 43,738,886,412 49,214,092,360 50,118,741,940

25,072,425,900 27,081,962,616 29,588,317,284 32,495,120,607

4,055,564,450 4,055,564,450 4,055,564,450 4,055,564,450
5,269,474,690 5,269,474,690 5,269,474,690 5,269,474,690
1,689,636,958 1,689,636,958 1,689,636,958 1,689,636,958
294,950,950 294,950,950 294,950,950 294,950,950
1,190,203,818 1,159,277,845 1,131,853,004 1,125,767,451
3,875,065 4,356,762 2,504,203 926,375
12,568,719,969 14,608,700,961 17,144,333,029 20,058,799,733
269,874,176 276,006,553 302,329,006
25,072,425,900 27,351,836,792 29,864,323,837 32,797,449,613

5,605,667,422 7,368,863,860 6,603,936,369 5,963,327,323

2,635,907,025 4,017,425,267 2,595,607,792 1,651,590,390
1,117,094,429 1,324,166,498 1,860,904,996 2,144,053,434
1,852,665,968 2,027,272,095 2,147,423,581 2,167,683,499
 3,406,039,548 9,018,185,760 12,745,832,154 11,357,965,004
1,239,757,995 5,600,826,635 9,272,501,280 7,398,361,360
715,790,200 1,568,989,745 1,616,670,549 1,454,311,995
783,838,444 991,712,907 1,091,809,722 1,462,806,200
245,375,014 418,476,895 590,317,150 739,512,826
353,217 4,763,126 7,235,215 17,086,213
420,924,678 433,416,452 167,298,238 285,886,410

34,084,132,870 43,738,886,412 49,214,092,360 50,118,741,940

 Beximco Pharmaceuticals Limited
Margins 2017 2018 2019 2020
Profit Margin 14% 14% 13% 14%
Debt to Assets 26% 37% 39% 35%
Gross Margin 46% 47% 47% 46%
Operating Margin 22% 23% 22% 22%
EBT Margin 19% 19% 17% 18%
Management Effectiveness
Return on Assets 7% 6% 6% 7%
Return on Equity 9% 9% 10% 11%
Return on Investment Capital 6% 5% 5% 6%
Growth
Net Income Growth 13.63% 19.95% 16.60%
Operating Income Growth 16.76% 25.83% 10.72%
Revenue Growth 14.24% 28.79% 12.25%
EPS Growth 13.84% 19.68% 15.91%
Dividend Growth 160.29% 0.52% 19.12%
Cashflow
Operating Cashflow Growth -30.94% 62.71% 87.25%
Free Cash Flow Growth 43.16% 55.05% 4.02%
Dividend Paid Growth 160.29% 0.52% 19.12%
Dividend Payout Rate 8.66% 19.85% 16.63% 16.99%
 Margin Ratios Grow
50% 180.00%
45% 160.00%
40% 140.00%
35%
120.00%
30%
100.00%
25%
80.00%
20%
60.00%
15%
10% 40.00%
5% 20.00%
0% 0.00%
2017 2018 2019 2020 2018

Management Effectiveness Cashflo

12% 200.00%

10%
150.00%
8%
100.00%

Axis Title
6%
50.00%
4%

2% 0.00%
2017 2
0%
2017 2018 2019 2020 -50.00%
 Growth Ratios

2018 2019 2020

Cashflow Ratios
200.00%

150.00%

100.00%

50.00%

0.00%
2017 2018 2019 2020

-50.00%
 BDT
Cash and Cash Equivalents 635,016,519
Operating Current Liabilities 2,202,319,026
Net Working Capital 10,211,743,374
Total Financial Debt 15,118,973,301
Net Financial Debt 14,483,956,782

Beximco Pharmaceuticals Limited and its Subsidiaries

2020 Enterprise Value Balance Sheet
Book Values
BDT
Assets
Net Working Capital 10,211,743,374
Property, Plant and Equipment- Carrying Value 35,000,809,631
Right-of-use Assets 240,163,919
Intangible Assets 1,275,560,330
Goodwill 546,691,213
Other Investment 3,751,551
Other Non-current Assets 2,686,377

Enterprise Book Value 47,281,406,395

Book Value per Share 116.58

 aceuticals Limited and its Subsidiaries
nterprise Value Balance Sheet
Book Values BDT 20,000,000,000

