Morepen records 70 percent increase in Profit before tax in Q2
Consolidated Revenue grows by 17%
Morepen Laboratories Limited (NSE: MOREPENLABS, BSE: 500288) has reported another quarterly earnings with a stellar performance in Q2’FY22 with a growth of 70 per cent in its consolidated Profits (before tax) at Rs. 46.86 crores. Profit after tax (PAT) for the quarter has jumped 38 percent at Rs. 37.36 crores. The Quarterly revenues of the company at Rs. 398.17 crores have recorded an impressive growth of 17 percent during the current quarter as compared to quarterly revenues of Rs. 340.13 crores in Q2’FY21 where in it had registered a growth of 57 percent. This is sixth quarter in a row that the company continues on the fast growth trajectory with remarkable gains in the bottom line.
EBITDA for Q2’FY22 at Rs. 44.88 crores is up by 26 per cent Y-o-Y basis whereas Cash Profit (Before Tax) at Rs. 54.00 crores is up by 53 percent in the same period. EBIDTA margin of the company has scaled up 302 bps from 8.26 percent to 11.28 percent in last 2 years with increased focus on high value products and incredible growth of revenue.
With consistent effort on scale and cost reduction and backward integration, profit margin before tax has leaped by 368 bps from 8.09 percent to 11.77 percent in Q2’FY22 as against Q2’FY21 with 70 percent increase in the Profit before tax for the quarter. In last two years profit margins have gone up by almost three folds from 4.27 percent to 11.77 percent in the current quarter of Q2’FY22. Accordingly, in last two years, quarterly profit has improved almost five folds from Rs.9.23 crores in Q2’FY20 to Rs.44.58 crores in Q2’FY’22.
API business registered a revenue growth of 9 per cent in the Q2’FY22 on strength of increase in sales revenues of Montelukast and Atorvastatin and new molecules. Atorvastatin and Fexofenadine exports for the quarter grew by 33 percent and 88 percent respectively. Montelukast domestic revenues has doubled during the current quarter, recording an increase of 109 percent in its Q2 revenues.
Mr. Sushil Suri, Chairman and Managing Director stated, “With massive increase in API demand globally and more particularly with frequent supply disruptions from China, we are putting our expansion plans for API on fast track. We have planned to treble the API capacity from present 310 KL to 1000KL in the coming 24 months at the same site in Baddi (HP) within the same plant and at the additional land adjoining the site for which all approvals are in place. We are very bullish on this expansion to capture this large spurt in demand APIs globally. The new capacities are also required to serve the new generic market opening up in the next 5-7 years”
Domestic Business of the company recorded an impressive growth of 30 per cent in its Q2 FY’22 revenues at Rs. 276.40 crores brought about by tremendous growth in Diagnostics Devices, followed by Formulation’s business, OTC business and API business of the company.
The Shareholders of the company approved the proposal of the company to hive off the Medical Devices business into a separate wholly owned subsidiary company in their last Annual General Meeting held on 28th September 2021. The company is taking the necessary steps to carry out the Medical Devices business into a separate company at the earliest subject to receipt of necessary approvals. I the meanwhile, the company is setting up additional facilities to expand the capacities of medical devices business to cater to growing needs of the devices business.
Point of Care (POC) Medical Devices business has registered a growth of 36 percent in Q2 against corresponding Quarter last year. During this quarter, the share of medical devices business on standalone basis has gone up by 14.4 percent i.e., 31.2 percent in current quarter vis-a-vis 27.3 percent of corresponding quarter of last year. Medical devices market is growing at tremendous pace and is offering incredible opportunities to grow.
With increased demand and better reach company is also expanding market reach and focusing on the brand awareness campaigns. The Company has roped in senior Bollywood star Mr. Boman Irani to promote its Gluco Meters and BP Monitors and is the most appropriate personality for the company range of products showcasing authority and a connect with the common households. Company is also increasing production capacity of pregnancy kits at its Baddi plant in HP and has retained Ms. Kareena Kapoor for this category of products in the trade.
Blood Glucose Meters had huge growth of 45 percent growth at Rs. 83.68 crores. BP Monitors Sales have jumped 44 percent at Rs. 28.62 crores. The company has now an installed base of 6.15 million Gluco meters and has sold over 785 million strips out which 90 million strips are sold during this quarter.
Finished dosage business has also registered a massive revenue growth of 28 percent during the Quarter by recording revenues of Rs. 44.98 crores in Q2 as against Rs. 35.17 crores achieved in same quarter last year.
Dr. Morepen OTC and Grooming range of products are continuously recording strong progress, with Q2 revenues at Rs. 28.18 crores, a growth of 22 percent on Y-o-Y basis. OTC products with Q2 revenues of Rs. 16.13 crores has recorded a growth of 40 percent during the Q2’FY22.The Grooming business with its Q2 revenue of Rs. 6.11 crores has registered a growth of 64 percent in same quarter. During the quarter the company launched more than 30 products exclusively for online markets which has received tremendous response and the overall online sales have gone up by 243 percent in Q2’FY22 as compared to same quarter last year.
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