InvestorQ : I hold shares of Granules India and wanted to understand why profits fell during the quarter despite higher sales?
Arya Nanda made post

I hold shares of Granules India and wanted to understand why profits fell during the quarter despite higher sales?

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Anjana Aiyar answered.
2 months ago
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Hyderabad based Granules India reported 28.9% growth in revenues for Q4FY22 at Rs1,030 crore on a consolidated basis. FY22 full year revenues were up 16.3% at Rs3,765 crore. The sales growth was triggered by higher selling price realizations in paracetamol and other new US launches. Granules recorded all round growth in revenues across active pharma ingredients (APIs), pharma formulation intermediates (PFIs) and finished dosages (FD). In fact, share of PFIs and other molecules in the overall sales mix increased during Q4FY22.

Granules India

Rs in Crore

Mar-22

Mar-21

YOY

Dec-21

QOQ

Total Income (Rs cr)

₹ 1,029.97

₹ 799.31

28.86%

₹ 996.77

3.33%

Net Profit (Rs cr)

₹ 111.00

₹ 127.57

-12.99%

₹ 100.88

10.03%

Diluted EPS (Rs)

₹ 4.46

₹ 5.13

₹ 4.05

Net Margins

10.78%

15.96%

10.12%

Net profit for Q4FY22 fell -13% to Rs111 crore. The main reason for the fall in profits was the spike in cost in KSM and solvents. In addition, the US markets also faced pricing pressure. EBITDA margins fell sharply from 26.4% to 19.3%. Net margins were 10.78% in Q4FY22 quarter against 15.96% in Q4FY21. There was good news too. Regulated markets now contribute 73% to sales while share of finished dosages (FD) spiked from 40% to 52%.
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