FINANCIAL STATEMENT

ANALYSIS OF SUNPHARMA
INDUSTRIES
Presented By:
Padmaraj
Pratheesh
Gourav
Prakash
Abhishek

INTRODUCTION
No. 1 Pharma Company in India & Ranked 5th in
the US (Market Size)
Largest Indian Pharma Company in Emerging
Markets
Presence in more than 150 countries across
Branded and Generic markets
Segment - Specialty products, branded generics,
complex generics, pure generics & APIs

Profitability Ratios
Net Margin
Gross Margin

40%

84%
35%

83%

82%

82%

80%

30%

80%

32%

32%

20%

76%
75%
74%

10%

70%

5%
FY11

FY12

FY13

FY14

FY15

17%

15%

72%

68%

32%

25%

78%

74%

35%

0%

FY11

FY12

FY13

FY14

FY15

Profitability Ratios
Ratio

2013

2014

2015

Industry Average

ROE

24%

31%

19%

25%

Net
Margin

32%

35%

18%

14%

ROE
35%
30%
25%
ROE

20%
15%
10%
5%
0%
2013

2014

2015

Dupont Analysis

Operatin
g
Efficienc
y

Return
on
Equity
Asset
use
Efficienc
y

Financial
Leverag
e

Dupont Analysis

Operatin
g
Efficiency

Return
on
Equity
Asset
use
Efficienc
y

Financial
Leverag
e

Operating Efficiency
Ratio

2013

2014

2015

Industry Average

ROE

24%

31%

19%

25%

Net
Margin

32%

35%

18%

14%

Net Margin
35%
30%
25%
Net Margin

20%
15%
10%
5%
0%
2013

2014

2015

Dupont Analysis

Dupont Analysis

Operatin
g
Efficienc
y

Return
on
Equity
Asset
use
Efficienc
y

Financial
Leverag
e

Asset Efficiency Ratio

Ratio

2013

2014

2015

Industry Average

Assets
Turnover

0.56

0.64

0.69

1.29

Fixed
Assets
Turnover

2.21

2.75

2.48

2.33

Assets Turnover Ratio

0.57
0.56
0.56
0.55
0.55
0.54
0.54
0.53
2013

Assets Turnover
Ratio

2014

2015

Asset Efficiency Ratio

Ratio

2013

2014

2015

Industry Average

Assets
Turnover

0.54

0.64

0.69

1.29

Fixed
Assets
Turnover

2.21

2.75

2.48

2.33

Fixed Assets Turnover Ratio

3
2.5
2
1.5
1
0.5
0
2013

Fixed Assets
Turnover Ratio

2014

2015

Assets
Fixed
Assets

Current
Assets

Assets
Fixed
Assets

Current
Assets

Fixed Asset efficiency seems to be fine but not the Current Assets Efficiency

Assets
Fixed
Assets

Current
Assets

Liquidity Ratios
2013

2014

2015

Industry Average

Current
Ratio

2.6

3.4

2.3

1.4

Quick
Ratio

3.4

2.6

1.7

1.3

Chart Title
4
3

Column2

2
1
0
2013

2014

2015

Liquidity Ratios
2013

2014

2015

Industry Average

Current
Ratio

2.6

3.4

2.3

1.4

Quick
Ratio

3.4

2.6

1.7

1.3

Quick Ratio
4
3

Quick Ratio

2
1
0
2013

2014

2015

Efficiency Ratios
Ratio

2013

2014

2015

Industry
Average

Inventory
Turnover

4.36

5.12

4.81

4.64

Receivables
Turnover

4.66

7.27

5.14

5.11

Collection
Period

78

50

71

Payables
Turnover

10.62

12.04

8.65

Inventory Turnover Ratio

5.5
5

Inventory Turnover
Ratio

4.5
4
3.5
2013

2014

2015

Efficiency Ratios
Ratio

2013

2014

2015

Industry
Average

Inventory
Turnover

4.36

5.12

4.81

4.64

Receivables
Turnover

4.66

7.27

5.14

5.11

Collection
Period

78

50

71

Payables
Turnover

10.62

12.04

8.65

Receivables Turnover

8
6

Inventory
Receivables Ratio

4
2
0
2013

2014

2015

Efficiency Ratios
Ratio

2013

2014

2015

Industry
Average

Inventory
Turnover

4.36

5.12

4.81

4.64

Receivables
Turnover

4.66

7.27

5.14

5.11

Collection
Period

78

50

71

Payables
Turnover

10.62

12.04

8.65

Collection Period
100
80
60
40
20
0
2013

Collection Period

2014

2015

Efficiency Ratios
Ratio

2013

2014

2015

Industry
Average

Inventory
Turnover

4.36

5.12

4.81

4.64

Receivables
Turnover

4.66

7.27

5.14

5.11

Collection
Period

78

50

71

Payables
Turnover

10.62

12.04

8.65

Payables Turnover Ratio

15
Payables Turnover
Ratio

10
5
0
2013

2014

2015

DuPont Analysis

Operatin
g
Efficienc
y

Return
on
Equity
Asset
use
Efficienc
y

Financial
Leverag
e

DuPont Analysis

Operatin
g
Efficienc
y

Return
on
Equity
Asset
use
Efficienc
y

Financial
Leverag
e

Debt Coverage Ratios

Ratio

2013

2014

2015

Industry Average

Debt/Equity

1.3%

13%

30%

38%

Interest
Cover

110.8

161.3

13.5

84.94

Debt/Equity Ratio
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013

Debt/Equity Ratio

2014

2015

Debt Coverage Ratios

Ratio

2013

2014

2015

Industry Average

Debt/Equity

1.3%

13%

30%

38%

Interest
Cover

110.8

161.3

13.5

84.94

Interest Cover Ratio

200
150
Interest Cover Ratio

100
50
0
2013

2014

2015

Diagno
sis
Poor Management
of Current Assets

High debt and

Interest costs

Solutio
ns

Reason
s

Reducing the
Operating Cycle,
(Payback period,
Payable turnover),
Collection period)

Integration costs
and Costs
incurred on
Ranbaxy

Reducing Interest
costs and Debt

Increase in
borrowing
(Ranbaxy debts
taken on books)

Increase in R&D
expenditure