cipla valuation

8/10/2019 CIPLA Valuation

1/12

Mar '07 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13 Mar '14

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 155.46 155.46 155.46 160.58 160.58 160.58 160.58 160.58

Equity Share Capital 155.46 155.46 155.46 160.58 160.58 160.58 160.58 160.58Share Application Money 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Preference Share Application Money 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Employee Stock Opiton 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Reserves 3071.58 3590.74 4183.37 5741.02 6505.55 7478.35 8858.10 9939.35

Revaluation Reserves 8.97 8.97 8.97 0.00 0.00 0.00 0.00 0.00

Networth 3236.01 3755.17 4347.80 5901.60 6666.13 7638.93 9018.68 10099.93

Secured Loans 7.25 16.98 2.79 0.41 17.95 10.00 9.49 351.00

Unsecured Loans 116.31 563.55 937.45 4.66 523.03 3.46 957.44 877.34

Total Debt 123.56 580.53 940.24 5.07 540.98 13.46 966.93 1228.34

Plug

Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Liabilities 3359.57 4335.70 5288.04 5915.64 7207.11 7652.39 9985.61 11328.27

Application Of Funds

Gross Block 1799.71 2201.79 2693.29 2897.26 4240.55 4626.90 5317.52 8672.15

Less: Accum. Depreciation 411.64 540.43 700.80 886.09 1146.37 1411.11 1707.55 2175.68Net Block 1388.07 1661.36 1992.49 2011.17 3094.18 3215.79 3609.97 6496.47

Capital Work in Progress 73.19 233.12 366.32 684.24 285.34 371.17 377.79 441.84

Investments 116.53 93.48 80.05 246.41 590.77 1268.81 2532.44 708.57

Inventories 978.60 1120.49 1398.32 1512.58 1906.16 1850.08 2387.07 2895.26

Sundry Debtors 1028.78 1406.49 1852.86 1566.63 1490.82 1553.58 1668.84 1638.89

Cash and Bank Balance 57.12 79.54 53.23 61.54 95.97 90.46 143.01 175.16

Total Current Assets 2064.50 2606.52 3304.41 3140.75 3492.95 3494.12 4198.92 4709.31

Loans and Advances 696.03 1137.94 1113.34 1226.04 1133.41 1000.36 938.65 1047.05

Fixed Deposits 75.16 0.16 0.16 0.52 0.00 0.00 0.00 0.00

Total CA, Loans & Advances 2835.69 3744.62 4417.91 4367.31 4626.36 4494.48 5137.57 5756.36

Deffered Credit 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Current Liabilities 640.78 980.07 1177.02 1177.12 1169.28 1454.63 1389.79 1732.62

Provisions 413.13 416.81 397.71 216.37 220.26 243.23 282.37 342.35

Total CL & Provisions 1053.91 1 396.88 1 574.73 1 393.49 1 389.54 1 697.86 1 672.16 2074.97

Net Current Assets 1781.78 2347.74 2843.18 2973.82 3236.82 2796.62 3465.41 3681.39

Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Assets 3359.57 4335.70 5282.04 5915.64 7207.11 7652.39 9985.61 11328.27

Consolidated Balance Sheet


2/12


3/12

Mar'15 Mar'16 Mar'17 Mar'18 Mar'19

12 mths 12 mths 12 mths 12 mths 12 mths

160.58 160.58 160.58 160.58 160.58 160.58

160.58 160.58 160.58 160.58 160.580.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

