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Last Updated on: 11 October, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo

Kwality Pharmaceuticals Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: October 9, 2024, 11:14 pm

Market Cap 776 Cr.
Current Price 748
High / Low865/320
Stock P/E24.1
Book Value 218
Dividend Yield0.00 %
ROCE15.9 %
ROE13.7 %
Face Value 10.0
PEG Ratio3.67

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Kwality Pharmaceuticals Ltd

Competitors of Kwality Pharmaceuticals Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Gujarat Themis Biosyn Ltd 3,723 Cr. 342390/10868.1 18.50.20 %45.0 %33.8 % 1.00
Gujarat Terce Laboratories Ltd 63.1 Cr. 85.092.8/19.643.2 9.580.00 %9.72 %3.44 % 10.0
Gujarat Inject (Kerala) Ltd 27.2 Cr. 18.618.8/7.60160 5.000.00 %4.06 %3.33 % 10.0
Godavari Drugs Ltd 93.3 Cr. 124155/82.114.5 51.80.00 %12.7 %15.5 % 10.0
Glenmark Life Sciences Ltd 14,458 Cr. 1,1781,335/60932.4 1901.91 %28.1 %21.1 % 2.00
Industry Average16,284.95N/A49.57N/AN/A16.6815.56N/A

All Competitor Stocks of Kwality Pharmaceuticals Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales120.19183.7188.1964.0470.2255.9656.0168.8067.4569.6578.10
Expenses72.66100.2963.6547.8152.2040.3940.8457.2853.6454.3861.40
Operating Profit47.5383.4224.5416.2318.0215.5715.1711.5213.8115.2716.70
OPM %39.55%45.41%27.83%25.34%25.66%27.82%27.08%16.74%20.47%21.92%21.38%
Other Income0.960.120.841.600.380.750.35-15.070.400.230.62
Interest0.680.710.501.031.221.181.951.672.192.412.73
Depreciation2.062.653.192.753.133.833.544.424.784.884.81
Profit before tax45.7580.1821.6914.0514.0511.3110.03-9.647.248.219.78
Tax %24.92%25.59%26.74%25.27%24.91%20.07%27.92%23.65%24.72%23.75%21.17%
Net Profit34.3559.6615.8910.5110.559.057.23-7.365.456.267.70
EPS in Rs33.1057.5015.3110.1310.178.726.97-7.095.256.037.42

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales386260527695137165138261456251262
Expenses365856497086125149124231284190206
Operating Profit234469121514291726156
OPM %5%5%6%7%8%9%8%9%10%11%38%24%21%
Other Income10010211424-14-14
Interest1111122233378
Depreciation1111223346111518
Profit before tax12223681111221622616
Tax %39%27%47%29%39%41%38%31%24%29%26%24%
Net Profit111123588151201912
EPS in Rs0.861.660.951.321.893.314.517.288.1214.86115.7018.7611.16
Dividend Payout %0%0%0%0%0%9%0%0%0%0%0%0%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)0.00%0.00%0.00%100.00%50.00%66.67%60.00%0.00%87.50%700.00%-84.17%
Change in YoY Net Profit Growth (%)0.00%0.00%0.00%100.00%-50.00%16.67%-6.67%-60.00%87.50%612.50%-784.17%

Kwality Pharmaceuticals Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.

Growth

Compounded Sales Growth
10 Years:18%
5 Years:13%
3 Years:6%
TTM:29%
Compounded Profit Growth
10 Years:41%
5 Years:31%
3 Years:24%
TTM:5%
Stock Price CAGR
10 Years:%
5 Years:84%
3 Years:-1%
1 Year:129%
Return on Equity
10 Years:30%
5 Years:33%
3 Years:34%
Last Year:14%

