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Alkem Lab: Ratio Analysis and Interpretations

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Alkem Laboratories is a multinational pharmaceutical company headquartered in Mumbai, India that manufactures and sells generics and formulations. It has 16 manufacturing facilities, including 14 in India and 2 in the US acquired in 2012-2013. In 2014 and 2015, Alkem acquired additional brands and facilities. While some of its profit ratios have decreased recently, its debt ratio remains low, indicating lower risk.

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Alkem Lab: Ratio Analysis and Interpretations

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Albin Biju
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Alkem Laboratories is a multinational pharmaceutical company headquartered in Mumbai, India that manufactures and sells generics and formulations. It has 16 manufacturing facilities, including 14 in India and 2 in the US acquired in 2012-2013. In 2014 and 2015, Alkem acquired additional brands and facilities. While some of its profit ratios have decreased recently, its debt ratio remains low, indicating lower risk.

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Alkem Laboratories is a multinational pharmaceutical company headquartered in Mumbai, India that manufactures and sells generics and formulations. It has 16 manufacturing facilities, including 14 in India and 2 in the US acquired in 2012-2013. In 2014 and 2015, Alkem acquired additional brands and facilities. While some of its profit ratios have decreased recently, its debt ratio remains low, indicating lower risk.

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48 views3 pages

Alkem Lab: Ratio Analysis and Interpretations

Uploaded by

Albin Biju
Alkem Laboratories is a multinational pharmaceutical company headquartered in Mumbai, India that manufactures and sells generics and formulations. It has 16 manufacturing facilities, including 14 in India and 2 in the US acquired in 2012-2013. In 2014 and 2015, Alkem acquired additional brands and facilities. While some of its profit ratios have decreased recently, its debt ratio remains low, indicating lower risk.

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ALKEM LAB

Alkem Laboratories is a multinational pharmaceutical company


headquartered in Mumbai, Maharashtra that manufactures and sells
pharmaceutical generics, formulations and neutraceutricals in India.
Alkem has 16 manufacturing facilities: 14 in India and 2 in the US. These 2
facilities in the US were acquired in 2012 and 2013 respectively . In 2014 acquired
the "Clindac-A" brand in India from Galderma S.A. In 2015 again Alkem acquired
a formulation manufacturing facility in the US.
Alkem set up its research and development facility for ANDA development
at Taloja in 2003. In 2006 anti-infective drug Taxim of Alkem became the first
anti-infective drug in the Indian pharmaceutical industry to cross 1,000 million in
terms of domestic sales in India. In 2014 Clavam other drug from Alkem crossed
2,000 millions mark in terms of domestic sales in India. In 2007 the company filed
its first ANDA for drug Amlodipine which was approved in 2009. Alkem has
developed a portfolio of 705 branded generic drugs, with 13 of the brands featured
among the top 300 brands in India for the fiscal year 2015 and a portfolio of 705
brands in India in the six months ended 30 September 2015.

RATIO ANALYSIS AND INTERPRETATIONS


a) Gross profit ratio is somewhat stable for the company , but yet it reduced to
60.85 from 61.54 , not a good sign for business
b) Operating profit ratio initially increased from 2016 -17 but again decreased in
2018
c)After paying of the tax expenses and all, the company had very less net profit
comparing to the previous years
d) Company's earning per share also decreased from 2017-18 which shows
companies incapability to acquire enough profits for the shareholders
e) Payable turnover ratio also decreased which means unsatisfied suppliers
f) Companies net working capital is less than 1.2 indicating company lack enough
current assets to meet its current liabilities
g) Companies debt ratio is less than 0.4 indicating lower debt financing which
means lesser risk
h) Dividend yield ratio is stable throughout the years indicating stable and same
dividend for shareholders
PPT POINTS

Alkem Laboratories is a multinational pharmaceutical company headquartered


in Mumbai, Maharashtra that manufactures and sells pharmaceutical generics,
formulations and neutraceutricals in India .
On December 23, 2015, we successfully completed our Initial Public Offering
(IPO) with our equity shares being listed on the Bombay Stock Exchange Limited
and the National Stock Exchange of India Limited.

No. of
Category shares Percentage
Promoters 78,821,023 65.92
General Public 30,057,942 25.14
NBFC and Mutual
Funds 3,822,554 3.20
Foreign Institutions 3,120,942 2.61
Others 2,982,304 2.49
Financial Institutions 620,491 0.52
Central Government 139,744 0.12

RATIO ANALYSIS AND INTERPRETATIONS


a) Gross profit ratio is somewhat stable for the company , but yet it reduced to
60.85 from 61.54 , not a good sign for business
b) Operating profit ratio initially increased from 2016 -17 but again decreased in
2018
c)After paying of the tax expenses and all, the company had very less net profit
comparing to the previous years
d) Company's earning per share also decreased from 2017-18 which shows
companies incapability to acquire enough profits for the shareholders
e) Payable turnover ratio also decreased which means unsatisfied suppliers
f) Companies net working capital is less than 1.2 indicating company lack enough
current assets to meet its current liabilities
g) Companies debt ratio is less than 0.4 indicating lower debt financing which
means lesser risk
h) Dividend yield ratio is stable throughout the years indicating stable and same
dividend for shareholders

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