11640.43 13682.20 16225.18 19390.75 23329.27

0.00 0.00 0.00 0.00 0.00

11801.01 13842.78 16385.76 19551.33 23489.85

0.16 223.08 261.67 309.75 369.59 444.04

1212.14 1421.87 1683.07 2008.22 2412.77

0.12 1435.22 1683.54 1992.81 2377.81 2856.80

577.80 -1.53 -561.24 -1353.13 -2443.29

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

13814.04 15524.79 17817.34 20576.01 23903.37

0.10 9539.37 10493.30 11542.63 12696.89 13966.58

2585.58 3036.48 3532.46 4078.04 4678.186953.78 7456.82 8010.17 8618.85 9288.40

0.06 658.67 787.89 973.99 1204.05 1488.44

704.63 704.63 704.63 704.63 704.63 704.63

0.51 3243.49 3879.85 4796.26 5929.12 7329.56

0.46 2962.13 3543.29 4380.21 5414.80 6693.76

174.25 208.44 257.67 318.54 393.77

0.55 6379.87 7631.58 9434.14 11662.45 14417.09

0.18 2072.18 2478.74 3064.20 3787.96 4682.67

0.00 0.00 0.00 0.00 0.00

8452.05 10110.32 12498.34 15450.41 19099.75

0.00 0.00 0.00 0.00 0.00

0.20 2282.94 2730.85 3375.87 4173.24 5158.94

0.06 672.15 804.02 993.93 1228.69 1518.91

2955.09 3534.87 4369.80 5401.93 6677.85

5496.96 6575.44 8128.54 10048.48 12421.90

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

13814.04 15524.79 17817.34 20576.01 23903.37

------------------- in Rs. Cr. -------------------

ProjectionsBase Value


4/12

Mar '07 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 3656.92 4306.43 5295.33 5677.07 6323.84 7020.71

Excise Duty 94.93 90.66 61.04 52.16 0.00 0.00Net Sales 3561.99 4215.77 5234.29 5624.91 6323.84 7020.71

Other Income 100.51 133.89 -143.86 109.80 91.68 139.52

Stock Adjustments -30.73 41.37 113.55 184.09 138.87 -5.65

Total Income 3631.77 4391.03 5203.98 5918.80 6554.39 7154.58

Expenditure

Raw Materials 1754.89 2174.16 2513.11 2687.54 3029.50 2831.12

Power & Fuel Cost 86.71 96.90 91.71 92.15 198.55 235.35

Employee Cost 184.59 255.45 271.38 319.10 565.59 772.52

Other Manufacturing Expenses 186.47 233.90 262.65 259.67 0.00 0.00

Selling and Admin Expenses 418.36 547.23 887.33 868.03 0.00 0.00

Miscellaneous Expenses 78.45 96.67 76.94 182.72 1299.83 1517.22

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00 0.00

Total Expenses 2709.47 3404.31 4103.12 4409.21 5093.47 5356.21

Operating Profit 821.79 852.83 1244.72 1399.79 1369.24 1658.85

PBDIT 922.30 986.72 1100.86 1509.59 1460.92 1798.37

Interest 11.21 18.07 52.23 28.30 25.10 38.34

PBDT 911.09 968.65 1048.63 1481.29 1435.82 1760.03

Depreciation 103.37 130.68 151.79 167.07 273.33 312.22

Other Written Off 0.00 0.00 0.00 0.00 0.00 0.00

Profit Before Tax 807.72 837.97 896.84 1314.22 1162.49 1447.81Extra-ordinary items 0.00 0.00 -1.32 11.87 0.00 0.00

PBT (Post Extra-ord Items) 807.72 837.97 895.52 1326.09 1162.49 1447.81

Tax 139.95 136.93 124.50 243.50 195.36 306.51

Reported Net Profit 667.77 701.04 771.02 1082.59 967.13 1141.30

Minority Interest 0.00 0.00 0.00 0.00 0.00 0.00

Share Of P/L Of Associates 0.00 0.00 0.00 0.00 -22.44 -2.94

Net P/L After Minority Interest & Share Of Associates 667.77 701.04 772.34 975.72 989.57 1144.24

Preference Dividend 0.00 0.00 0.00 0.00 0.00 0.00

Equity Dividend 155.46 155.46 155.46 160.58 224.81 160.58

Corporate Dividend Tax 26.42 26.42 26.42 26.67 36.72 26.05

Addition to Reserve

Per share data (annualised)

Shares in issue (lakhs) 7772.91 7772.91 7772.91 8029.21 8029.21 8029.21

Earning Per Share (Rs) 8.59 9.02 9.92 13.48 12.05 14.21

Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00 0.00

Book Value (Rs) 41.52 48.20 55.82 73.50 83.02 95.14

Consolidated Profit & Loss account


5/12

Mar '13 Mar '14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19

12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Base+4% Base+8% Base+8% Base+10%

8279.33 10100.39 0.16 11678.04 13969.24 17268.73 21347.55 26389.77

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.008279.33 10100.39 11678.04 13969.24 17268.73 21347.55 26389.77

