Balaxi Pharmaceuticals Limited Q1 FY23 Result Updates.
Strong performance backed by higher revenue and margins.
Balaxi Pharmaceuticals reported a net profit of Rs 14.15 crores, up by 32.1% from Rs. 10.71 crores in June 2021, on the back of strong performance of revenue and higher margins. The net profit margin for the quarter is 17.1%, down by 127 bps.
The strong growth in revenue of Rs. 82.78 crores, up by 41.9% YoY in Q1FY23 from Rs. 58.34 crores in Q1 FY22, driven by the Pharmaceuticals business, with the LATAM share increasing to 38% and strong volume contribution from Latin American markets. The company also derived translation benefits from a strong currency in Angola.
Earnings before interest, tax, depreciation, and amortization (EBITDA) of Rs 17.03 crores were recorded in Q1 FY23, registering 35.6% growth YoY, despite the cost structures in new geographies incurred ahead of commercial launches in these countries. The EBITDA margin stood at 20.6%, down by 95 bps.
Growing Latin American business to strengthen margins.
Gross profit stood at Rs. 34.52 crores from Rs. 16.8 crores, up by 105.5% YoY. The gross margin stood at 41.7%, up by 1290 bps. Gross margin expanded significantly, based on the strength of the growing Latin American business and increased contribution from branded products at 35% in Q1. In Latin America, product margins are intrinsically higher, especially for value-added, branded portfolios, a clear area of focus for Balaxi.
The company’s operating cost structure – both people and organizational costs – has increased substantially with the entry into several new markets. This includes establishment and product registration expenses in countries that are not contributing to sales at present. Going forward, as the business scales up, we expect a positive contribution to revenue growth as well as geographical diversification. Balaxi Pharmaceuticals reports continued solid growth in Q1 FY23.
The shares of Balaxi Pharmaceuticals Limited are trading at Rs. 440.75, up by 0.55%.
Valuations:
The return on equity (ROE) is 53.5% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 8.62. The company’s return on capital employed (ROCE) is 9.6%. The price to book value of Balaxi Pharmaceuticals Limited is 3.88. The EV/EBITDA is 7.33. EPS for the quarter is Rs. 51.1.
