- Revenues for the quarter stood at ₹6002 Cr (1% decline YoY). EBITDA was at ₹1016 Cr (20% decline YoY) for the quarter. EBITDA margins for the quarter were 16.9%. PAT stood at ₹604.3 Cr (80% decline YoY).
- Revenue from formulations was ₹4992 Cr (12% decline YoY). Formulations contributed about 83% of total revenues. Revenue from the API business stood at ₹1010 Cr (48% growth YoY) and contributed about 17% of revenues.
- The revenues from the US formulation business declined by 4.4% YoY to ₹2745.2 Cr and accounted for 45.7% of revenues.
- During the quarter, they filed 5 ANDAs including 3 injectables. They also received approval for 4 ANDAs including 1 injectable. The company has launched 7 products during the quarter including 4 injectables.
- Europe revenue in Q3 FY22 posted a growth of 1.4% YoY to ₹1694.3 Cr. Europe Formulations accounted for 28% of revenues. Revenue from Growth Markets formulations was largely flat on a YoY basis and grew by 2.8% QoQ to ₹397 Cr and accounted for 6.6% of revenue. ARV business revenue for Q3 FY22 stood at ₹155.7 Cr, a decrease of 64.9% YoY and improved 7.4% QoQ, accounting for 2.6% of revenues.
- R&D expenditure for the quarter stood at 6.6% of the revenue.
- Raw material costs increased by 4% on average during the quarter and the freight costs increased more than 20% QoQ. .
- Out of the total decline in gross margins, about 1.25% is due to change in product mix and the rest is high raw material costs.
- They are going to enter the Domestic Branded Formulations market – most likely through an inorganic opportunity. They currently have strong cash flows and will be receiving another $300 million cash flow in the next 4-5 quarters.
- The branded generics business in India is changing where you don’t need to hire thousands of market reps anymore. Their goal is to reach ₹1000 Cr sales within 1 year of entering the domestic market.
- They received a repeat warning letter for the Unit 1 plant which they will try to resolve in the next one year. They also have a US plant which has received a repeat warning letter since it is a 68 year old building. It is a small plant with $2.5 million sales and it is loss making. They are considering shutting down that plant. There is an audit ongoing in the Unit 5 sterile API plant.
- All their plants are due for inspection now as USFDA has not been conducting in-person audits for close to 2 years.
- They have scheduled launches of 10-15 products for FY23. They also have a significant number of launches for FY24 which will help them reach revenues of $650-700 million in FY24 for the injectables business.
- Under the PLI scheme, they will be manufacturing 15,000 tons of Penicillin G at Kakinada. The land has been acquired and the work is ongoing, the total capex required is going to be ₹1850 Cr and they have already spent close to ₹500 Cr. It was scheduled to start in FY23 but they have received an extension from the government upto end of FY24 due to COVID related issues.
- They have filed their second oncology biosimilar with the European Medicine Agency. They have 3 more biosimilar in Phase 3 clinical trials and are looking to file one of them which is an oncology monoclonal antibody in the next financial year.
- There may be some raw material issues from China in the coming quarter. Due to the Winter Olympics they may face some controls on manufacturing which can cause shortages.
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