Last Updated: Unknown

Balance Sheet

Last Updated: September 15, 2024, 3:18 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital4445510101010101010
Reserves81315182121283752172192216
Borrowings668131926283541549098
Other Liabilities1112101727414053651067174
Total Liabilities293538527298107135169343364398
Fixed Assets10111111161928425691120138
CWIP-0-0-0-0-0-0-0-031214-0
Investments134579889444
Other Assets1821233650707186102236226256
Total Assets293538527298107135169343364398

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 8-01-34-012626594243
Cash from Investing Activity -1-4-1-2-7-6-11-17-23-63-48-26
Cash from Financing Activity -531555-212161-17
Net Cash Flow2-2001-1-1142-5-0

Free Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow2.00-3.00-2.00-4.00-7.00-10.00-14.00-13.00-21.00-12.00118.00-29.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days42416395879986805357107138
Inventory Days33586154725434943897310187
Days Payable31584061677952965863117106
Cash Conversion Cycle44418589927468783391300219
Working Capital Days35608187797662994889212196
ROCE %14%12%11%15%19%19%21%18%26%97%18%16%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Promoters54.24%54.24%54.43%54.45%54.44%54.44%54.73%54.73%54.76%54.76%54.82%54.82%
DIIs0.00%0.00%0.00%0.00%0.00%0.01%0.01%0.01%0.01%0.01%0.00%0.00%
Public45.76%45.76%45.57%45.55%45.56%45.54%45.25%45.25%45.22%45.22%45.17%45.18%
No. of Shareholders1683795811,0494,1985,3766,2116,9436,2915,7865,6955,273

Shareholding Pattern Chart

No. of Shareholders

This stock is not held by any mutual fund

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue10.0010.0010.0010.0010.00
Basic EPS (Rs.)22.7618.16115.6414.608.02
Diluted EPS (Rs.)22.7618.16115.6414.608.02
Cash EPS (Rs.)41.6133.00125.8920.6112.18
Book Value[Excl.RevalReserv]/Share (Rs.)214.51191.08172.5056.9142.56
Book Value[Incl.RevalReserv]/Share (Rs.)214.51191.85173.2757.6843.33
Revenue From Operations / Share (Rs.)296.03241.93439.64252.51134.25
PBDIT / Share (Rs.)65.6760.79168.8229.3317.20
PBIT / Share (Rs.)46.8246.38158.5223.0712.93
PBT / Share (Rs.)29.9724.65155.7120.5010.52
Net Profit / Share (Rs.)22.7618.58115.5914.357.91
NP After MI And SOA / Share (Rs.)22.9318.67115.6414.608.02
PBDIT Margin (%)22.1825.1238.3911.6112.81
PBIT Margin (%)15.8119.1636.059.139.63
PBT Margin (%)10.1210.1835.418.117.83
Net Profit Margin (%)7.687.6826.295.685.89
NP After MI And SOA Margin (%)7.747.7126.305.785.97
Return on Networth / Equity (%)10.619.6966.5325.0918.39
Return on Capital Employeed (%)20.0421.1378.2127.2120.65
Return On Assets (%)6.035.4735.239.106.26
Long Term Debt / Equity (X)0.080.130.110.300.22
Total Debt / Equity (X)0.430.450.240.570.69
Asset Turnover Ratio (%)0.820.721.791.731.16
Current Ratio (X)1.601.651.751.351.31
Quick Ratio (X)1.080.951.341.130.98
Inventory Turnover Ratio (X)1.871.625.648.315.46
Interest Coverage Ratio (X)6.5610.4860.0511.397.14
Interest Coverage Ratio (Post Tax) (X)3.966.9542.116.574.28
Enterprise Value (Cr.)515.35400.57630.8185.7255.35
EV / Net Operating Revenue (X)1.681.601.380.320.39
EV / EBITDA (X)7.566.353.602.823.10
MarketCap / Net Operating Revenue (X)1.381.271.320.220.19
Price / BV (X)1.891.603.340.960.58
Price / Net Operating Revenue (X)1.381.271.320.220.19
EarningsYield0.050.060.190.260.31

