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Operationally in-line; impairment led lower than expected earnings

* PIRPHARM’s revenues grew 7.9% YoY to INR27.5b (our est: INR27.5b) for the quarter.

* CDMO segment (65% of total sales) revenue grew 8% YoY to INR17.9b.

* Complex hospital generics segment (CHG; 26% of total sales) revenue grew 4% YoY to INR7.1b.

* India consumer healthcare segment (ICH; 9% of total sales) revenue grew 15% YoY to INR2.7b.

* Gross margin expanded 510bp YoY to 65.3%.

* However, the EBITDA margin contracted 40bp YoY to 20.4% (in-line), mainly due to lower operating leverage (employee costs/other expenses rose 290/260bp as a % of sales).

* EBITDA grew 6% YoY to INR5.6b (in-line).

* PAT grew 34% YoY to INR1.5b (our est: 1.9b) for the quarter, owing to lower tax burden (44% of PBT in 4QFY25 vs. 56% of PBT in 3QFY25).

* While revenue and EBITDA were in line with our estimates, PAT was much lower due to an impairment charge of INR447m for the quarter.

* For FY25, the company’s revenue/EBITDA/PAT grew 12%/21%/62% YoY to INR91b/INR14.4b/INR0.9b.

* During the quarter, its revenue/EBITDA/PAT missed the Bloomberg estimates by 5%/8%/19%.

Other highlights

* CDMO:

* 50% YoY growth in on-patent commercial manufacturing revenues to USD179m in FY25

* YoY improvement in EBITDA margin driven by better procurement strategies, cost optimization, and operational excellence initiatives

* CHG:

* Major GPO contract renewal and order wins supporting IA sales in the US. Witnessing encouraging traction in the RoW markets

* Capacity expansion in India completed and commercialized on time; poised to capitalize on ~US$400 mn2 Sevoflurane market opportunity in the RoW markets

* Received approval for Neoatricon®3 for multiple markets in EU and UK by our partner BrePco Pharma. Neoatricon® is the only pre-diluted, age-appropriate formulation of dopamine, approved for treating children and infants

* ICH:

* The ICH business surpassed the strategic revenue milestone of INR10b during the year.

* Added 21 new products and 31 new SKUs in FY25

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