JB Chemicals and Pharmaceuticals reports revenue growth of 10 per cent to Rs 601 crores in Q3 FY22

JB Chemicals and Pharmaceuticals has announced its financial results for the third quarter ended 31st December, 2021. For the third quarter ended 31st December, 2021, the company recorded revenue of Rs 601 crores as compared to Rs 548 crores, registering a growth of 10 per cent over the corresponding quarter of the previous financial year, a company statement said.

It also noted that the underlying revenue growth for Q3 FY22 was 23 per cent (after excluding revenue deferred to Q3 FY21 from Q2 FY21); operating EBITDA decreased by 10.5 per cent to Rs 153 crores as compared to Rs 171 crores and profit after tax stood at Rs 84 crores as compared to Rs 154 crores attributed to one off income due to trademark sale in Q3 FY21 (~ Rs 34 crores), higher treasury income in Q3 FY21, revenue deferment to Q3 FY21 and non-cash ESOP charge in Q3 FY22.

Commenting on financial results, Nikhil Chopra, CEO and Wholetime Director, JB Chemicals and Pharmaceuticals, said in the statement,” Our performance in the third quarter reflects a strong business momentum in a macroeconomic environment that has continued to be challenging. Revenue growth in India saw positive traction from our renewed Go-To-Market model and product introductions resulting in JB maintaining its position as the fastest-growing company among the top-30 in the industry. Further, major parts of our international business, including CMO, witnessed gradual demand revival. Our margins reflect the significant increase in raw materials costs and persistent supply chain-related challenges. Going forward, we will maintain focus on driving topline growth, cost optimisation and organisational efficiencies.”

He further added, “We see multiple levers for outperformance – leveraging our existing Go-To-Market model strength; maximising new introductions and lifecycle management opportunities and strengthening our international markets through portfolio augmentation. The acquisition of the brand portfolio from Sanzyme will further strengthen our domestic business and improve our market position. All these initiatives should translate into enhanced long-term value for all our stakeholders.”

Further, the statement mentioned that for the nine months of the financial year 2021-22, the company recorded revenue of Rs 1,800 crores as compared to Rs 1,514 crores, registering a growth of 19 per cent. Operating EBITDA increased by five per cent to Rs 457 crores as compared to Rs 437 crores. Adjusted EBITDA increased by eight per cent to Rs 471 crores. Profit after tax stood at Rs 301 crores as compared to Rs 348 crores registering a decline of 13 per cent.

Apart from it, the statement mentioned the key highlights that are as follows:

Financial Highlights

• · Despite the challenging operating environment, revenue momentum remained strong in the third quarter
  • Excluding the revenue which got deferred to Q3 FY21 from Q2 FY21 in the previous financial year, the sales growth for Q3 FY22 was 23 per cent
  • Significant inflation witnessed in API prices, managed through cost optimisation initiatives and price increases
  • Gross Margin profile remains steady at 66 per cent in Q3 FY22
• Operating costs are now at normalised levels
• Excluding ESOP charge, employee benefit expense increased by 11 per cent
• Other expenditure witnessed sharp increase in Q3 FY22 led by
  • significant escalation in logistics/freight costs
  • substantial increase in power and fuel costs

Domestic business

• Domestic formulations business continues its good performance growing at 20 per cent in Q3 FY22 vs Q3 FY21
• As per IQVIA, JB was the fastest growing company among the top 30 companies for CY 2021
  • MAT Dec 2021: JB grew at 27 per cent vs market growth of 18 per cent
• Re-aligned Go-To-Market model continues to deliver positive results w.r.t. productivity improvement and new introductions
• New products contributed 4.2 per cent to domestic sales in Q3 FY22 and four per cent for 9M FY22
  • During Q3 FY22, domestic formulations business launched 12 new products including Molnupiravir, Cilacar TM, Azovas-T and Pirfenidone

• Cost pressure persists on raw material and packing material, this is expected to continue in the medium-term

International business

• International business revenue grew at three per cent in Q3 FY22 vs Q3 FY21
  • Sequential improvement in international business
  • Underlying growth for Q3 FY22 is higher than the reported number due to deferment of revenues from Q2 FY21 to Q3 FY21

• International business witnessed steady revival except for the US business
  • South Africa continues to record growth in both public and private markets
  • Russia/CIS region delivered strong growth for Q3 FY 22
  • CMO business performed well due to demand revival in key markets

• Supply chain disruptions and higher freight costs remains a challenge
  • Freight costs increased significantly for all key markets