- 10 Aug 2022
- ICICIdirect Research
INDOCO REPORTS BASE EFFECT IN DOMESTIC FORMULATIONS, OUTLOOK STRONG
INDOCO - 323 Change: -1.35 (-0.42 %)News: Revenues grew 6% YoY to Rs 408 crore. Domestic formulations de-grew by 7% YoY to Rs 200 crore while export formulations expanded 16% YoY to Rs 177 crore. EBITDA margins declined 497 bps YoY to 17.5% mainly due to lower gross margins (down 384 bps YoY to 67.6%). EBITDA de-grew 18% YoY to Rs 71.5 crore. PAT for the quarter came in at Rs 39 crore, down 3% YoY.
View: Q1 revenues were in line with our estimates while margins were below than expected. Domestic formulation was muted mainly due to Covid impact in base of Q1FY22 (14% growth adjusting for Covid sales in base) and de-growth was reflected in Respiratory (down 48% YoY) and Anti-infectives (down 48% YoY). The company’s domestic business continues to focus on brand building, thrust on chronic and sub-chronic segment as well as penetration in the north and east regions. On international formulations front, EU-GMP certificate for Goa Plant-I and Baddi (Plant-III) will boost the EU business, with availability of larger manufacturing capacity. Indoco is also consolidating its position in the emerging markets through active promotion of its brands in select markets.
Impact: Positive.