Astec Lifesciences reports strong growthASTEC - 1832 Change: 37.95 (2.12 %)
News: Astec Lifesciences reported revenue growth of 49% YoY to Rs.173.4 crore against our estimates of Rs.144.1 crore. The growth was primarily outlined due to spillover impact of Rs.20-30 crore sales from last quarter. Apart from this, commencement of herbicide plant should also have driven CRAMS growth for the quarter. We also believe better realisation across triazole fungicide portfolio should have supported growth for the enterprise business, which largely constitutes ~80% to the overall revenues. OPM expanded by 1130 bps YoY to 24.7% owing to higher gross margins (+1110bps YoY), which led EBITDA growth of 175% YoY to Rs.42.9 crore against our estimates of Rs.30.3 crore. PAT for the quarter was up by 250% YoY to Rs.24.8 crore against our estimates of Rs.16 crore. The growth was led by strong operational performance along with lower tax rate (25% v/s 37% in Q3FY21).
Views: Since herbicide plant came on stream from August, we expect better utilisation to inch up CRAMS revenue mix to the overall revenue. Moreover, pricing growth for base enterprise business along with CRAMS can likely to aid financial performance. With new R&D unit coming on stream from Q3FY23, one can expect commercialisation of niche molecules over the medium term, in turn improves the business outlook.