J B Chemicals and Pharmaceuticals Limited Q1 FY23 Result Updates.
Higher treasury income and other costs hamper net profit.
JB Pharma reported a net profit of Rs. 105 crores, fell by 12% YoY from Rs. 119 crores on account of higher treasury income in Q1 FY22, non-cash ESOP cost, depreciation on account of acquired brands, and finance costs in Q1 FY23
The revenue stood at Rs. 784 crores for the June quarter, up by 30% YoY from Rs. 606 crores in June 2021.
The earnings before interest, tax, depreciation, and amortization stood at Rs. 173 crores as compared to Rs. 164 crores, up by 6% YoY.
The profit before tax stood at Rs. 142 crores from Rs. 158 crores, slipped by 10% YoY.
Operating EBITDA grew by 16% to Rs. 190 crores. Gross margins were at 62.7% v/s 64.2%. Excluding Azmarda, gross margins for the business were relatively flat YoY. Overall material cost continues to remain challenging whilst softening was seen in certain packing material. Excluding non-cash ESOP cost, employee cost increased by 19% due to increments and manpower costs for acquired brands. Non-cash ESOP cost as a percentage of reported EBITDA was at 10%as compared to 20% of reported EBITDA in Q4 FY22.
Other expenses increased on account of normalization of marketing expenses as compared to Q1 FY22 and a significant increase in fuel costs, freight expenses, and logistics costs for the exports business on a YOY basis, whilst sequentially some softening was seen in international freight.
Depreciation increased by 44% to INR 26 crores on account of the amortization of the acquired brands.
Robust revenue growth despite a challenging operating environment.
JB recorded robust revenue growth at 30% despite a challenging operating environment. Organic revenue growth was around 20%. The domestic Formulation business continued its strong performance growing at 34% to INR 418 cr. Organic revenue growth was around mid-teens. International business revenue grew by 28% to Rs. 366 crores. All the three businesses viz. Exports formulations, CMO, and API business performed well in the quarter.
During the quarter, the international business recorded robust revenue growth of 28% to Rs. 366 crores. Exports formulations, CMO, and API business recorded growth of 11%, 108%, and 17% respectively. South Africa unit registered growth in both public & private markets; robust tender demand; new launches in the private market. Russia local sales remained steady; Receivables looked positive from the region. CMO revenue crossed Rs. 100 crores for the first time in a quarter due to a strong surge in account demand for lozenges and liquids from key partners. The order book continues to remain robust.
Domestic business records highest ever sales in a quarter of Rs. 418 crores registering growth of 34%. Organic revenue from the domestic business grew around the mid-teens out-pacing industry growth rate. JB continues to remain the fastest growing company among the top 25as per IQVIA MAT June 22 data. As per MAT June 22 data, JB ranks 23rd as compared to 25thin Q4 FY22. The acquired brands from Sanzyme performed well with Sporlac gaining market share during the quarter.
The shares of J B Chemicals and Pharmaceuticals Limited closed at Rs. 1861.40, up by 0.46%.
Valuations:
The return on equity (ROE) is 18.1% for June 2022. The price-to-earning (P/E) ratio stood at 38.7. The return on capital employed (ROCE) for the company is 28.4%. The price to book value of J B Chemicals and Pharmaceuticals Limited is 6.72. The EV/EBITDA is 24.8. EPS for the quarter is Rs. 48.1.
