Conference Call with Aarti Drugs Management and Analysts on Q4FY23 Performance and Outlook. Listen to the full earnings transcript.
Pharmaceutical company Aarti Drugs announced Q4FY23 & FY23 results: Q4FY23: Revenue stood at Rs 743.3 crore as against Rs 697.2 crore, a growth of 7% YoY EBITDA stood at Rs 94.4 crore as against Rs 89.0 crore YoY. EBITDA Margin (%) came in at 12.7% PAT stood at Rs 56.2 crore as against Rs 55.3 crore YoY. PAT Margin (%) stood at 7.6% Domestic revenue grew approximately by 13% while exports grew by around 7% YoY for Q4FY23 Q4FY23 revenue for formulation stood at Rs 56.8 crore as against Rs 66.6 crore Approximately 60% of the revenue came from exports during Q4FY23 FY23: Revenue stood at Rs 2,718.2 crore as against Rs 2,500.0 crore, a growth of 9% YoY EBITDA stood at Rs 307.8 crore as against Rs 340.8 crore YoY. EBITDA Margin (%) came in at 11.3% PAT stood at Rs 166.4 crore as against Rs 205.0 crore YoY. PAT Margin (%) stood at 6.1% Result PDF
Aarti Drugs announced Q3FY23 results: Consolidated Q3FY23: Revenue stood at Rs 1,975.0 crore as against Rs 1,802.7 crore, a growth of 10% YoY. EBITDA stood at Rs 213.4 crore as against Rs 251.8 crore YoY. EBITDA margin (%) came in at 10.8%. PAT stood at Rs 110.2 crore as against Rs 149.7 crore YoY. PAT margin (%) stood at 5.6%. Consolidated 9MFY23: Revenue stood at Rs 665.0 crore as against Rs 641.5 crore, a growth of 4% YoY. EBITDA stood at Rs 71.7 crore as against Rs 96.7 crore YoY. EBITDA margin (%) came in at 10.8%. PAT stood at Rs 36.7 crore as against Rs 58.3 crore YoY. PAT margin (%) stood at 5.5%. Standalone Q3FY23: Standalone Q3FY23 revenue stood at Rs 626.5 crore as against Rs 594.8 crore, a growth of 5% YoY. The standalone business contributed ~92% to the consolidated revenue for the quarter. 61% of the revenues came from the domestic market and 39% from the export market for Q3FY23 for a standalone business. Domestic revenue grew approximately by 8% while exports grew by around 2% YoY for Q3FY23. Within the API business, the antibiotic therapeutic category contributed ~45%, anti-diabetic ~16%, anti-protozoal ~16%, anti-inflammatory ~12%, antifungal ~8% and the rest contributed ~3% to total API sales for Q3FY23. Segment: Q3FY23 revenue for formulation stood at Rs 49.9 crore as against Rs 54.9 crore. ~39% of the revenue came from exports during the quarter. Commenting on the results Mr. Adhish Patil, Chief Financial Officer – Aarti Drugs Limited said, “The company’s overall API revenue for the quarter grew by 9% YoY. However, due to a correction in raw material prices, the company made some price adjustments in order to defend its market share. Owing to API price correction, the company undertook inventory loss of approx. Rs 6 crores as a prudent practice. All of this weighed on the gross margins by almost ~100 bps during the quarter. The company has increased the inventory levels of imported KSMs and other raw materials due to a sudden spike of Covid-19 cases and holidays related to a new year in China. API sales volume in exports were affected to some extent due to shortage of US Dollar in many countries. The finance cost also increased due to higher working capital requirements and rising interest rates. The company has already received commitments from the customers for the brownfield expansion products as well as has received committed line of order for a campaign based product. As a result, the company is eyeing to double the revenue from Specialty Chemicals business within the next 12 months through the ongoing brownfield expansion. Formulation segment revenue stood at Rs 49.9 crore for the quarter. The formulation segment contributed 8% to the consolidated revenue for the quarter. The company’s core focus remains on growing the exports revenue. The capex for 9MFY23 stood at Rs 115 crore and is expected to be in the range of Rs 200-250 crore for the entire FY23. Tarapur greenfield facility is expected to be completed well within the timeline which will enable the company to foray into new API therapy of Dermatology. The construction activity for the Gujarat capex has also been ramped up. Tarapur specialty chemicals facility will be fully ramped up post the installation of equipments which are being imported. These equipments are expected to arrive by April 2023. The company’s various capex initiatives are expected to be completed and fully scaled up over the period of next 2 years in a phased manner and are expected to bolster the topline and profitability growth.” Result PDF
Aarti Drugs announced Q2FY23 results: Q2FY23 (Consolidated): Revenue stood at Rs 687.8 crores as against Rs 579.7 crores, a growth of 19% YoY. EBITDA stood at Rs 74.3 crores as against Rs 73.8 crores YoY. EBITDA Margin (%) came in at 10.8%. PAT stood at Rs 38.7 crores as against Rs 42.6 crores YoY. PAT Margin (%) stood at 5.6%. H1FY23 (Consolidated): Revenue stood at Rs 1,310.0 crores as against Rs 1,161.3 crores, a growth of 13% YoY. EBITDA stood at Rs 141.7 crores as against Rs 155.1 crores YoY. EBITDA Margin (%) came in at 10.8%. PAT stood at Rs 73.5 crores as against Rs 91.4 crores YoY. PAT Margin (%) stood at 5.6% Commenting on the results Mr. Adhish Patil, Chief Financial Officer – Aarti Drugs Limited said, “The company achieved healthy growth despite the geopolitical uncertainties, adverse currency movement and macro-economic volatilities, led by higher realizations in APIs and Specialty Chemicals. The quarter witnessed the highest-ever realizations for most of the API products along with moderation in input costs. We firmly believe that there is a potential for further moderation in the quarters, which in turn can expand the margin profile of the company. The company witnessed a marginal increase in OPEX due to upward movement in power and fuel costs along with one-time arrears paid to the employees and Labour contractors. Further, the finance cost was slightly impacted due to higher working capital requirements and even theinterest rat e has gone up in the quarter. Nevertheless, the business is optimistic about attaining its growth and margin goals on the back of higher efficiency and falling raw material prices. Revenue from the formulation segment totalled Rs 82.5 crores for the quarter, up 9% YoY. The formulation segment's share of the total revenue for the quarter was 12%. The formulation segment's core focus area remained exports. During the quarter, exports contributed 44% of the total revenue. Specialty Chemicals, Intermediates & Others continues to be a key enabler for growth of the company. The growth in this segment is mainly driven by the niche Chlorosulphonation products along with recently augmented capacity. The company will focus to further enhance the market share for this segment. The capex for H1FY23 stood at Rs 77 crores and is expected to be in the range of Rs 200-300 crores for the entire FY23. The civil construction activity has picked up the pace for Gujarat capex which was impacted due to heavy monsoon during H1FY23. Tarapur specialty chemicals brownfield capacity which had taken scale-up batches earlier have now been ramped up and expected to contribute to the topline meaningfully from Q3FY23 onwards. Tarapur greenfield API capex is also expected to be completed within its timeline. These capex initiatives, funded through an optimal mix of debt and internal accruals are expected to drive the growth across segments along with improvement in profitability and market share. The company remains optimistic about the prospects for all the segments. In the following years, the growth trajectory for all segments is anticipated to remain solid, driven by incremental capacity addition and higher utilisation of existing capacities.” Result PDF