BDT BDT 18,000,000,000

Liabilities and Equity BDT 16,000,000,000

Total Financial Debt 15,118,973,301 BDT 14,000,000,000

Minus, Cash & Cash Equivalents 635,016,519 BDT 12,000,000,000
Net Financial Debt 14,483,956,782 BDT 10,000,000,000
BDT 8,000,000,000
Equity Attributable to the Owners of the Company 32,495,120,607 BDT 6,000,000,000
Non-Controlling Interest 302,329,006 BDT 4,000,000,000
Total Equity 32,797,449,613
BDT 2,000,000,000
BDT -
Enterprise Book Value 47,281,406,395
Items 2017 2018 2019
Net Working Capital BDT 7,826,574,686 BDT 9,540,273,952 BDT 10,971,540,371
Total Financial Debt BDT 7,982,493,512 BDT 14,976,859,818 BDT 17,667,641,651
Net Financial Debt BDT 7,707,465,487 BDT 14,583,123,872 BDT 17,057,147,352

Recent Trend of NWC, TFD and NFD

Net Working Capital Total Financial Debt Net Financial Debt
BDT 20,000,000,000
BDT 18,000,000,000
BDT 16,000,000,000
BDT 14,000,000,000
BDT 12,000,000,000
BDT 10,000,000,000
BDT 8,000,000,000
BDT 6,000,000,000
BDT 4,000,000,000
BDT 2,000,000,000
BDT -
2017 2018 2019 2020
 2020
BDT 10,211,743,374
BDT 15,118,973,301
BDT 14,483,956,782

D
Debt

2020
 Number of shares outstanding 405,556,445
Current market price of share 176.5
Market Capitalization 71,580,712,543

Beximco Pharmaceuticals Limited and its Subsidiaries, 2020 Enterprise Value Ba

Right-hand side revalued at market values
Left-hand side brought into balance with right-hand side by adjusting long-ter

BDT
Assets
Net Working Capital 10,211,743,374

Property, Plant and Equipment- Carrying Value

Right-of-use Assets
Intangible Assets
75,852,925,951
Goodwill
Other Investment
Other Non-current Assets

Enterprise Market Value 86,064,669,325

ubsidiaries, 2020 Enterprise Value Balance Sheet
valued at market values
right-hand side by adjusting long-term assets

BDT
Liabilities and Equity
Total Financial Debt 15,118,973,301
Minus, Cash & Cash Equivalents 635,016,519
Net Financial Debt 14,483,956,782

Total Equity (Market Capitalization) 71,580,712,543

Enterprise Market Value 86,064,669,325

 Dividend Payout Ratio & Average Dividend Growth Rate
Year 2017
Dividend payment 193,154,407
Net Profit 2,229,274,631
Dividend Payout ratio 9%
Average payout ratio 16%
Dividend growth
Wieghted Average Dividend Growth Rate 20%

We can see super normal growth in 2018, and that's why dividend growth
rate fall the next year. So, we just weighted 80% on year 2020 as it seems
more sustainable.
Average Dividend Growth Rate Cost of equity: Gordon Model
2018 2019 2020 Current Share Price
502,757,959 505,351,881 601,957,017 Total share outstanding
2,533,135,998 3,038,550,395 3,542,905,273 Total dividend paid
20% 17% 17% Dividend Paid Per Share
16% Dividend growth rate
160% 1% 19%
Cost of Equity (re)
20%

and that's why dividend growth

Dividend growth
d 80% on year 2020 as it seems 1.8
160%
1.6

1.4

1.2

0.8

0.6

0.4
19%
0.2
1%
0
2018 2019 2020
ity: Gordon Model Share price as of 07 January
2021.
176.50
405,556,445
601,957,017
1.48
20%

20.912%
 Cash Flow to Equity
Audit
Years Dividends Stock Dividend Legal and Professional Expense
Fee
2017 193,154,407 3,165,382,980 725,000 1,500,000
2018 502,757,959 3,165,382,980 324,570 1,600,000
2019 505,351,881 3,165,382,980 177,993 2,090,000
2020 601,957,017 3,165,382,980 144,000 2,195,000
Equity Cost of Equity: Equity Payout
Membership Fees
Total Fees Total Equity Payout
and Subscription Number of Shares Outstanding
6,327,500 8,552,500 3,349,984,887 Share Price as at 07 January, 2021
6,327,500 8,252,070 3,659,888,869 Market Value of Equity
6,327,500 8,595,493 3,662,139,368 Growth
6,327,500 8,666,500 3,758,673,497 Cost of Equity (re)
y: Equity Payout