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Kwality Pharmaceuticals Ltd as of October 11, 2024 is: ₹734.17

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of October 11, 2024, Kwality Pharmaceuticals Ltd is Overvalued by 1.85% compared to the current share price ₹748.00

Intrinsic Value of Kwality Pharmaceuticals Ltd as of October 11, 2024 is: ₹782.38

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of October 11, 2024, Kwality Pharmaceuticals Ltd is Undervalued by 4.60% compared to the current share price ₹748.00

Last 5 Year EPS CAGR: 6.57%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 23.83%, which is a positive sign.
  2. The company has higher reserves (66.08 cr) compared to borrowings (35.33 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (157.92 cr) and profit (20.92 cr) over the years.
  1. The stock has a high average Working Capital Days of 93.67, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 101.17, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Kwality Pharmaceuticals Ltd:
    1. Net Profit Margin: 7.68%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 20.04% (Industry Average ROCE: 16.68%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 10.61% (Industry Average ROE: 15.56%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 3.96
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 1.08
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 24.1 (Industry average Stock P/E: 49.57)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.43
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Kwality Pharmaceuticals Ltd. is a Public Limited Listed company incorporated on 04/05/1983 and has its registered office in the State of Punjab, India. Company’s Corporate Identification Number(CIN) is L24232PB1983PLC005426 and registration number is 005426. Currently Company is involved in the business activities of Manufacture of pharmaceuticals, medicinal chemical and botanical products. Company’s Total Operating Revenue is Rs. 456.13 Cr. and Equity Capital is Rs. 10.38 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
PharmaceuticalsVillage Nagkalan, Amritsar Punjab 143601cs@kwalitypharma.com
http://www.kwalitypharma.com
Management
NamePosition Held
Mr. Ramesh AroraManaging Director
Mrs. Anju AroraWhole Time Director
Mrs. Geeta AroraWhole Time Director
Mr. Kiran Kumar VermaIndependent Director
Mr. Pankaj TakkarIndependent Director
Mr. Ravi Shanker SinghIndependent Director
Mr. Kartik KapurIndependent Director
Mr. Prashanth VellankiIndependent Director
Mr. Aditya AroraWholeTime Director & CFO
Mr. Ajay Kumar AroraWhole Time Director

FAQ

What is the latest fair value of Kwality Pharmaceuticals Ltd?

The latest fair value of Kwality Pharmaceuticals Ltd is ₹734.17.

What is the Market Cap of Kwality Pharmaceuticals Ltd?

The Market Cap of Kwality Pharmaceuticals Ltd is 776 Cr..

What is the current Stock Price of Kwality Pharmaceuticals Ltd as on 11 October 2024?

The current stock price of Kwality Pharmaceuticals Ltd as on 11 October 2024 is ₹748.

What is the High / Low of Kwality Pharmaceuticals Ltd stocks in FY 2024?

In FY 2024, the High / Low of Kwality Pharmaceuticals Ltd stocks is 865/320.

What is the Stock P/E of Kwality Pharmaceuticals Ltd?

The Stock P/E of Kwality Pharmaceuticals Ltd is 24.1.

What is the Book Value of Kwality Pharmaceuticals Ltd?

The Book Value of Kwality Pharmaceuticals Ltd is 218.

What is the Dividend Yield of Kwality Pharmaceuticals Ltd?

The Dividend Yield of Kwality Pharmaceuticals Ltd is 0.00 %.

What is the ROCE of Kwality Pharmaceuticals Ltd?

The ROCE of Kwality Pharmaceuticals Ltd is 15.9 %.

What is the ROE of Kwality Pharmaceuticals Ltd?

The ROE of Kwality Pharmaceuticals Ltd is 13.7 %.

What is the Face Value of Kwality Pharmaceuticals Ltd?

The Face Value of Kwality Pharmaceuticals Ltd is 10.0.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Kwality Pharmaceuticals Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE