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Procter & Gambler Health: Q1 numbers skewed with lower than expected revenue but with better margins and profitability

News: P&G Health's Q1FY22 (July-June fiscal year) revenue increased 3.3% YoY to Rs.272.8 crore. EBITDA margins declined 97 bps to 28.6% in Q1FY22 due to significant increase in other expenditure. EBITDA was flat YoY at Rs.78.1 crore in Q1FY22. Subsequently, PAT declined 6.6% YoY to Rs.55.4 crore in Q1FY22. Delta vis-à-vis EBITDA was mainly due to higher tax expenses and lower other income.

Views: Aside from quarterly gyrations, PGHL possess MNC pharma traits like strong brand stickiness, growth, earnings visibility, strong b/s etc. The key differentiator for PGHL is that its core category is VMS, which, as a therapeutic category, is likely to be rediscovered due to increased awareness in the post pandemic world. Overall, PGHL remain focused on executing it’s strategy of offering superior brands, driving productivity, increasing reach, and improving awareness.