Zydus Lifesciences Q4 net dips to 24% Rs 397 cr, revenue up 5%

Company says operational performance came amid geopolitical turmoil resulting in supply chain challenges and inflationary pressures

On the back of growth in domestic and emerging markets formulations businesses, Zydus Lifesciences Ltd. posted a net profit of Rs 397.4 crore for the fourth quarter ended March 31, 2022 of financial year 2021-22 (FY22).

The pharma major had reported a net profit of Rs 679 crore for the fourth quarter ended March 31, 2021 of the previous financial year 2020-21 (FY21).  However, when adjusted for one-time inventory provision, exceptional and non-recurring items as well as profit from discontinued operations, the net profit for Q4 of FY21 stood at Rs 525 crore.

Revenue from operations for the quarter grew by 5 per cent to Rs 3863.8 crore on a year-on-year (YoY) basis, up from Rs 3670 crore in Q4 of FY'21.

Commenting on the results, Sharvil Patel, Managing Director, Zydus Lifesciences Limited said that the operational performance came amid geopolitical turmoil resulting in supply chain challenges and inflationary pressures.

"Our key businesses performed well aided by an agile supply chain which helped sustain profitability. While the quarter’s reported margins were impacted by one-off inventory related provisions, adjusted profitability remained above 20 per cent. Progress on our innovation efforts to build a robust pipeline for the future has been on track. We remain committed to our pipeline execution to drive sustainable growth," Patel added.

In terms of geography, Zydus Lifesciences's domestic business, which comprises formulations and consumer wellness segments and accounts for 48 per cent of consolidated revenues, grew by 11 per cent YoY to Rs 1797 crore. However, excluding sales of COVID related portfolio, the branded India business grew by 13 per cent YoY.

Of the overall domestic business, the company's formulations sales grew by 14 per cent YoY to Rs 1164 crore with the company's thrust on volume expansion continuing during the quarter. During the quarter, Zydus' formulations business gained market share in key therapeutic areas viz. anti-diabetic, cardiovascular and gynecology on a YoY basis, based on AWACS data. On the super specialty front, Zydus retained leadership position in the nephrology segment while in the oncology space, the company was the fastest growing one in India.

The company's US formulations business, however, saw a dip of four per cent YoY to Rs 1423.3 crore during the quarter. The US business accounts for 38 per cent of its consolidated revenues.

The company filed one abbreviated new drug application (ANDA) and received final approval for five new products during the quarter in its US business even as it launched four new products in the market. On the specialty front, Zydus entered into an asset purchase agreement with BridgeBio Pharma Inc. for acquisition of NULIBRYTM (Fosdenopterin for Injection). The product is approved by the USFDA to reduce the risk of mortality in patients with molybdenum cofactor deficiency (MoCD) Type A, an ultra-rare, life threatening pediatric genetic disorder.

Research & Development (R&D) investments for the quarter stood at Rs 2,69.7 crore, amounting to seven per cent of revenues.

The company's emerging markets business, which comprises key markets such as Sri Lanka, Philippines, Brazil, South Africa and Mexico, registered revenues of Rs 275 crore, up 10 per cent YoY. The business accounted for seven per cent of consolidated revenues.

Zydus's active pharmaceutical ingredients (API) revenues took a hit of two per cent decline at Rs 136.3 crore. The API business accounted for four per cent of consolidated revenues.

The quarter also saw Zydus bag an emergency use approval (EUA) from the DCGI for its Covid-19 vaccine ZyCov-D as a two-dose vaccine for the age group of 12 years and above. With this approval, the vaccine will now be administered on day 0 and day 28. Earlier, the vaccine was approved in a three-dose regimen to be administered on day 0, day 28 and day 56.

Meanwhile, apart from recommending a dividend of 250 per cent, the Board approved the proposal to buyback equity shares for an aggregate amount upto Rs 750 crore (excluding tax and other charges), being 1.13 per cent of total paid-up equity share capital at a price of Rs 650 per share, which came to 90 per cent premium to closing price of May 19, 2022.