405,556,445
176.50
71,580,712,543
2.92%
8.32%
 Implied Tax Rate
Year 2017 2018 2019 2020
Tax Expense 664,786,534 828,679,830 905,662,782 1,108,956,854
Income Before Tax 2,891,481,658 3,361,334,131 3,946,065,736 4,653,439,955
Tax Rate 23% 25% 23% 24%
Implied Tax Rate (tc) 23.61%

We have taken the average of the tax rate,

since the fluctuation is not that much.
 Tax Rate
25%
25%
25%

24% 24%

24%

23% 23%
23%

ax rate, 23%
ch.
22%
2017 2018 2019 2020
 CAPM
Beta, b 1.55
Risk-free rate, krf 4.48%
Expected market return, E(km) 11%
Cost of equity, re 14.52400%

CAPM (Tax Adjusted)

Beta, b 1.55
Risk-free rate, krf 4.48%
Expected market return, E(km) 11%
Tax rate tc 23.61%
Cost of equity, re 15.11%
The company beta is taken from (source)
amarstock which shows that the market's risk has
little effect on the company's risk

Taken from (source)ceicdata.com , 182 days T-Bill

of Bangladesh as the lowest expectation from the
market.

The equity risk premium Stern.NYU has been taken

into account for expected market return.
 Implied Cost of Debt
Year 2017 2018 2019
Net Financial Debt 7,707,465,487 14,583,123,872 17,057,147,352
Interest Income 161,110,825 54,928,425 36,457,527
Interest Expense 557,003,162 536,570,775 1,032,409,014
Net Interest 395,892,337 481,642,350 995,951,487
Cost of Debt, rd 4.32% 6.30%
Implied Cost of Debt 5.90%

1) As the debt is decreasing, and cash is increasing we took the weighted average of the
cost of debts of each year. Also, more weights were allocated to the latest year's cost of
debt.

2) Allocation of weights: 2018- 20%; 2019- 30%; 2020- 50%

Year 2017 2018 2019

Cash & Cash Equivalents 275,028,025 393,735,946 610,494,299
Interest rate earned 16.43% 7.26%
Interest rate paid 4.81% 6.53%

Year 2017 2018 2019

Total Financial Debt 7,982,493,512 14,976,859,818 17,667,641,651
Interest Income 161,110,825 54,928,425 36,457,527
Interest Expense 557,003,162 536,570,775 1,032,409,014
Net Interest 395,892,337 481,642,350 995,951,487
Cost of Debt, rd 4.20% 6.10%
Implied Cost of Debt 5.70%
 Net Financial Debt
2020 18,000,000,000
14,483,956,782 16,000,000,000
20,409,291 14,000,000,000
1,012,519,091 12,000,000,000
992,109,800
10,000,000,000
6.29%
8,000,000,000

6,000,000,000

4,000,000,000

weighted average of the 2,000,000,000

the latest year's cost of 0
2017 2018 2019 2020

Cash & Cash Equivalents

700,000,000
2020 610,494,299
635,016,519

635,016,519 600,000,000
3.28%
6.42% 500,000,000

393,735,946
400,000,000
2020
15,118,973,301
300,000,000
275,028,025
20,409,291
1,012,519,091 200,000,000
992,109,800
6.05% 100,000,000

0
2017 2018 2019 2020
 Cost of Debt, rd
0.07
6.30% 6.29%
0.06

0.05
4.32%
0.04

0.03

0.02

0.01

0
2017 2018 2019 2020

Total Financial Debt

20,000,000,000

18,000,000,000 17,667,641,651

16,000,000,000 14,976,859,818 15,118,973,301

14,000,000,000

12,000,000,000

10,000,000,000
7,982,493,512
8,000,000,000

6,000,000,000

4,000,000,000

2,000,000,000

0
2017 2018 2019 2020
 Findings
Market Value of Equity ( E) 71,580,712,543

Market Value of Debt (D) 14,483,956,782

Implied Cost of Debt (rd) 5.90%
Implied Cost of Equity (re):
Gordon Model 20.91%
Total Equity Payout 8.32%
We took 10% of the Cost of equity from th
equity from the Total Equity Payout, 10% o
CAPM 14.52% & 45% of Cost of equity from the Tax-adjus
Tax-adjusted CAPM 15.11%
13.3%
Implied Tax Rate (tc) 23.61%

