Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marksans Pharma Ltd (BOM:524404, Financial) reported a strong revenue growth of 20.8% year-on-year for Q2 FY25, driven by robust performance in the US, Australia, and New Zealand markets.
- The US market saw a significant increase in revenue by 36.8% year-on-year, attributed to new product launches and increased market share.
- Gross margin expanded by 732 basis points to 59.7% in Q2 FY25, due to a better product mix and reduced raw material prices.
- The company achieved an all-time high quarterly EBITDA of INR 135.7 crores, marking a 19.1% increase year-on-year.
- Marksans Pharma Ltd (BOM:524404) remains debt-free with a cash balance of INR 657 crores as of September 30, 2024, indicating strong financial health.
Negative Points
- The UK and Europe markets experienced a relatively soft quarter due to seasonality, impacting overall growth in these regions.
- Capacity utilization at the Teva facility is currently at 40%, indicating underutilization of resources.
- Freight costs increased significantly, impacting overall expenses, with costs rising from $6,000 to $12,500, although they have recently improved.
- The company faces challenges in finding suitable merger and acquisition targets, with high valuations being a deterrent.
- Inventory levels have increased due to new product launches, which may affect cash flow until these products translate into sales.
Q & A Highlights
Q: What is the current capacity utilization of the Teva facility and its revenue contribution this quarter?
A: The capacity utilization is around 40%, and the revenue contribution from the Teva facility this quarter is approximately 100 crores. - CEO
Q: Can you provide details on the new product launches in the US that contributed to the growth?
A: The growth in the US was driven by new product launches across all three segments: pain, cough and cold, and gastrointestinal. We have gained significant market share and launched several new products. - CEO
Q: How are raw material prices affecting your gross margins, and what is the outlook for the coming quarters?
A: The gross margin improvement is largely due to a transition from high-cost materials to lower-cost materials. Raw material prices have stabilized but remain improved from historical highs. - CEO
Q: Is there any update on mergers and acquisitions?
A: Currently, there are no mergers and acquisitions on the table. We are always looking for value-accretive opportunities but have not found any suitable targets recently. - CEO
Q: What is the outlook for the UK and Europe markets, and how do you see them contributing to future growth?
A: The UK market is expected to pick up in the third quarter due to seasonality. We aim to be among the top three companies in the UK within the next 2 to 3 years, and it remains a significant part of our growth strategy. - CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
