RPG Lifesciences –

Q2 FY 25 results and concall highlights –

Revenues – 172 vs 153 cr, up 12 pc

EBITDA – 48 vs 39 cr, up 22 pc ( margins @ 27.8 vs 25.5 pc ) – highest ever EBITDA margins

PAT – 31 vs 26 cr, up 19 pc ( this is adjusted PAT – not accounting for 27 cr of transfer charges as the same is going to be nullified in Q3/Q4 post completion of land sale deal )

Segment wise performance in H1 ( Q1 + Q2 ) –

Domestic formulation sales @ 216 vs 196 cr, up 10 pc YoY
International formulation sales @ 66 vs 56 cr, up 16 pc YoY
API sales @ 52 vs 46 cr, up 14 pc YoY

Domestic MR productivity @ Rs 6 lakh/month

H1 growth driven by 10 pc volume growth ( which is an extremely healthy number considering poor volume growth for IPM )

Company has sold its surplus land holdings located near Navi Mumbai for 144 cr

Actively looking for M&A opportunities in both formulations and API spaces in order to utilise the cash on books ( which post the land deal should rise to above 250 cr )

For domestic formulations business, the breakup of in-house : outsourced manufacturing stands @ 70:30

Currently 35 scientists are working in the company’s R&D center at Navi Mumbai. They intend to add a few more in near future. Currently working on expanding their Immuno-supressants portfolio so as to cement their position in this niche therapy area. Also working on a few molecules in the CNS and Cardio therapy areas. In all – working on 12 molecules

Going fwd – company intends to keep clocking gains on EBITDA margins. Although the gains hereafter should be gradual and not as steep as last 4-5 yrs

Wrt acquisition strategy for APIs – looking for small volumes, high complexity, niche molecules so as to avoid competition from bigger players. In the formulations space, looking to acquire brands in the chronic therapies

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

Yes, sometimes stepping away might seem like the right choice. I’ve tried it in the past, and my experience taught me that rejoining with the same conviction is often challenging. So, if the business has strong long-term prospects, stepping away could mean missing out on significant gains.

Regarding Trent’s results, they are exceptional—among the best in the industry, not just in retail. Other retail players have faced losses this quarter (V2, ABFR), and while DMart also saw a reduction in profit, Star Bazaar reported improved profitability. Emerging categories like beauty & personal care, innerwear, and footwear have continued to gain customer traction and now contribute to over 20% of revenues. Zudio Beauty, in particular, seems highly promising to me. Even in a challenging month like September, Trent delivered an impressive operational profit of ₹643 crore. I believe their consolidation of 25 stores is a strategic step, showing management’s careful and profitable approach to expansion.

Yes, the stock price action has been disappointing, but I remain confident. For me, it’s business as usual. For the past year, I’ve been searching for a third company to add to my concentrated portfolio, but I have yet to find one that convinces me. Currently, my portfolio includes only Trent and Divi’s Laboratories, and I’m still on the lookout for a third.

Disclaimer: I am invested in Trent and have added a few more units recently. This is not a buy/sell recommendation, nor should it be taken as investment advice—these are solely my personal views.