Morepen records 70 per cent increase in profit before tax in Q2; consolidated revenue grows by 17 per cent

Morepen Laboratories has reported another quarterly earnings with a stellar performance in Q2’FY22 with a growth of 70 per cent in its consolidated profits (before tax) at Rs 46.86 crores. Profit After Tax (PAT) for the quarter has jumped 38 per cent at Rs 37.36 crores. The quarterly revenues of the company at Rs 398.17 crores have recorded an impressive growth of 17 per cent during the current quarter as compared to quarterly revenues of Rs 340.13 crores in Q2’FY21 wherein it had registered a growth of 57 per cent. This is the sixth quarter in a row that the company continues on the fast growth trajectory with remarkable gains in the bottom line, according to a company statement.

The statement also said that EBITDA for Q2’FY22 at Rs 44.88 crores is up by 26 per cent Y-o-Y basis whereas cash profit (before tax) at Rs 54 crores is up by 53 per cent in the same period. EBIDTA margin of the company has scaled up 302 bps from 8.26 per cent to 11.28 per cent in the last two years with an increased focus on high-value products and incredible growth of revenue.

It added that with consistent effort on scale and cost reduction and backward integration, profit margin before tax has leaped by 368 bps from 8.09 per cent to 11.77 per cent in Q2FY22 as against Q2FY21 with 70 per cent increase in the profit before tax for the quarter. In the last two years, profit margins have gone up by almost three folds from 4.27 per cent to 11.77 per cent in the current quarter of Q2FY22. Accordingly, in the last two years, quarterly profit has improved almost five folds from Rs 9.23 crores in Q2FY20 to Rs 44.58 crores in Q2FY22.

API business registered a revenue growth of nine per cent in the Q2FY22 on strength of increase in sales revenues of Montelukast and Atorvastatin and new molecules. Atorvastatin and Fexofenadine exports for the quarter grew by 33 per cent and 88 per cent, respectively. Montelukast domestic revenues has doubled during the current quarter, recording an increase of 109 per cent in its Q2 revenues, the statement notified.

Sushil Suri, Chairman and Managing Director, stated, “With massive increase in API demand globally and more particularly with frequent supply disruptions from China, we are putting our expansion plans for API on fast track. We have planned to treble the API capacity from present 310 KL to 1000KL in the coming 24 months at the same site in Baddi (HP) within the same plant and at the additional land adjoining the site for which all approvals are in place. We are bullish on this expansion to capture this large spurt in demand APIs globally. The new capacities are also required to serve the new generic market opening up in the next five-to-seven years.”

The domestic business of the company recorded an impressive growth of 30 per cent in its Q2 FY22 revenues at Rs 276.40 crores brought about by tremendous growth in diagnostics devices, followed by formulation’s business, OTC business and API business of the company, the statement further added.

The shareholders of the company approved the proposal of the company to hive off the medical devices business into a separate wholly-owned subsidiary company in their last Annual General Meeting held on 28th September, 2021. The company is taking the necessary steps to carry out the medical devices business into a separate company at the earliest subject to receipt of necessary approvals. In the meanwhile, the company is setting up additional facilities to expand the capacities of medical devices business to cater to the growing needs of the devices business, it added.

It said that the Point of Care (POC) medical devices business has registered a growth of 36 per cent in Q2 against corresponding quarter last year. During this quarter, the share of medical devices business on standalone basis has gone up by 14.4 per cent i.e., 31.2 per cent in the current quarter vis-a-vis 27.3 per cent of the corresponding quarter of the last year. The medical devices market is growing at a tremendous pace and is offering incredible opportunities to grow.

The statement also notified that its blood glucose meters had a huge growth of 45 per cent at Rs 83.68 crores. BP monitors’ sales have jumped 44 per cent at Rs 28.62 crores. The finished dosage business has also registered a massive revenue growth of 28 per cent during the quarter by recording revenues of Rs 44.98 crores in Q2 as against Rs 35.17 crores achieved in the same quarter last year.