WACC 11.8%
e Cost of equity from the Gordon Model, 35% of Cost of
tal Equity Payout, 10% of Cost of equity from the CAPM
quity from the Tax-adjusted CAPM.
 Free Cash Flow of Beximco Pharma Limited
Year 2016-2017 2017-2018 2018-2019
BDT BDT BDT
Cash Flows from Operating Activities
Receipts from Customers and Others 15028477642 17195399333 22463550299
Payments to Suppliers and Employees -11480328595 -14113012465 -17434690241
Cash Generated from Operations 3548149047 3082386868 5028860058

Interest Paid -557003162 -536570775 -1032409014

Interest Received 161110825 54928425 36457527
Income Tax Paid -518291724 -781630595 -1072991667
Net Cash Generated from Operating Activities 2633964986 1819113923 2959916904

Cash Flow from Investing Activities

Acquisition of Property, Plant and Equipment -3016391390 -4951352340 -4416446385
Intangible Assets -108998404 -106921036 -128619282
Disposal of Property, Plant and Equipment 22059127 14114722 17540625
Net Cash Used in Investing Activities -3103330667 -5044158654 -4527525042
After tax net interst -428941411.9 -404288365.31 -795460498.1
Profit Before Tax 2891481658 3361334131 3946065736
Income Tax Expenses 664786534 828679830 905662782
Tax Rate 0.2299120702 0.2465330127 0.229510313

Free Cash Flow -898307092.9 -3629333096 -2363068636

Growth rate -3.0401919622 0.348897284
Short-term Growth Rate 0.864429573011564
 Free Cash Flow
2019-2020 3000000000
2499606059.4854
BDT 9
2000000000

25934454695 1000000000
-18467458543
0
7466996152 1- 2 3 4
-1000000000 898307092.90432
6
-1012519091 -
-2000000000
20409291 2363068636.1020
1
-932399131 -3000000000
-
3629333096.3135
5542487221 -4000000000 6

-2243555782 We have considered these three items as

-31745002 operating investment items.
3646251
-2271654533
-771226628.51
4653439955
1108956854
0.2383090498

2499606059.5
2.0577797112
11564
 2499606059.4854
9

1020
 Beximco Ph
Findings
Enterpris
FCF of 2020 2,499,606,059 Year
WACC 11.78% FCF
Short-term FCF Growth Rate 86% Terminal Value
Long-term FCF Growth Rate 6% Total
Enterprise Value Using DCF
Add: Cash & Cash Equivalents
Asset Value in 2020
Bangladesh's forecasted GDP, after Less: Total Financial Debt of
3years, is around 8%. Pharmaceuticals 2020
Industry is expected to grow at 12% for Equity Value
next couple of decades. But it is very
unlikely for Beximco Pharmaceuticals, No. of Shares Outstanding
to grow in long term at that much rate. Equity Value Per Share
So, we took 6% as long term growth in
the most possible scenario.
 Beximco Pharmaceuticals Limited
Enterprise Value Using CCF
2020 2021 2022 2023 2024
2,499,606,059 4,660,339,458 8,688,874,706 16,199,794,958 30,203,376,797
- - - - 553,692,916,587
4,660,339,458 8,688,874,706 16,199,794,958 583,896,293,384
375,209,774,436
635,016,519
375,844,790,955
15,118,973,301
360,725,817,654
405,556,445
889.46
 Sales
Year 2017 2018 2019
Sales 15,508,776,972 17,716,716,855 22,816,629,795
Growth Rate 14.24% 28.79%
Implied Growth Rate 17.91%

Current Assets
Year 2017 2018 2019
Current Assets 9,130,816,169 11,344,199,700 13,264,161,542
Growth Rate 24.24% 16.92%
Implied Growth Rate 10.97%

Current Liabilities
Year 2017 2018 2019
Total Current Liabilities 3,406,039,548 9,018,185,760 12,745,832,154
Growth Rate 164.77% 41.33%
Implied Growth Rate 45.13%

Net Fixed Assets

Year 2017 2018 2019
Net Fixed Assets 24,472,468,013 30,524,692,707 33,853,977,656
Growth Rate 24.73% 10.91%
Implied Growth Rate 10.66%