261.91 265.37 119.85 119.85 119.85 119.85 119.85 119.85

290.60 64.25 99.54 99.54 99.54 99.54 99.54 99.54

8831.84 10430.01 11897.44 14188.63 17488.12 21566.94 26609.17

3335.01 4030.57 0.45 5279.81 6315.69 7807.44 9651.53 11931.19

233.12 218.63 0.02 283.90 339.60 419.81 518.97 641.55

1036.26 1542.96 0.09 1014.02 1212.97 1499.46 1853.63 2291.46

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

1767.69 2239.43 0.12 1383.10 1654.46 2045.24 2528.32 3125.51

0.00 0.00 0.00 0.00 0.00 0.00 0.00

6372.08 8031.59 7960.83 9522.72 11771.96 14552.46 17989.70

2197.85 2133.05 3816.75 4 546.06 5596.31 6894.63 8 499.61

2459.76 2 398.42 3936.61 4 665.91 5 716.16 7 014.48 8619.46

33.91 145.74 0.13 176.83 207.05 244.07 290.16 347.52

2425.85 2 252.68 3759.78 4 458.86 5 472.10 6 724.33 8271.95

330.48 372.64 0.04 409.90 450.89 495.98 545.58 600.14

0.00 0.00 0.00 0.00 0.00 0.00 0.00

2095.37 1 880.04 3349.87 4 007.97 4 976.11 6 178.74 7671.810.00 0.00 0.00 0.00 0.00 0.00 0.00

2095.37 1 880.04 3349.87 4 007.97 4 976.11 6 178.74 7671.81

544.31 463.38 0.35 1172.46 1402.79 1741.64 2162.56 2685.13

1551.06 1416.66 2177.42 2 605.18 3234.47 4016.18 4 986.67

0.00 15.93 33.13 33.13 33.13 33.13 33.13 33.13

6.21 12.32 0.00 0.00 0.00 0.00 0.00

1505.08 1 388.41 2144.29 2 572.05 3 201.34 3 983.05 4953.54

0.00 0.00 0.00 0.00 0.00 0.00 0.00

160.58 160.58 0.17 379.56 454.13 563.83 700.10 869.27

27.29 27.29 0.17 63.64 76.15 94.54 117.39 145.75

1701.08 2041.77 2542.98 3165.57 3938.52

8029.21 8 029.21 8029.21 8 029.21 8 029.21 8 029.21 8029.21

19.32 17.64 27.12 32.45 40.28 50.02 62.11

0.00 0.00

112.32 125.79

------------------- in Rs. Cr. -------------------

ProjectionsBase Value


6/12

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Raw Materials/Gross Sales 0.480 0.505 0.475 0.473 0.479 0.403 0.403

Pwer & Fuel Cost/Net Sales 0.024 0.023 0.017 0.016 0.031 0.034 0.028

Employee Cost/Net Sales 0.050 0.059 0.051 0.056 0.089 0.110 0.125

Misc Expenses/Net Sales 0.021 0.022 0.015 0.032 0.206 0.216 0.214

Tax/PBT 0.173 0.163 0.139 0.184 0.168 0.212 0.260

Dividend/PAT 0.233 0.222 0.202 0.148 0.232 0.141 0.104

Dividend Tax/Dividend 0.170 0.170 0.170 0.166 0.163 0.162 0.170

Capital Work In Progress/Gross Sales 0.020 0.054 0.069 0.121 0.045 0.053 0.046

Inventories/Gross Sales 0.268 0.260 0.264 0.266 0.301 0.264 0.288

Sundry Debtors/Gross Sales 0.281 0.327 0.350 0.276 0.236 0.221 0.202

Cash & Bank Balance/Gross Sales 0.016 0.018 0.010 0.011 0.015 0.013 0.017

Inventories/Current Assets 0.474 0.430 0.423 0.482 0.546 0.529 0.568

Sundry Debtors/Current Assets 0.498 0.540 0.561 0.499 0.427 0.445 0.397

Current Assets/Gross Sales 0.565 0.605 0.624 0.553 0.552 0.498 0.507

Loans & Advances/Gross Sales 0.190 0.264 0.210 0.216 0.179 0.142 0.113

Current Liabilities/Gross Sales 0.175 0.228 0.222 0.207 0.185 0.207 0.168

Provisions/Gross Sales 0.113 0.097 0.075 0.038 0.035 0.035 0.034

Debt/Equity 0.038 0.155 0.216 0.001 0.081 0.002 0.107

Depreciation/Gross Sales 0.028 0.030 0.029 0.029 0.043 0.044 0.040

Secured Loans/Total Debt 0.059 0.029 0.003 0.081 0.033 0.743 0.010

Interest/Debt 0.091 0.051 0.069 0.060 0.092 0.138 0.069

Inventory Turnover 3.737 3.843 3.787 3.753 3.318 3.795 3.468

Receivables 2.120 1.692 1.785 2.033 2.410 2.749 3.175

Payables 5.707 4.394 4.499 4.823 5.408 4.826 5.957

Receivables Turnover Period 172.155 215.658 204.456 179.551 151.466 132.777 114.953

