- Revenue grew by 34% YoY
- EBITDA Margin expanded by 867bps to 27.6%, driven by improved product mix and realisations
- Profit after tax (PAT) grew by 123% YoY
Commenting on the results Mr. P. Vamsi Krishna, Executive Director - SMS Pharmaceuticals Limited said, "The company continued to maintain the robust growth trajectory. For Q2FY22, thecompany registered revenue, EBITDA and PAT growth of 34%, 96% and 123%, respectively, on YoY basis. EBITDA margins expanded approximately by 870bps. The robust performance was driven by improved product mix, pick-up in the key therapeutic areas and the operating leverage. This performance a testimony of company's agility, adaptability and strong execution capabilities. The growth trajectory is expected to accelerate in the upcoming quarters underpinned by company's leadership position in top therapeutic areas, strong demand, healthy product launch pipeline.
SMS Pharma, as a strategy, has focused on quality, market leadership and backward integration steered by strong R&D capabilities, in top therapeutic areas such as ARV, anti-migraine and anti ulcer over the years. This strategy has boded well, as the company did not witness any impact by recent supply chain disruptions and higher input costs. It has also reduced the import dependency on China significantly for KSMS and key raw materials.
Company's global presence, strong domain expertise, cost leadership, economies of scale and long standing relationships with suppliers and customers has created a unique value proposition. As a result, SMS Pharma has emerged as sustainable, scalable and self-reliant API player. Going forward, the company will continue to invest in backward integration to further strengthen the value proposition. The company is also leveraging long-standing relationships and domain expertise to foray into new therapies, products and geographies.
The company has incurred a capex of Rs. 198 crores in FY21 aimed towards capacity augmentation at the Vizag plant. This brownfield capex is aimed towards capacity augmentation multiple products and therapies. The incremental capacity addition through the capex is 1,300 KL, predominantly aimed towards Ibuprofen capacity expansion. With this capex, company is expected to be one of the largest Ibuprofen manufacturers globally. Majority of the capex is funded through internal accruals and minimal debt, thus maintaining the robust Balance Sheet position. Higher margins and profitability ratios expected through operating leverage and incremental revenue. This capacity augmentation is expected to commercialize fully by the end of FY22.
Multiple industry tailwinds such as favourable geo-political conditions, Make in India, PLI Scheme, China 1 strategy, cost structure coupled with internal triggers such as capacity expansion, leadership position in key therapies and strong balance sheet are expected to drive the next leg of growth along with improved margins and return ratios."