Sun Pharma Inds. Key Ratios

The significant increase in PAT margin from 8.47% in FY2022 to 20.79% in FY2025 reflects stronger profitability, primarily driven by enhanced operational efficiency and cost management.Asset turnover has declined over the period, indicating a decrease in asset usage efficiency, likely due to increased assets necessary for growth without a proportionate increase in sales.Leverage has improved slightly, reducing from 1.39 times to 1.24 times, suggesting a more conservative approach toward financing, positively contributing to the ROE despite the minor dip in the years following FY2023.

Inventory days have increased significantly from 48.68 in FY2022 to 69.81 by FY2025, implying potential overstocking issues or slower turnover, which can strain cash flow.Receivable days are similarly rising, moving from about 53 to 84, indicating customers are taking longer to pay, which might lead to liquidity challenges.Payable days increased notably, pointing towards improved working capital management, allowing more time to meet obligations, but this also raises concerns if it affects supplier relationships.

ROE has shown a substantial increase from 7.21% in FY2022 to around 16% in the subsequent years, predominantly driven by strong PAT margins and improvements in capital efficiency as highlighted by ROCE.ROCE has consistently outperformed ROE during the period, indicating that when factoring in debt, the company is generating even stronger returns, reinforcing effective capital utilization.ROA has also seen continuous improvement, suggesting that overall asset management has progressed positively, contributing to higher efficiency across the business.