Granules India rises after Q4 PAT jumps 44% to Rs 92 cr

Granules India rose 2.23% to Rs 185.65 after consolidated net profit jumped 44.2% to Rs 92.34 crore on 2.2% decline in net sales to Rs 599.88 crore in Q4 March 2020 over Q4 March 2019.

Revenue during the quarter was impacted due to restriction imposed on paracetamol API (active pharmaceutical ingredients), PFI (Pharmaceutical Formulation Intermediates) and ED. Restriction removed for PFI and FD (Finished Dosages) on April 2020 and API by end of May 2020.

Consolidated profit before tax soared 62.3% to Rs 136.70 crore in Q4 March 2020 as against Rs 84.22 crore in Q4 March 2019. Current tax expenses jumped 123% to Rs 35.93 crore in Q4 March 2020 as against Rs 16.11 crore paid in Q4 March 2019. The result was declared post trading hours yesterday, 2 June 2020.

EBITDA grew 2.5% to Rs 100 crore in Q4 FY20 over Q4FY19. The EBITDA during the quarter was impacted due to onetime expense of Rs 22 crore due to impairment of investment at Granules Pharmaceuticals (GPI). Excluding one-time expenses, EBITDA jumped 25% to Rs 121 crore and EBITDA margin expanded by 437 bps (basis points) to stand at 20% for the quarter.

With regards to COVID-19 pandemic, Granules India has assured that it is taking all the necessary steps to ensure businesses and safety, focusing on people, business continuity and providing solutions to support global response. The company, in its press release, further added that: "Our business is performing well and has demonstrated resilience in the face of significant demand. We have implemented business continuity plans across all our essential operations. The liquidity position of GIL remains strong and we have sufficient cash for our current operational needs and access to significant additional undrawn committed sources of finance, if required. With respect to our supply chain, we are closely monitoring all parts of our manufacturing network and have been able to respond quickly to any fluctuations in demand."

The buyback of shares to the extent of 4.9% of paid up capital is expected to be completed by the end of June 2020.

Commenting on the Q4 results, Krishna Prasad Chigurupati, the chairman & managing director (MD) of Granules India, has said that: "I am happy to share with you that our growth momentum for FY20 and Q4FY20 has been very robust despite the COVID-19 led challenges and we continue to experience strong demand across our products. FY20 reported a 14% growth in revenue, an impressive EBITDA margin expansion of 337 bps and a year-on-year PAT growth of 42%. This is the result of the launch of new profitable products through GPI, increased FD sales, operational excellence and a vigilant watch over our margins via optimal product mix, capacity utilization and minimization of our expenses. Our regulated markets (North America and Europe) contributed 73% of revenues in FY20. During the year we made 14 filings; US ANDAs- 11, EP-2 and UK-1. We have received approvals for 12 ANDAs and launched 5 products in the US. We are happy to have achieved our stated guidance in FY20 and going forward, we expect to maintain our focus on delivering superior shareholder value."

Granules India is a growing pharmaceutical manufacturing company. The company produces finished dosages (FDs), pharmaceutical formulation intermediates (PFIs) and active pharmaceutical ingredients (APIs).

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