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Check Before You Invest : Mahavir Advanced Remedies Ltd

BSE: 531689 NSE: ISIN: INE716N01016
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Mahavir Advanced Remedies Ltd belong to?
Mahavir Advanced Remedies Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Mahavir Advanced Remedies Ltd a good quality company?
Mahavir Advanced Remedies Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Mahavir Advanced Remedies Ltd undervalued or overvalued?
Mahavir Advanced Remedies Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 660.72 660.72
Price to Book 19.18 19.18
Price to Sales 838.85 838.85
EV to EBITDA 782.7 782.70
Q.4 Is Mahavir Advanced Remedies Ltd a good buy now?
Mahavir Advanced Remedies Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

Q.1 Gross Profit margin of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Gross profit margin which is the profit after deduction of direct costs, is 133.9% for FY-2014, which is above its 5-year median of -9.5%, indicating increasing margins.

Q.2 Operating Profit Margin of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -77.01% for FY-2014, which is below its 5-year median of -9.44% indicating decreasing margins.

Q.3 Net Profit Margin of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Net Profit Margin is 133.89% for FY-2014, is above its 5-year median of -32.79%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 133.9 -9.5
Operating Profit Margin (%) -77.01 -9.44
Net Profit Margin (%) 133.89 -32.79

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Return on Asset is 1.58%, which is above its 5-year historical median of -4.42%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Return on capital employed is 1.58% for FY-2014, which is above its 5-year historical median of -6.24%. The current ROCE is above its estimated weighted average cost of capital (WACC) of %, indicating value creation.

Q.6 Return on Equity (ROE) of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Return on equity is 1.58% for FY-2014, which is above its 5-year historical median of -6.57%, indicating the business is making better use of its shareholders capital.

C: How much debt does the business have and is it at a sustainable level?

Q.7 Debt to Equity ratio of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.14, indicating lower debt levels in the industry.

Q.8 Debt to cash flow from operations of Mahavir Advanced Remedies Ltd?
Mahavir Advanced Remedies Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Mahavir Advanced Remedies Ltd?

Q.1 Promoter shareholding and pledge status of Mahavir Advanced Remedies Ltd?
Promoters hold 0.97% of the Mahavir Advanced Remedies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Mahavir Advanced Remedies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Mahavir Advanced Remedies Ltd vs industry peers?
Mahavir Advanced Remedies Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 5.35%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) - 5.4
Gross Profit Growth (%) 0 14
Operating Profit Growth (%) 0 11.5
Net Profit Growth (%) 0 12
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.01 0.79
ROE (%) 1.58 9.17
ROCE (%) 1.58 11.52
Cash Conversion Cycle (days) 189.05 76

Valuation & price assessment

Q.1 Stock return of Mahavir Advanced Remedies Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Mahavir Advanced Remedies Ltd vs historical?
The current P/E ratio of 660.72 is in line with than its historical median of 660.72, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 660.72 660.72 31.09
Price to Book 19.18 19.18 2.85
Price to Sales 838.85 838.85 2.82
EV to EBITDA 782.7 782.70 15.99

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