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Novartis Key Financial Ratios

NSE:NOVARTIND | PHARMACEUTICALS

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Profitability Margins

2-year trend showing gross, operating, and net profit margins

FY 2024 - FY 2025

Novartis's net profit margin of 28.3% in FY2025 reflects excellent profitability, with operating margin at 27.2% and gross margin at 45.2%.

Understanding Profitability Margins

In FY 2025, Novartis posted a gross margin of 45.2%, an operating margin of 27.2%, a net margin of 28.3%. Gross Margin = (Revenue - COGS) / Revenue; Operating Margin = EBIT / Revenue; Net Margin = Net Income / Revenue. Typical healthy ranges: Gross 20-40%, Operating 10-20%, Net 5-10%+. Consistent or improving margins indicate strong competitive positioning.

Company Performance

2-year trend showing revenue, gross profit, and net profit

FY 2024 - FY 2025

Novartis's revenue grew 6.3% to 3.56B and net profit grew 18.4% to 1.01B YoY in FY2025, indicating moderate business momentum.

Understanding Company Performance

In FY 2025, Novartis's revenue grew by 6.3% year-over-year. Revenue is total income from operations. Gross Profit is revenue minus cost of goods. Net Profit is the bottom line after all expenses. Consistent growth across all three signals a healthy, expanding business.

Return on Equity (ROE)

2-year trend showing shareholder returns

FY 2024 - FY 2025

Novartis's ROE of 12.9% in FY2025 indicates moderate shareholder returns.

Understanding Return on Equity (ROE)

In FY 2025, Novartis reported an ROE of 12.9%. ROE = (Net Income / Shareholders' Equity) x 100. Measures how efficiently the company turns equity into profit. Above 15% is generally strong; above 25% is excellent. Very high ROE may signal high leverage — check alongside debt levels.

Net Income vs Free Cash Flow

2-year trend comparing profitability with cash generation

FY 2024 - FY 2025

Novartis's FCF/NI ratio of 0.74x in FY2025 indicates reasonable cash generation relative to profits.

Understanding Net Income vs Free Cash Flow

In FY 2025, Novartis's free cash flow trailed net income. Free Cash Flow = Operating Cash Flow - Capital Expenditure. When FCF exceeds net income, it suggests high-quality, cash-backed earnings. Persistent gaps may indicate aggressive accounting or heavy capex needs.

Net Income vs Operating Cash Flow

2-year trend comparing profitability with cash from operations

FY 2024 - FY 2025

Novartis's OCF/NI ratio of 0.74x in FY2025 indicates reasonable cash conversion from operations.

Understanding Net Income vs Operating Cash Flow

In FY 2025, Novartis's operating cash flow trailed net income. Operating Cash Flow is the actual cash from core operations. OCF exceeding net income signals strong cash collection. OCF trailing net income may indicate aggressive revenue recognition or working capital issues.

Leverage Ratios

Measure a company's financial leverage, liquidity, and ability to meet financial obligations.

Current Ratio Analysis

2-year trend showing short-term liquidity position

FY 2024 - FY 2025

Novartis's current ratio of 5.25x in FY2025 indicates excessively high liquidity that may signal inefficient asset management.

Understanding Current Ratio

In FY 2025, Novartis reported a current ratio of 5.25. Current Ratio = Current Assets / Current Liabilities. Measures short-term liquidity. A ratio of 1.5-3.0 is generally healthy; below 1.0 signals liquidity risk; above 3.0 may indicate underutilized assets.

Interest Coverage Ratio Analysis

2-year trend showing ability to service debt

FY 2024 - FY 2025

Novartis's interest coverage ratio of 125.6x in FY2025 indicates comfortable debt servicing capacity.

Understanding Interest Coverage Ratio

In FY 2025, Novartis reported an interest coverage ratio of 125.6x. Interest Coverage = EBIT / Interest Expense. Shows how many times operating profit covers interest payments. Above 5x is comfortable; below 1.5x signals potential difficulty servicing debt.

Debt-to-Equity Ratio Analysis

2-year trend showing financial leverage and capital structure

FY 2024 - FY 2025

Novartis's debt-to-equity ratio of 0.01x in FY2025 reflects a conservative, low-leverage capital structure.

Understanding Debt-to-Equity Ratio

In FY 2025, Novartis reported a debt-to-equity ratio of 0.01. Debt-to-Equity = Total Debt / Total Equity. Below 1.0 is conservative; 1.0-2.0 is moderate; above 2.0 indicates higher financial risk. Capital-intensive industries naturally carry higher ratios.

Total Debt Analysis

2-year trend showing total debt with year-over-year changes

FY 2024 - FY 2025

Novartis's debt decreased 27.4% YoY in FY2025 — positive deleveraging improves financial flexibility.

Understanding Total Debt

In FY 2025, Novartis's total debt decreased by 27.4% year-over-year. Total Debt includes short-term debt, long-term loans, debentures, and capital leases. YoY changes (shown as percentages) reveal whether the company is leveraging up or deleveraging.

Shares Outstanding

Year-over-year change in diluted shares outstanding

Novartis's diluted shares remained virtually unchanged in FY2025.

Over 2 years (FY2024–FY2025), diluted shares remained essentially unchanged at 24.69M.

Understanding Shares Outstanding

In FY 2025, Novartis's diluted shares remained flat by 0.0% year-over-year. Diluted Shares accounts for stock options, warrants, and convertibles. Positive YoY change means dilution (red); negative means buybacks (green). Consistent dilution above 5% annually is a red flag.

Data from audited consolidated filings. For educational purposes only — not investment advice. Last update: FY 2025