Cost of Goods Sold

Year 2017 2018 2019
Cost of Goods Sold 8,323,895,349 9,430,737,431 12,196,286,770
Growth Rate 13.30% 29.32%
Implied Growth Rate 19.36%

Operating Expenses
Year 2016-2017 2017-2018 2018-2019
Operating Expenses 3,736,675,551 4,259,811,440 5,554,169,458
Growth Rate 14.00% 30.39%
Implied Growth Rate 19.15%

Depreciation
 Depreciation
Year 2017 2018 2019
Depreciation 20,402,482 11,757,201 9,175,291
Growth rate -42.37% -21.96%
Implied Growth Rate -20.85%

Interest/ Debt
Year 2017 2018 2019
Interest Expense 557,003,162 536,570,775 1,032,409,014
Total Debt 7,982,493,512 14,976,859,818 17,667,641,651
Interest/ Debt 6.98% 3.58% 5.84%
Growth rate -48.66% 63.10%
Implied Growth Rate 16.50%

Non Current Liabilities

Year 2017 2018 2019
Non Current Liabilities 5,605,667,422 7,368,863,860 6,603,936,369
Growth rate 31.45% -10.38%
Implied Growth Rate -1.67%
 2020
25,611,947,655
We have taken 35% of year 2017-2018 and 30% of year
12.25% 2018-2019 and 35% of year 2019-20. Since year 2018-19
growth was way higher.

2020
We have taken 20% of year 2017-2018 and 40% of year
13,049,078,919 2018-2019 and 40% of year 2019-20. Because, year 2018
-1.62% growth was lot more different than next two years.

2020
We have taken 20% of year 2017-2018 and 40% of year
11,357,965,004 2018-2019 and 40% of year 2019-20. Because, year 2018
-10.89% growth was lot more different than next two years.

2020
35,000,809,631 We have taken 20% of year 2017-2018 and 40% of year
2018-2019 and 40% of year 2019-20. Because, year 2018
3.39% growth was lot more different than next two years.

2020
13,712,847,509 We have taken 20% of year 2017-2018 and 40% of year
12.43% 2018-2019 and 40% of year 2019-20. Because, year 2018
growth was lot more different than next two years.

2019-2020
6,289,606,032 We have taken all years equal percentages. Because, the
13.24% growth is very little each year.
 2020 We have weighted more gradually on recent years.
8,114,071
-11.57%

2020
1,012,519,091
15,118,973,301 We have weighted more gradually on recent years.
6.70%
14.61%

2020
We have weighted more gradually on recent years.
5,963,327,323
-9.70%
 Sales Growth Rate
35.00%
30.00% 28.79%
25.00%
20.00% Cur
15.00%
14.24% 30.00%
12.25%
10.00% 25.00%
24.24%
5.00% 20.00%
0.00%
15.00%
1 2 3
10.00%
5.00%
Current Liabiities 0.00%
1
180.00%
164.77% -5.00%
160.00%
of year
ar 2018 140.00%
rs. 120.00%
100.00%
80.00%
Net
60.00% 0.3
41.33%
40.00% 24.73%
0.25
20.00%
0.2
0.00% -10.89%
-20.00% 1 2 3 0.15
0.1
0.05
0
Cost of Goods Sold 2018

35.00% Growth R
29.32%
30.00%

25.00%

20.00%
13.30%
15.00%
Opera
12.43%
35.00%
10.00%

5.00% 30.00%

0.00% 25.00%
1 2 3
20.00%

15.00% 14.00%

10.00%
Depreciation 5.00%
0.00% 0.00%
-5.00% 1 2 3 1
-10.00%
 15.00% 14.00%

10.00%
Depreciation 5.00%
0.00% 0.00%
-5.00% 1 2 3 1
-10.00%
-11.57%
-15.00%
-20.00%
-21.96%
-25.00%
Int
-30.00%
80.00%
-35.00%
60.00%
-40.00%
-42.37% 40.00%
-45.00%
20.00%
0.00%
1
-20.00%
-40.00%
-48.66%
-60.00%

Non Current Liabilities

35.00%
30.00% 31.45%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00% 1 2 3
-10.00% -10.38% -9.70%
-15.00%
 Current Assets

4%

16.92%

-1.62%
2 3

Net Fixed Assets

10.91%

3.39%

2019 2020

Growth Rate Linear (Growth Rate)

