InvestorQ : How did you find the September 2021 quarter results of the two pharma companies viz. Divi’s Labs and Suven Pharma?
swati Bakhda made post

How did you find the September 2021 quarter results of the two pharma companies viz. Divi’s Labs and Suven Pharma?

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Sam Eswaran answered.
3 weeks ago
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Let me start with Divi’s first. For the Sep-21 quarter, Divi’s Labs reported 13.6% growth in sales at Rs.1,988 crore. Divi’s is a leading global manufacturer of active pharma ingredients, intermediates and nutraceutical ingredients; which are the key inputs that go into the manufacture of formulations. For H1 to Sep-21 sales were up 13.4% at Rs.3,948 crore.

For the Sep-21 quarter, Divi’s reported net profits up 16.7% at Rs.607 crore. The company benefited from inventory efficiency gains which substantially offset the increase in raw material costs by 62.6% to a whopping Rs.877 crore. Net margins at 30.51% in Sep-21 quarter was higher than 29.7% in Sep-20 quarter and 28.41% in Jun-21 quarter.

Let me now turn to the other Hyderabad based pharma company, Suven Pharma. It posted 26.8% higher sales for the Sep-21 quarter at Rs.301 crore. Suven specializes in the high margin business of contract development and manufacturing operations or CDMO as it is better known. Supply to global markets was constrained in the quarter due to supply chain bottlenecks, higher input costs and availability of shipping vessels.

For the Sep-21 quarter, Suven Pharma posted 30.9% higher net profits at Rs.97 crore. While raw material costs spiked 54% to Rs.118 crore, inventory efficiency gains helped them reduce the capital tied down in the working capital cycle. Suven posted 587 bps improvement in EBITDA margins at 47.19%. Net margins at 32.22% in Sep-21 quarter was higher than 31.21% in Sep-20 quarter.

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