Dishman Carbogen hits 5% lower circuit on weak June quarter results

Shares of Dishman Carbogen Amcis were locked in 5 per cent lower circuit at Rs 169.40 on the BSE on Wednesday after the company reported a consolidated net loss of Rs 21.4 crore for the quarter ended June 2020 (Q1FY21). The pharmaceutical firm had posted profit of Rs 34.31 crore in the year-ago quarter.

Till 09:29 am, a combined around 30,000 equity shares had changed hands on the NSE and BSE. There were pending sell orders for 100,000 shares on both the exchanges. The stock had a strong run-up, and it hit a 52-week high of Rs 216.65 on August 4, rising nearly five-fold from 52-week low level of Rs 46.45, touched on March 30, 2020.

The company’s total revenues during the quarter under review declined 9 per cent year on year (YoY) at Rs 474 crore as contract research & manufacturing services (CRAMS) India revenue decreased by 80.7 per cent YoY, due to the impact of Covid-19 pandemic and risk analysis measures undertaken due to European Directorate for the Quality of Medicines & HealthCare (EDQM) audit observations.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins contracted by 1,381 basis points to 9.1 per cent from 22.9 per cent in the previous year's quarter.

Dishman Carbogen said the results for the current quarter (Q1 FY21) are not comparable with previous quarters due to truncated period of operations in the current quarter.

The business operations remained shut down temporarily during the quarter owing to the lockdown imposed due to Covid-19 pandemic. Moreover, the business was also impacted due to certain observations from the EDQM audit during inspection of the Bavla site for the company’s product Dihydrotachysterol.

The management said the performance is expected to normalize during upcoming quarters due to resumption of business operations on the back of unlocking of economy. Moreover, the company has appointed consultants to supplement the team in India in order to rectify the deficiencies highlighted during EDQM audit. The company has submitted the Corrective Action Plan to the EDQM authority on August 21, 2020 and started its implementation.

The company has a strong basket of about 18 APIs in Phase III development. The company is focused on improving its capacity utilization at its manufacturing facilities by targeting small and mid-sized global biotech companies and diversifying across new geographies. Due to the current and prospective opportunities, the company has decided to set up additional development and small-scale manufacturing facilities in Switzerland and four France, it said.