GuruFocus -
- Total (EPA:TTEF) Income: INR 532 crore in Q2 FY25, compared to INR 552 crore in Q2 FY24 and INR 510 crore in the previous quarter ended June 24.
- EBITDA: INR 48 crore in Q2 FY25, compared to INR 71 crore in Q2 FY24 and INR 58 crore in the previous quarter ended June 24.
- EBITDA Margin: 9% in Q2 FY25, compared to 12.9% in Q2 FY24 and 11.4% in the previous quarter ended June 24.
- Net Profit: INR 19 crore in Q2 FY25, compared to INR 38 crore in Q2 FY24 and INR 30 crore in the previous quarter ended June 24.
- Pharmaceutical (TADAWUL:2070) Segment Margin: 8.4% in Q2 FY25.
- Specialty Chemical Segment Margin: 0.8% in Q2 FY25.
- R&D Expenditure: INR 5.84 crore in Q2 FY25, compared to INR 4.5 crore in Q2 FY24 and INR 4.74 crore in the previous quarter ended June 24.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IOL Chemicals And Pharmaceuticals Ltd (BOM:524164) reported a stable total income of INR532 crore for Q2 FY25, showing resilience despite challenging market conditions.
- The company has acquired 11 acres of land for a Greenfield manufacturing facility, indicating plans for future expansion and growth.
- Export revenue from non-Ibuprofen API portfolio increased by 20-25% from the previous quarter, highlighting successful diversification efforts.
- The company has received various regulatory approvals, including from the European market, which could enhance future export opportunities.
- IOL Chemicals And Pharmaceuticals Ltd is focusing on cost efficiency and market strategy improvements to enhance profitability in the long term.
- The EBITDA margin for Q2 FY25 decreased to 9% from 12.9% in the same quarter last year, indicating pressure on profitability.
- Net profit for the quarter dropped significantly to INR19 crore from INR38 crore in the previous year, reflecting financial challenges.
- Employee expenses increased due to variable pay and manpower expansion, impacting overall cost structure.
- The company is facing challenges with subdued API prices and increased competition, particularly in the Ibuprofen segment.
- There is uncertainty regarding the timeline for US FDA inspections and approvals, which could delay market expansion plans.
A: The increase in employee expenses is due to variable pay for the previous year, which was paid in July 2024. Additionally, regular increments for the current financial year and an increase in manpower for upcoming projects and capacity expansions contributed to the rise.
Q: Regarding the recently acquired land, will it be used for the pharmaceutical segment or the chemical segment?
A: The land will be used for the existing business of the company, which includes both chemical and API segments. The specific arrangement between the segments is yet to be decided.
Q: Could you provide a breakdown of the export percentage for the non-Ibuprofen API portfolio?
A: The export percentage for the non-Ibuprofen API portfolio has increased by around 20-25% from the June quarter and has doubled compared to the same quarter last year.
Q: Has the exit of SI Group from the Ibuprofen space started benefiting the company, or have new players entered the market?
A: SI Group has announced the closure of their Ibuprofen facilities due to high production costs, which is expected to be completed by March 2025. This may create opportunities, but the impact is not expected to be significant as their capacity was not large.
Q: What is the rationale behind seeking Chinese approval for Metformin, considering the cost leadership of Chinese producers?
A: Chinese approval allows us to attract global players in China to procure Metformin from India, providing an alternative supplier option. This aligns with the strategy of many companies to have multiple suppliers for a product.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.