Payables Turnover Period 63.957 83.068 81.130 75.681 67.489 75.625 61.270

Capital WIP/Gross Sales 0.020 0.054 0.069 0.121 0.045 0.053 0.046

Gross Block % Increase 0.223 0.223 0.076 0.464 0.091 0.149

Assumptions for line items have been made based on the average of last 10 years


7/12

FY14 Remarks

0.399

0.022

0.153

0.222

0.246

0.113

0.170

0.044

0.287

0.162

0.017

0.615

0.348

0.466

0.104

0.172

0.034

0.122

0.037

0.286

0.133

3.489

3.760

5.830

97.062

62.612

0.044

0.631


8/12

Mar'15 Mar'16 Mar'17 Mar'18 Mar'19

12 mths 12 mths 12 mths 12 mths 12 mths

Reported Net Profit 2177.42 2605.18 3234.47 4016.18 4986.67

(Add) Depreciation 409.90 450.89 495.98 545.58 600.14

(Sub) Capital Expenditure 867.22 953.94 1049.33 1154.26 1269.69

(Sub) Capital Work in Progress 216.83 129.23 186.10 230.05 284.39

(Sub) Increase in Current Assets, Loans & Advances 2695.69 1658.27 2388.03 2952.07 3649.34

(Add) Increase in Current Liabilities 550.32 447.91 645.02 797.37 985.71

(Add) Net New debt issued 206.88 248.32 309.27 384.99 479.00

Net Cash Flows -435.20 1010.87 1061.30 1407.74 1848.10

Present Values -435.20 899.19 839.74 990.81 1157.03

Terminal Growth Rate 9.50%

Terminal Cash Flow 69297.19

Present Value of Terminal Cash Flow 43384.75

EV 46836.32

Cash 175.16

Total Debt 1228.34

EV + Cash - Total Debt 45783.14

No. of Shares 4483.76

Estimated Share Price 1021.09

------------------- in Rs. Cr. -------------------

Projections


9/12

Risk-Free Rate 8.00%

Beta 0.52

Risk Premium 8.30%

Cost of Equity 12.32%

Cost of Debt 13.28%

Total Debt 1228.34

Total Equity 10099.93

Debt/(D+E) 10.84%

Equity/(D+E) 89.16%

WACC 12.42%


10/12

Current

Cadila 1000.57 28368.31 1645.50 91.60 29922.21 29.91

Cipla 2398.42 53241.71 1228.34 175.16 54294.89 22.64

Divi's Labs 1100.02 23966.65 17.87 35.77 23948.75 21.77

Ranbaxy 1358.75 27266.07 4763.61 2834.77 29194.91 21.49

GSK 1095.52 23147.64 3.61 2027.14 21124.11 19.28Lupin 4174.93 61040.47 139.40 146.28 61033.59 14.62

Dr Reddy 3629.09 54198.48 2664.50 665.10 56197.88 15.49

Aurobindo 2160.61 29228.08 2814.86 9.72 32033.22 14.83

Ipca 816.30 9427.07 430.08 69.49 9787.66 11.99

Torrent 1224.00 15434.80 579.16 277.76 15736.20 12.86

Current Mean Median

Cadila 29922.21 3805.33 7.86

Cipla 54294.89 9151.77 5.93 5.99 5.34 54838.45

Divi's Labs 23948.75 2631.06 9.10

Ranbaxy 29194.91 6051.05 4.82

GSK 21124.11 2505.98 8.43

Lupin 61033.59 9639.03 6.33

Dr Reddy 56197.88 10523.95 5.34

Aurobindo 32033.22 7388.35 4.34

Ipca 9787.66 3155.05 3.10

Torrent 15736.20 3421.33 4.60

Sector Companies EV SalesEV/Sales

Expected EV

Pharma

Pharma

Sector C ompanies EBITDA Market Cap Debt Cash EV


11/12

Mean Median Expected Current

18.02 15.49 43230.81 42177.63 80.29 525.30 658.50

53785.27 669.87

Share PriceEV/EBITDA (x)New EV New Market Cap Shares#

Expected Market Cap Expected Share Price


12/12

EV/EBITDA 18.02EV/Sales 5.99

Expected EV 43230.81

Expected Market Share 42177.63

No. of Shares 80.29

Expected Share Price 525.3

Expected EV 54838.45

Expected Market Share 53785.27

No. of Shares 80.29

Expected Share Price 669.87

Share Price from Multiples 597.59

Share Price from DCF 1021.09

Estimated Share Price 809.34

EBITDA Multiples

Sales Multiples

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