STAKEHOLDERS EMPOWERMENT SERVICES KREBS … · 1.75 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov...

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: PHARMACEUTICALS REPORTING DATE: 25TH NOVEMBER, 2017

KREBS BIOCHEMICALS & INDUSTRIES LTD.

www.krebsbiochem.com

Krebs Biochemicals & Industries Ltd. NSE Code - KREBSBIO TABLE 1 - MARKET DATA (STANDALONE) (AS ON 24TH NOVEMBER, 2017)

Sector - Pharmaceuticals NSE Market Price (`) 107.20 NSE Market Cap. (₹ Cr.) 151.94

Face Value (`) 10.00 Equity (` Cr.) 13.74

Business Group - Indian Private 52 week High/Low (₹) 120.75/73.50 Net worth (₹ Cr.)* -9.75

Year of Incorporation - 1991 TTM P/E (TTM) N.A. Traded Volume (Shares) 10,293

TTM P/BV N.A. Traded Volume (lacs) 11.03

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. - Not Applicable, * As on 30th Sept 2017

Kothapalli Village, COMPANY BACKGROUND

Kasimkota Mandal, Anakapalli, Krebs Biochemicals & Industries Ltd, (Formerly Krebs Biochemicals Ltd), promoted by Mr.

R. T. Ravi in 1991 is engaged in the manufacture of Active Pharmaceutical

Ingredients(API) through Fermentation process.

Krebs Biochemicals & Industries Limited develops biotechnology processes for application

in medicine, agriculture and industry. The Company undertakes both contract

manufacturing for pharmaceutical and multinational companies, and develops products

for sale in global markets. The Company manufactures various products, such as

Androstenedione for use as Steroid Intermediate, and Lovastatin and Simvastatin for anti-

cholesterol. The Company's products in either pilot or research and development stages

include Amlodipine, Cetirizine, Orlistat, Serratiopepetidase, Telmisartan and

Phenylephrine. The Company's manufacturing plants, which are located in Nellore and

Vizag, are equipped for chemical synthesis, fermentation and enzymatic technologies.

The Unit I located at Nellore is a 60-acre site with an effluent treatment plant. The Unit II

located at Vizag is a 48-acre site and has a 3.1-megawatt cogeneration power plant.

Visakapatnam,

Andhra Pradesh - 531031

Company Website:


Revenue and Profit Performance

The revenue of the Company increased from ₹ 0.39 crores to ₹ 3

crores from quarter ending Sep’16 to quarter ending Sep’17. The

Company made a loss of ₹4.86 crores in quarter ending Sep’17 vis-a-

vis making a loss of ₹4.16 crores in quarter ending Sep’16.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Krebs Biochemicals &

Industries Ltd -6.02% 15.57% 9.17% 34.33%

Nifty 0.44% 5.71% 8.17% 26.81%

NIFTY Pharma -0.68% 5.33% 6.93% -15.88%

Source - Capitaline/NSE

0.50

0.75

1.00

1.25

1.50

1.75

Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17

Krebs Biochemicals & Industries Ltd

NIFTY

NIFTY PHARMA

3.00 2.270.39

-4.86 -3.65 -4.16

-10

-5

0

5

Sep'17 Mar'17 Sep'16

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.krebsbiochem.com/



2 | P A G E




TABLE 3 - FINANCIALS

(₹ Cr.) Sep’17 Mar’17 Sep’16 % Change

Sep ’17 vs Mar’17 Mar’17 vs Sep’16

Net Worth -9.75 1.47 5.13 -763.27% -71.35%

Current Assets 14.44 13.19 10.67 9.48% 23.62%

Non-Current Assets 108.94 108.89 107.34 0.05% 1.44%

Total Assets 123.38 122.08 118.01 1.06% 3.45%

Investments 0.00 0.00 0.00 N.A. N.A.

Finance Cost 1.24 1.41 0.70 -12.06% 101.43%

Long Term Liabilities 97.48 88.88 83.54 9.68% 6.39%

Current Liabilities 35.65 31.72 29.34 12.39% 8.11%

Turnover 2.61 1.88 0.00 38.83% N.A.

Profit After Tax (PAT) -4.86 -3.65 -4.16 N.A. N.A.

EPS (₹) -3.70 0.62 -3.03 -696.77% N.A.

Source - Money Control/ Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Statutory Auditors in their Report have made qualification for FY 2014-15 and FY 2015-

16. No Audit qualifications was made for FY 2016-17.

Basis for Qualified Opinion for FY 2015-16:

“Reference is invited to Note 14 of the financial statements, The Company's Non-Current Assets consist of Long Term Trade

Receivables of Rs. 21.74 crores and Other Loans and advances of Rs 1.78 crores. We are unable to ascertain whether such

balances as at balance sheet date are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise

in case any of these receivables are subsequently determined to be doubtful of recovery. Had the Company made a provision for

the same, the loss of the period would have been higher by the said amount.”

Qualified Opinion for FY 2015-16:

“In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of

the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the

Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in

India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;

b) In the case of the Statement of Profit and Loss, of the loss for the year ending 31st March, 2016;

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.”

