JB Chemicals & Pharmaceuticals Ltd. :506943-IN: Earnings Analysis: 2017 By the Numbers : August 31, 2017

JB Chemicals & Pharmaceuticals Ltd. reports financial results for the year ended March 31, 2017.

We analyze the earnings along side the following peers of JB Chemicals & Pharmaceuticals Ltd. – Shilpa Medicare Limited and TTK Healthcare Limited (530549-IN and 507747-IN) that have also reported for this period.

Highlights

  • Gross margins widened from 30.50% to 32.36% compared to the same period last year, operating (EBITDA) margins now 17.85% from 18.45%.
  • Year-on-year change in operating cash flow of 36.69% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings rose compared to same period last year, despite decline in operating and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017 2016 2015 2014 2013
Relevant Numbers (Annual)
Revenues 13132.89 11711.71 11210.29 10010.95 8457.58
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 1840.63 1625.47 1004.05 614.96 794.44
Earnings Growth (YOY) 13.24 61.89 63.27 -22.59 -88.28
Net Margin 14.02 13.88 8.96 6.14 9.39
EPS 21.7 19.16 11.84 7.26 9.38
Return on Equity 14.43 14.92 9.86 5.97 7.99
Return on Assets 8.78 9.16 7.05 4.63 6.34

Access our Ratings and Scores for JB Chemicals & Pharmaceuticals Ltd.

Earnings Growth Analysis

The company’s earnings growth has been influenced by the year-on-year improvement in gross margins from 30.50% to 32.36%. However the company’s overhead costs have prevented it from fully capitalizing on these gross margin improvements. In fact, the company’s operating margins (EBITDA margins) showed no improvement over the same period last year.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

506943-IN‘s improvement in gross margin has been accompanied by an improvement in its balance sheet as well. This suggests that gross margin improvements are likely from operating decisions and not accounting gimmicks. Its working capital days have declined to 124.88 days from 157.11 days for the same period last year.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

506943-IN‘s change in operating cash flow of 36.69% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

Margins

Despite a decline in operating (EBIT) margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for JB Chemicals & Pharmaceuticals Ltd.

Company Profile

JB Chemicals & Pharmaceuticals Ltd. is a holding company, which engages in the research, development, and sale of pharmaceutical products. It operates through the following business units: India; Russia & CIS; Global; Contrast Media; API; and Business Development. The India business unit produces medicine for gastro, cardiac, and pain management. The Russia and CIS business unit markets and sells over the counter and prescription drugs. The Global business unit commercializes generic branded medicines. The Contrast Media business unit offers radiopaque substances such as lohexol, lopamidol, diatrazoic acid, gadopentatic acid, and iodixanol. The API business unit caters active pharmaceutical ingredients which includes atenelol, clinidipine, diclofenac acid, diclofenac potassium, nifedipine, and gadopentatic acid. The Business Development business unit deals with contract manufacturing, joint ventures, marketing partners, in-licensing of products, and distribution network. The company was founded on December 18, 1976 and is headquartered in Mumbai, India.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of 506943-IN.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any of our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.