- 25 May 2022
- ICICIdirect Research
Ipca margins plummet in Q4
IPCALAB - 1385 Change: 17.10 (1.25 %)News: Revenues grew 16% YoY to Rs 1289 crore (I-direct estimate: Rs 1265 crore) mainly on back of strong YoY growth of 27% in domestic formulations to Rs 552 crore (I-direct estimate: Rs 503 crore). Export formulations grew by mere 3% YoY to Rs 347 crore (I-direct estimate: Rs 356 crore). In exports, branded business grew 2% YoY Rs 103 crore (I-direct estimate: Rs 111 crore). APIs sales declined by 1% YoY to Rs 258 crore (I-direct estimate: Rs 300 crore). EBITDA margins declined 352 bps YoY to 17% (I-direct estimates of 21%) amid YoY 269 bps decline in Gross margins to 67% and higher other expenditure. Subsequently, EBITDA de-grew 4% YoY to Rs 219 crore (I-direct estimate: Rs 266 crore). PAT de-grew 19.2% YoY to Rs 130 crore (I-direct estimate: Rs 174 crore). Delta vis-à-vis EBITDA was mainly due to higher tax rate, interest expenses, depreciation and lower other income.
Views: Ipca Laboratories’ revenues was in line with I-direct estimates but margins was a significant miss. Ipca remains a decent player with judicious mix of strong domestic franchise and a spread out exports model with healthy balance sheet. Going ahead, with firm growth tempo in domestic formulations, good prospects both for API exports, formulation exports, we expect further improvement in financial parameters.
Impact: Neutral