Similar Audit Qualifications relating to trade receivables, were made by Auditors for FY 2014-15.

Response Comment

Frequency of Qualifications For FY 2014-15 & FY 2015-16 related to Trade Receivables.

Have the auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? N.A. No Subsidiary / Associate / Joint Venture

Do the financial statements include material unaudited financial

statements? N.A. No Subsidiary / Associate / Joint Venture




3 | P A G E




TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT - FY 2016-17)

Regulatory Norms Company

% of Independent Directors on the Board 50% 50%

% of Promoter Directors on the Board - 25%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Non - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - No

Average attendance of Directors in the Board meetings (%) - 90%

Composition of Board: As per Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 "Listing Regulations, 2015", the Company should have at least 50% Independent Directors as the Chairman of the Board is

a Promoter Non - Executive Director. The Company has 50% of Independent Directors and hence, it meets the regulatory

requirements.

Board Diversity: The Company has 8 directors out of which 7 are male and 1 is female.

TABLE 5 - FINANCIAL RATIOS

Ratios Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Turn

ove

r

Rat

ios

Inventory Turnover

0.39 0.34 N.A. 13.10% N.A.

Debtors Turnover

1.85 1.18 N.A. 56.55% N.A.

Fixed asset Turnover

0.02 0.02 N.A. 38.77% N.A.

Current Asset Turnover

0.18 0.14 N.A. 26.81% N.A.

Ret

urn

Rat

ios Operating Profit Margin -99.62% -40.43% N.A. N.A. N.A.

Net Profit Margin -186.21% -194.15% N.A. N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio

0.41 0.42 0.36 -2.59% 14.34%

Quick Ratio

0.22 0.24 0.17 -10.91% 45.81%

Cash Ratio

0.18 0.19 0.16 -8.27% 17.78%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. 29.11 15.48 N.A. 88.02%

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales

47.63 65.80 N.A. -27.61% N.A.

Market Cap/ Net Worth N.A. 84.15 85.91 N.A. -2.05%

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Source - Money Control/Stock exchange filing




4 | P A G E




TABLE 6 - TRADING VOLUME

Particulars Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Trading Volume (shares) (avg. of 1 qtr) 1,316 529 N.A. 148.90% N.A.

Trading Volume (shares) (high in 1 qtr) 10,880 2,503 N.A. 334.68% N.A.

Trading Volume (shares) (low in 1 qtr) 5 2 N.A. 150.00% N.A.

Ratio - High/low trading volume 2,176.00 1,251.50 N.A. 73.87% N.A.

Ratio - High/average trading volume 8.27 4.73 N.A. 74.64% N.A.

Source - Capitaline

TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Sep-17 Mar-17 Sep-16 Comments

Shar

eho

ldin

g (%

)

Promoter shareholding 59.77 59.77 59.77 • No new equity shares were issued during the

period from 1st Oct, 2016 to 30th Sep, 2017.

• There was no change in the promoter

shareholding during the said period.

• No major change was observed in the

shareholding pattern during the said period.

• The promoters have pledged or encumbered

4.87% of their shareholding.

Public - Institutional shareholding 0.01 0.01 0.01

Public - Others shareholding 40.22 40.22 40.22

Non-Promoter Non-Public Shareholding 0.00 0.00 0.00

Source - NSE

MAJOR SHAREHOLDERS (AS ON 30TH SEPTEMBER 2017)

S. No. Promoters Shareholding S. No. Public Shareholders Shareholding

1 IPCA Laboratories Limited 29.83% 1 Sun Pharmaceutical Industries Limited 7.64%

2 Hemalata Ravi 16.18% 2 Pinky Ventures Private Limited 4.36%

3 Avinash Ravi 12.87% 3 K Satish 1.56%

4 Ajay Ravi 0.68% 4 Shaaji Palliyath 1.46%

5 R T Ravi 0.14% 5 Edelweiss Asset Reconstruction Co. Ltd. 1.09%

Source - NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares in FY 2016-17

Preferential issue to promoters No preferential issue of shares was made to the promoters in FY 2016-17

Preferential issue to others No preferential issue of shares was made to other shareholders during FY 2016-17

GDRs issued by the Company The Company did not issue any GDRs during FY 2016-17

Issue of ESOPs/ Issue of shares other than

Preferential allotment The Company does not have any ESOP Scheme.

Source - Annual Report FY 2016-17

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Lovastatin Nil

2 Simvastatin 100%

Source - Annual Report FY 2016-17




5 | P A G E




Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




6 | P A G E




Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



7 | P A G E




𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




8 | P A G E




DISCLAIMER

Sources Company Information

Only publicly available data has been used while making the factsheet. Our data sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol, Businessweek, Reuters, Annual Reports, IPO Documents and Company Website.

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Contact Information

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A 202, Muktangan, Upper Govind Nagar,

Malad East, Mumbai – 400 097

Tel +91 22 4022 0322

[email protected]

[email protected]

www.sesgovernance.com

Research Analyst: Mukesh Solanki


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/

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