Laurus Labs Ltd.'s net profit for the October-December quarter fell to ₹23 crore from ₹203 crore it reported during the same period last year. A CNBC-TV18 poll had expected the bottomline figure to halve to ₹108 crore.
Revenue for the quarter fell 22.6% from last year to ₹1,195 crore. The company attributed the drop in revenue to a strong CDMO business and API revenues in the base quarter. "Excluding the large Purchase Order (PO) supplies, the underlying revenue increased by 6% year-on-year," the company said in an investor presentation.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter fell to ₹181 crore, which is 55% lower than the ₹403.6 crore reported during the same period last year.
EBITDA margin for the quarter fell to 15.1% from 26% last year. During the September quarter, the company's margin stood at 15.4%. Margins were impacted due to negative operating leverage.
For the quarter ending December, the company's net leverage or net debt to EBITDA on a trailing 12-month basis stood at 3x from 1.9x in September and 1.3x during the same quarter last year.
The company continues to maintain that financial year 2024 will be a year of consolidation.
Within the company's business segments, Laurus' formulations business saw growth of 47% from last year and 11% sequentially, driven by a low base and stable pricing. "Underlying demand trends remain healthy with new tender wins," the company said. Formulations contributed 31% of the revenue this quarter.
However, the core API business, which contributes to nearly half of the overall topline, declined by 9% during the quarter. The company expects the March quarter to benefit from a scheduled CMO delivery and strong volumes in oncology APIs.
The CDMO Synthesis business also declined by two-thirds or 67% due to a high base courtesy of a large purchase order executed last year.
Expansion of base pipeline projects and commencement of animal health contract supplies, along with growth in existing and new CMO contracts, key product approvals, ramp-up of new capacity in the Bio business are highlighted as some of the sales drivers.
However, completion of a large purchase order in financial year 2023, pricing headwinds in ARV APIs and formulations business are some of the challenges.
"We expect overall business momentum to pick, supported from healthy order book and execution on strategic manufacturing partnerships along with ongoing realisations of cost initiatives driving improvement in operational results," said VV Ravi Kumar, Executive Director and CFO of Laurus Labs was quoted as saying.
"We will continue to prioritise investments in our business and growing pipeline to drive near and long-term growth across our portfolio," he added.
Shares of Laurus labs ended 0.5% higher at ₹400.90.
First Published: Jan 24, 2024 3:46 PM IST
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