- 24 Jul 2024
- ICICI Securities
Indoco Q1FY25- Weak numbers, margins continue to trend below-par
INDOCO - 361 Change: -3.80 (-1.04 %)News: Revenues grew ~2% YoY to ₹ 424 crore driven by domestic formulations which grew 7% to ₹ 227 crore tracking strong growth Gastrointestinal and Anti-infectives. On the other hand, export formulations declined 2% to ₹ 157 crore tracking 6% and 10% de-growth in the US and Europe respectively. On the operational front EBITDA de-grew ~22% YoY to ₹ 48 crore due lower GPM (down 262 bps to 67.2%) and higher total expenses. Margins stood at 11% (down 327 bps).
Views: The performance continues to promise high and deliver less over the last few quarters both on the growth and margins front. The management is looking for a major overhaul, be it divesting of tail brands in the domestic formulations or initiation of site transfers and process optimisation for export driven plants. This, we believe is likely to take some time for normalisation of margins and growth trajectory.
Impact: Negative