Q3FY24-
The company expects to get back to historical 20-22% EBITDA run rate by the end of the next financial year, with Q3 being a one-off situation(Pondicherry plant fire incident) and a strong Q4 with INR400 crores of revenues anticipated.
The company is aggressively looking at improving gross margins and EBITDA per KL, network optimization, andOPEX reduction to get back to historical levels, aiming for 20% to 22% EBITDA margin by Q4 2025 with the reset strategy in place
The focus is on balance sheet improvement, and a rights issue has been announced to reduce debt, aiming to double EBITDA from Q4 FY ’24 to the exit run rate in FY ’25
The rights issue approval is up to INR450 crores, primarily intended to reduce bank debt, with the ideal working capital cycle time targeted between 130 to 150 days, and the company plans to use the rights issue proceeds for debt reduction, aiming for a debt-to-EBITDA of under 3, ideally 2.5
The company has diversified its product customer base, especially in ibuprofen post-COVID, to an emerging market play
The company plans to shrink corporate operations between Bangalore and Chennai and close down its Hyderabad operations, with the CFO, Raghavendra Rao, moving on from Solara, and the company in the process of restating the critical role
One-off impact(100CR) details part of disclosures, willing to discuss further; gradual gross margin expansion expected from Q1 of next year.
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