Update on Granules India Ltd by Motilal Oswal
Operating margin better than our estimates
* Sales grew 29% YoY to INR10.3b (est. INR10.5b), driven by PFIs and APIs.
* Sales of pre-formulated ingredients grew 78.3% YoY to INR2.6b. API sales grew 27.7% YoY to INR2.5b. FDF sales grew 14% YoY INR5.3b. Gross margin contracted by ~830bp YoY to 48.9% due to a change in segmental mix.
* EBITDA margin contracted at a slightly lower rate of 660bp YoY to 18.7% (est. 53.7%). Higher raw material cost was partially offset by lower employee expenses (-200bp YoY as a percentage of sales).
* EBITDA fell 4.6% YoY to INR1.9b (est. INR1.8b) in 4QFY22.
* Adjusted PAT declined at a higher rate (13% YoY) to INR1.1b (inline), due to a higher tax rate in 4QFY22.
* In FY22, sales grew 15.8% YoY to INR37.4b, while EBITDA/PAT declined by 19%/27.5% YoY to INR7b/INR4b.
Other highlights
* GRAN filed one ANDA, received two ANDA approvals from the USFDA, and filed two US DMF in 4QFY22.
* Revenue share of non-core molecules stood at 19% in FY22 v/s 16% in FY21.
*Free Cash Flow stood at INR49m in 4QFY22.
* Net debt at the end of 4QFY22 stood at INR7b v/s INR7.3b QoQ.
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