Q3 FY 24 Con-call
- Consolidated revenue saw a modest 2% increase, reaching Rs. 448 crores.
- EBIT also experienced a healthy 10% growth, reaching Rs. 78 crores compared to the previous quarter’s EBITDA of Rs. 71 crores.
- Consolidated PAT stood at Rs. 53 crores, slightly higher than the previous quarter.
- The consolidated EPS for the quarter was an impressive Rs. 5.82 per share.
- An interim dividend of Rs. 2 per share has been approved by the board.
Current Operational Performance:
- The company operates in three key areas within the pharmaceutical industry: API and intermediates, CDMO, CMO, and Xanthine and intermediates.
- The regulated market accounted for 53% of sales in the API and intermediates segment.
- Strong scale-up and commercial manufacturing expertise in the CDMO, CMO business have contributed to a revenue share of 14.2% in Q3.
- The company added one new customer, three new commercial products, and six new R&D products in the CDMO, CMO segment.
- The Xanthine segment experienced a commendable 20% growth over the last year.
Future Outlook:
- The company anticipates approximately 8-10% EBITDA growth in FY24 and remains on track to achieve its long-term goal of 17% annual growth in the next 2-3 years.
- Plans are in place to strengthen the company’s leading position in the Xanthine segment and to enhance the API CDMO segment by introducing more value-added products and acquiring new customers.
Concerns:
- Pricing pressure in the Xanthine segment is anticipated to continue until the middle of the next year.
- The company has seen a decrease in absolute growth due to the postponement of certain projects, resulting in sales being moved to the next financial year.
Other Points:
- CapEx for the next 2 years will be funded through a mix of internal accruals and borrowings.
- The company aims to maintain a debt-equity ratio between 0.3 and 0.35.
In conclusion, the company’s strong financial performance in Q3 FY24, with record EBITDA and net profit, is a positive indicator of its future growth potential. The focus on expanding the CDMO, CMO business, and strengthening its position in the Xanthine segment bodes well for future prospects. However, the company should be mindful of pricing pressure in the Xanthine segment and the impact of project postponements on future sales. The strategic approach to funding CapEx through a mix of internal accruals and borrowings reflects prudent financial management.
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