Gross operating revenue stood at 1566 crores rising tepid 2% YOY from 1534 crores & showing a substantial growth of 40% QOQ because of strong growth in domestic formulations & institutional exports with a decline of around 19% in API business YOY
Expenses stood at 1149 crores rising 21% YOY from 886 crores & rising 30% QOQ
EBITDA stood at 438 crores declining YOY 27% from 600 crores but rising 76% QOQ.
EBITDA margin stood at 28% declining 11% YOY due to higher material costs & higher sale of lower margin products but rising 6% QOQ
Finance Cost stood at 1.8 crores declining 33% from 2.7 crores
Depreciation stood at 56 crores rising 10% from 51 crores YOY & 7% QOQ
PAT stood at 307 crores rising declining 31% YOY but rising 91% QOQ
PAT margin stood at 20% declining 9% YOY but rising 6% QOQ due to higher finance cost, employee expenses & other expenses
Business Highlights
Domestic formulations grew 25% YoY, while Q1FY21 also included | 54 crore of domestic HCQ(Hydroxichloroquine) business
Gross margins were affected by product mix sold in Q1FY22 (antibacterial, cough & cold and anti-malarial have low margins) and higher material cost
Price hiked by 6% this year against an average of 4% every year
Field force has returned post lockdown, which has increased promotional activities
Management guided for 16-18% growth in domestic business for FY22
Branded exports were mixed with CIS(Commonwealth of Independent States) market impacted by currency movement, Myanmar market disturbed while South African business performing well. Management guided for 12% growth in FY22
Generics was affected as Paracetamol prices have increased and buying levels are low. Management guided for 8-10% growth in FY22
UK business grew at 15% YoY with the company starting to market in its own brand name. The management guided for 10-12% growth in the next three to four years, while Europe is expected grow faster
US traction will take longer than earlier estimated due to USFDA import alerts for the Ratlam facility that is the only API source for Silvassa and Pithampur formulations plants along with Silvassa and Pithampur (Indore) plants that are specifically earmarked for the US business, besides third-party sales. However, sustained traction from branded and generics exports sales with a revival in EU is expected to mitigate the US void as per the management
Capex in API facilities got delayed due to Covid. Devas is expected to be operational in FY23 while Ratlam facility will be operational by Q3FY22. API capacity will increase by 20% post completion of both projects.
Management guided for 10% growth in API business foe FY22
EBITDA margins guidance was 25% for FY22 and management expects trend to get better
Capex – Rs 400 crore for next two to three years
Company plans to exhaust MAT credit in next 2 years (FY22 & FY23: 17%-18%) and post that lower tax regime with tax rate of 25%.
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