Operating Expenses

30.39%

14.00% 13.24%

1 2 3
 14.00% 13.24%

1 2 3

Interest/ Debt
%
% 63.10%

%
%
14.61%
%
1 2 3
%
%
-48.66%
%
 Implied Growth Rates
Sales 17.91%
Cost of sales 19.36%
Operating Expenses 19.15%
Implied Tax Rate 23.61%
Net Fixed Assets 10.66%
Current Assets 10.97%
Current Liabilities 45.13%
Depriciation -20.85%
Interest/ Debt 16.50%

Pro-Forma Income Statement

Year 2021 2022
Turnover 30,198,162,301 35,605,609,484
Cost of sales (16,368,095,789) (19,537,485,527)
Gross profit 13,830,066,512 16,068,123,957

Operating Expenses (7,494,013,228) (8,929,054,375)

Interest Income 22,648,066 25,132,422
Total Operating Expenses (7,471,365,161) (8,903,921,953)

Operating profit 6,358,701,351 7,164,202,004

Interest Expense (1,179,617,664) (1,374,292,935)

Profit before Tax 5,179,083,686 5,789,909,068
Income Tax Expenses (1,222,606,147) (1,366,801,319)
Profit for the year 3,956,477,540 4,423,107,749
 We
We kept
kept the
the equity
equity items
items unchanged.
unchanged.
e Statement Current
Current assets,
assets, non-current
non-current assets,
assets, current
current liabilities
liabilities and
and non-cur
non-cu
liabilities,
liabilities, are
are multiplied
multiplied by
by their
their implied
implied growth
growth rate.
rate.
2023 2024
41,981,343,570 49,498,751,278
(23,320,571,046) (27,836,183,584)
18,660,772,524 21,662,567,694

(10,638,893,956) (12,676,153,583)
27,889,296 30,948,583
(10,611,004,660) (12,645,205,000)

8,049,767,864 9,017,362,694

(1,601,095,956) (1,865,328,850)
6,448,671,908 7,152,033,844
(1,522,312,901) (1,688,352,818)
4,926,359,007 5,463,681,026
 changed.
nchanged.
assets,
assets, current
current liabilities
liabilities and
and non-current
non-current
their
their implied
implied growth
growth rate.
rate.
 Implied Growth Rates
Sales 17.91%
Cost of sales 19.36%
Operating Expenses 19.15%
Implied Tax Rate 23.61%
Net Fixed Assets 10.66%
Current Assets 10.97%
Current Liabilities 45.13%
Depriciation/Non-current Assets -20.85%
Non Current Liabilities -1.67%
Interest/ Debt 16.50%

Pro Forma Balance Sheet

Year 2021 2022
Assets
Non-Current Assets 41,022,744,742 45,397,380,204
Property, Plant and Equipment- Carrying Value 38,733,270,342 42,863,757,929
Right-of-use Assets 265,774,823 294,116,856
Intangible Assets 1,411,585,150 1,562,115,556
Goodwill 604,989,964 669,505,650
Other Investment 4,151,614 4,594,339
Other Non-current Assets 2,972,850 3,289,873

Current Assets 14,480,483,750 16,068,905,010

Inventories 6,596,874,175 7,320,511,270
Spares & Supplies 860,599,592 955,002,149
Accounts Receivable 3,668,039,413 4,070,401,094
Loans, Advances and Deposits 2,650,296,589 2,941,018,054
Cash and Cash Equivalents 704,673,981 781,972,443
Total Assets 55,503,228,492 61,466,285,214

Equity and Liabilities

Total Equity 30,804,557,274 30,804,557,274
Share Capital 4055564450 4055564450
Share Premium 5,269,474,690 5,269,474,690
Capital Reserve on Merger 294,950,950 294,950,950
Revaluation Surplus 1,125,767,451 1,125,767,451
Retained Earnings 20,058,799,733 20,058,799,733

Non-Current Liabilities 5,863,524,902 5,765,392,777

Long Term Borrowings-Net of Current Maturity 1,623,949,325 1,596,770,861
Liability for Gratuity and WPPF & Welfare Funds 2,108,170,493 2,072,888,089
Deferred Tax Liability 2,131,405,084 2,095,733,826

