Granules Q3 PAT rises 23% YoY to Rs 124 cr

Granules India reported 23.24% jump in net profit to Rs 124.32 crore on a 15% increase in revenue from operations to Rs 1,146.12 crore in Q3 FY23 over Q3 FY22.

The revenue growth was primarily driven by higher paracetamol API sales in the United States.

EBITDA improved by 33% to Rs 231 crore in Q3 FY23 from Rs 174 crore in Q3 FY22. EBITDA margin was 20% in Q3 FY23 as against 17% in Q3 FY22.

The company's revenue share from the USA increased to 49.4% in Q3 FY23 as compared to 43.1% YoY. Further, active pharmaceuticals ingredients (API), pharmaceutical formulation intermediates (PFI), and finished dosages contribute 35.8%, 18.6%, and 45.6% of revenue from operations respectively.

While operating cash flow was quite healthy at Rs 161 crore, free cash flow was negative at Rs 32.5 crore; impacted due to additional deployment of Rs 50 crore in our new expansion plan with green initiatives in Kakinada and Rs 42.5 crore for land acquisition in Vishakhapatnam.

Return on capital employed (ROCE) increased to 25.6% as compared to 21.2% YoY during the period under review.

Net debt stood at Rs 894 crore as against Rs 554 crore in Q2 FY23 and net debt to EBITDA stood at 0.98x. Increase in net debt was on account of reduction in cash due to buy back of shares and incremental capex for new initiatives.

Dr. Krishna Prasad Chigurupati, chairman & managing director of Granules India said, In the current quarter we continued to cater to higher demand for Paracetamol. Opportunities in paracetamol are likely to continue and our geography expansion strategy in Europe is likely to yield higher turnover and EBITDA in future periods. We are also seeing a price and margin erosion in Q3 and expect similar trend in Q4.

In the current quarter we had changed our 3PL partner in USA to a better partner who has better automation and digital capabilities. However, during the transition we have suffered some sales loss in USA and that is the reason for better standalone financial performance as compared to consolidated financial performance. We expect that smoothening of the logistics in USA could take a quarter more.

Meanwhile, Granules India said that its wholly-owned foreign subsidiary, Granules Pharmaceuticals has received approval from US Food & Drug Administration (USFDA) for its abbreviated new drug application (ANDA) Amphetamine Mixed Salts capsules; indicated for the treatment of attention deficit hyperactivity disorder (ADHD).

Granules India is a vertically integrated fast growing Indian pharmaceutical company. It is present across the entire manufacturing value chain - from active pharmaceutical ingredients (APIs), pharmaceutical formulation intermediates (PFIs), and finished dosages (FDs).

The scrip fell 0.26% to currently trade at Rs 311.30 on the BSE.

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