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In line sales, higher margin amid lower SG&A cost… Q3 revenues grew 8.4% YoY to | 8837 crore (I-direct estimate: | 8636 crore). US formulations grew 10.8% YoY to | 2761 crore. Indian formulations grew 9.4% YoY to | 2753 crore. Emerging markets business grew 8.4% YoY to | 1507 crore. RoW markets business grew 15.6% YoY to | 1276 crore. API segment de-grew 9.4% YoY to | 485 crore. EBITDA margins expanded 465 bps YoY to 27.2% (I-direct estimate: 23.0%) due to lower other expenditure and better gross margins. Delta vis-à-vis I-direct estimates was mainly due to significantly lower other expenditure. EBITDA grew 30.7% YoY to | 2406 crore (I-direct estimate: | 1986 crore). PAT more than doubled to | 1852 crore (I-direct estimate: | 1319 crore) vs. | 914 crore in Q3FY20. Delta vis-avis EBITDA was due to higher other income, lower interest expense and lower tax rate. Specialty diversification to be key for US business The US business comprises ~32% of turnover (FY20). The US product basket comprises 497 approved ANDAs, 90 pending final approvals (including 22 tentative approvals). It also has 55 approved NDAs and eight pending NDAs. US growth has also been backed by extensive infrastructure with 44 global manufacturing facilities. Due to a challenging environment on the generics front, the management plans to diversify into specialty products such as Ilumya, Levulan (dermatology), BromSite, Cequa, Xelpros (ophthalmic), Odomzo, Yonsa (oncology), etc.
