Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue grew by 3% to INR1,648 crore for the quarter.
- EBITDA increased by 18% to INR257 crore, representing 15.6% of sales.
- Net profit rose by 12% to INR153 crore, with EPS improving to INR7.79 per share.
- The India branded business saw a 6% growth, with strong performance in specialty therapies like cardiology and anti-diabetic segments.
- The US business experienced a 25% growth in volumes, with successful FDA inspections and plans to launch 10 new products in H2.
Negative Points
- Gross borrowings increased to INR995 crore from INR784 crore in the previous year.
- The API business declined by 15% due to price erosion and loss of key accounts.
- The domestic specialty segment experienced slower growth than anticipated.
- The company faced supply constraints in the first half, impacting inventory levels and debt.
- Continued price erosion in the US market, with expectations of high single to low double-digit declines.
Q & A Highlights
Q: Can you provide insights on the domestic business growth, particularly in the specialty and acute segments?
A: The domestic business is expected to grow better than the market, although the specialty segments have seen slower growth. Antibiotics and acute segments have been flat, but we are performing better than the market. We aim for high single-digit growth for the full year, but achieving 15% growth in H2 may not be possible. The focus is on improving productivity rather than increasing field force numbers.
Q: What are the expectations for the US business in the second half of the year?
A: H2 is expected to be much stronger due to back-ended launches and increased market share. We plan to launch about 10 products in H2, which should drive growth in the US and ROW markets.
Q: How is the company managing price erosion in the US market?
A: Price erosion remains consistent, ranging from high single digits to low double digits. Despite this, we expect H2 to be better due to new product launches and increased market share.
Q: Can you elaborate on the R&D spending and focus areas?
A: R&D spending for the fiscal year is expected to be between INR 505 crore to INR 520 crore, slightly lower than initially projected. About 70% of R&D is focused on formulations, with the remaining 30% on APIs.
Q: What are the reasons for the decline in the API business, and what is the outlook?
A: The API business has faced price erosion and loss of key accounts. Some partners have switched to alternate sources. We expect the API business to stabilize and recover towards the end of the year or next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