Current Liabilities and Provisions 16,484,096,132 23,923,777,296

Short Term Borrowings 10,737,425,220 15,583,491,362
Long Term Borrowings-Current Maturity 2,110,679,045 3,063,280,814
Creditors and Other Payables 2,123,006,896 3,081,172,529
Accrued Expenses 1,073,273,294 1,557,668,134
Dividend Payable 24,797,644 35,989,436
Income Tax Payable 414,914,033 602,175,020
Total Equity and Liabilities 53,152,178,308 60,493,727,346
et Turnover, Cost of goods sold, Administrative, Selling and
distribution Expenses and Income Tax Expense are calculated us
the implied growth shown in details in the growth rate sheet.
2023 2024

50,238,523,587 55,595,922,957
47,434,717,689 52,493,121,250
325,481,262 360,190,346
1,728,698,415 1,913,045,549
740,901,243 819,910,409
5,084,276 5,626,459
3,640,702 4,028,944

17,831,566,452 19,787,581,164
8,123,526,966 9,014,628,615
1,059,760,094 1,176,009,350
4,516,899,412 5,012,375,888
3,263,629,901 3,621,630,311
867,750,079 962,937,000
68,070,090,039 75,383,504,121

30,804,557,274 30,804,557,274
4055564450 4055564450
5,269,474,690 5,269,474,690
294,950,950 294,950,950
1,125,767,451 1,125,767,451
20,058,799,733 20,058,799,733

5,668,902,994 5,574,028,067
 1,570,047,257 1,543,770,900
2,038,196,173 2,004,084,862
2,060,659,563 2,026,172,304

34,721,170,970 50,391,696,037
22,616,707,270 32,824,187,845
4,445,815,373 6,452,322,046
4,471,782,062 6,490,008,145
2,260,682,372 3,280,984,360
52,232,361 75,806,119
873,951,532 1,268,387,521
71,194,631,238 86,770,281,378
 rative, Selling and
Expense are calculated using
n the growth rate sheet.
 FCF Calculation from Proforma Statements
Year 2021 2022
Profit after tax 3,956,477,540 4,423,107,749
Add back depreciation 6,422,625 5,083,775
Subtract increase in operating current assets 1,361,747,369 1,511,122,798
Add back increase in operating current liabilities 993,961,164 1,442,560,473
Subtract increase in fixed assets 3,732,460,711 4,130,487,588
Add back after-tax interest on debt 278,467,754.93 324,423,989.15
Free cash flow 141,121,004 553,565,601
Growth 292.26%
Mean Growth

Renata Limited
Enterprise Value Using DCF
Year 2021 2022
Free cash flow 141,121,004 553,565,601
Terminal Value
Total 141,121,004 553,565,601
Enterprise value 25,0
Add: Cash & Cash Equivalents 6
Asset Value in 2020 25,6
Less: Total Financial Debt of 2020 15,1
Equity Value 10,5
No. of Shares Outstanding 4
Equity Value Per Share
tatements The Depreciation rate of -20.85% is used to
calculate the forecasted depreciation.
2023 2024
4,926,359,007 5,463,681,026 The Implied Tax rate of 23.61% is used to
4,024,019 3,185,179 calculate the after-tax interest on debt.
1,676,883,806 1,860,827,791
The forecasted Free Cash Flow growth is
2,093,623,771 3,038,528,072 around 158.78% between 2021 and 2024.
4,570,959,760 5,058,403,561
377,964,496.34 440,340,928.14 The Proforma Equity Value per share is BDT
26. This is 85.87% less than current market
1,154,127,728 2,026,503,852 value per share, BDT 176.5.
108.49% 75.59%
158.78%

CF
2023 2024
1,154,127,728 2,026,503,852
Findings
37,150,178,130
1,154,127,728 39,176,681,981 WACC 11.78%
25,052,871,652 Long-term growth rate 6%
635,016,519
25,687,888,171
15,118,973,301
10,568,914,870
405,556,445
26
 Recommendation: "HOLD"

1.       On 15 November 2020, a tripartite MoU was signed between SII, Bangladesh pharmaceutical co
Beximco. Pharmaceuticals Ltd (BPL), Oxford/AstraZeneca COVID-19 vaccine.

2.       NFD of Beximco. Pharma. is positive and growing and Bangladesh leaves the LDC category, possi
When that happens, other companies can invest in other poor economic countries but Beximco. Pharm
of excess cash.

3.       β = 1.55 indicating higher volatility!

4.      Recent years, Dividend growth rates are very similar, making stocks unattractive.

5.       According to EBV, EMV and EV using Proforma DCF calculation, Beximco. Pharma. is overvalued
recommend to hold to sell until the vaccine arrives and the market price increases.