- 10 Aug 2022
- ICICIdirect Research
Indoco reports base effect in domestic formulations, outlook strongINDOCO - 325 Change: 0.55 (0.17 %)
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.