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- 19 May 2022
- ICICIdirect Research
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JK LAKSHMI’S MARGIN IMPROVES SEQUENTIALLY LED BY CONTROLLED COSTS DURING Q4FY22
JKLAKSHMI - 825 Change: -4.75 (-0.57 %)News: Revenues grew 29% YoY to Rs. 1030 crore, driven by YoY growth of 78% in PFI to Rs. 257 crore and 28% growth in API to Rs. 248 crore. Formulations grew 14% YoY to Rs. 525 crore. EBITDA margins fell 656 bps YoY to 18.7% due to lower gross margins (down 834 bps YoY) and higher other expenditure. EBITDA de-grew 5% YoY to Rs. 193 crore and adjusted PAT declined 13% YoY to Rs. 111 crore. Delta vis-à-vis EBITDA was mainly due to higher tax expense being partially offset by higher other income, lower interest and tax expense
Views: Granules' revenues growth in this quarter was mainly on back of higher selling price realisation from Paracetamol and new launches in US. EBITDA margins drop was on account of pricing pressure in US and also increase in cost of KSM’s, solvents and increase in logistic cost. Two positive takeaways being - 1) sequential improvement in margins despite adverse business condition arising out of supply constraints of Para Amino Phenol (PAP), other input price cost increase and logistic cost increase and 2) share of non-core molecules increased to 19% in FY22 from 16% last year. Granules remains a decent player with clear vision to play on its strength of economies of scale and gradual expansion into more complex products/forms to improve margins
Impact: Neutral