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Suven Pharma: Quarterly revenue growth amid steady margins

News: Q2FY22 revenue grew 26.8% YoY to Rs.301 crore. EBITDA margins declined 103 bps YoY to 40.5% mainly due to increase in other expenditure. Subsequently, EBITDA grew 23.6% YoY to Rs.121.8 crore. PAT was up 30.9% YoY to Rs 97 crore. Delta vis-a-vis EBITDA was due to higher other income and profit share from associates.

Views: Suven’s quarterly revenues were better than I-direct estimates while margin was lower-than-expected. Going ahead, the company hopes to achieve 15-20% growth in FY22 based on strong order book position. It also plans to invest Rs.600 crore for modernisation, technology upgradation, which likely stems from the need to cater to the changed priorities and requirements of its clients, the benefits of which may be visible in the long run. We continue to emphasise on the strong execution capability and focused approach without the burden of success/failure of the innovative pipeline (now part of Suven Life Sciences).