Revenue and Operating Income Trends
Pfizer demonstrated consistent growth in net sales, rising from ₹676.69 crores in 2007 to ₹772.27 crores by November 2009. This upward trend was complemented by a gradual increase in other operating income, which reached ₹24.37 crores in 2009, up from negligible amounts in earlier years. Consequently, total operating income expanded from ₹676.69 crores in 2007 to ₹796.64 crores in 2009, reflecting the company's ability to enhance its top-line performance despite a challenging pharmaceutical market environment.
Raw material costs and manufacturing expenses also increased in line with revenue growth, with raw material costs rising from ₹139.71 crores in 2007 to ₹198.67 crores in 2009, and manufacturing expenses climbing from ₹205.71 crores to ₹226.89 crores over the same period. Employee costs saw a moderate increase, signalling investment in human capital to support operational expansion.
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Profitability and Margins
Operating profit before depreciation and interest (PBDIT) excluding other income improved from ₹135.22 crores in 2007 to ₹158.17 crores in 2009, indicating enhanced operational efficiency. However, the inclusion of other income, which was significantly higher in 2007 at ₹343.07 crores compared to ₹71.05 crores in 2009, caused fluctuations in overall operating profit figures. Operating profit (PBDIT) thus declined from ₹478.29 crores in 2007 to ₹229.22 crores in 2009.
Profit before tax (PBT) followed a similar pattern, decreasing from ₹451.34 crores in 2007 to ₹210.01 crores in 2009, while profit after tax (PAT) dropped from ₹340.00 crores to ₹137.12 crores over the same timeframe. This decline was partly influenced by exceptional items, which swung from a negative ₹17.35 crores in 2007 to a negative ₹10.92 crores in 2009, with a notable positive spike in 2008.
Margins reflected these trends, with operating profit margin excluding other income hovering around 20% in 2007 and 2009, while gross profit margin experienced a sharp contraction from over 68% in 2007 to 27.4% in 2009. PAT margin similarly declined from 50.24% in 2007 to 17.21% in 2009, signalling pressure on net profitability.
Cash Flow and Financial Position
Cash flow from operating activities showed marked improvement, rising from ₹16.63 crores in 2007 to ₹237.76 crores in 2008, reflecting stronger cash generation capabilities. Investing activities fluctuated, with a positive inflow of ₹232.34 crores in 2007 turning into an outflow of ₹78.87 crores in 2008, indicative of changing capital expenditure or investment strategies. Financing activities consistently recorded outflows, increasing from ₹75.89 crores in 2007 to ₹95.19 crores in 2008, possibly due to debt repayments or dividend distributions.
Net cash inflow decreased from ₹173.08 crores in 2007 to ₹63.69 crores in 2008, while closing cash and cash equivalents rose from ₹479.91 crores to ₹543.60 crores, underscoring Pfizer's solid liquidity position despite reduced net inflows.
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Equity and Reserves
Pfizer maintained a stable equity capital base of ₹29.84 crores throughout the period, with reserves increasing steadily from ₹619.88 crores in 2007 to ₹964.72 crores in 2009. This growth in reserves reflects retained earnings accumulation despite the fluctuations in net profit, supporting the company’s financial resilience and capacity for future investments.
Earnings per share (EPS) mirrored the profit trends, declining from ₹113.94 in 2007 to ₹45.95 in 2009, signalling reduced earnings available to shareholders. Public shareholding also decreased from nearly 59% in 2007 to 29.25% in 2009, which may have implications for market liquidity and investor interest.
Summary
Overall, Pfizer's historical performance from 2007 to 2009 illustrates a company experiencing revenue growth alongside pressures on profitability and margins. While operational efficiencies improved modestly, the decline in other income and exceptional items impacted net profits. Cash flow generation strengthened, and the company maintained a robust liquidity position. Investors should weigh these factors carefully, considering both the growth in sales and the challenges in sustaining profit margins when evaluating Pfizer's financial trajectory.
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