Indoco Remedies zooms 20% on strong revenue from international business

Shares of Indco Remedies zoomed 20 per cent to Rs 405 on the BSE in intra-day trade on Wednesday on the back of huge volumes after the pharmaceutical company reported a strong revenue growth from its international business in the March quarter (Q4FY21).

The stock surpassed its previous high of Rs 377.15, touched on May 6, 2021. It was trading close to its record high level of Rs 413, hit on May 25, 2015. The counter has seen huge trading volumes with a combined 3.9 million equity shares changing hands on the NSE and BSE. An average sub 400,000 shares were traded in the past two weeks, the exchange data shows.

During the fourth quarter of FY 2020‐21, Indoco Remedies' revenue grew by 12 per cent at Rs 305 crore, as against Rs 272 crore reported in the same quarter last year. The company’s export formulations grew 65.6 per cent year on year (YoY) to Rs 132 crore, driven by strong growth in regulated and emerging markets. Domestic formulations de-grew 13 per cent YoY to Rs 139 crore due to continued impact on antiinfective and respiratory segment.

Ebitda (earnings before interest, taxes, depreciation, and amortisation) jumped 63.7 per cent YoY to Rs 54.6 crore from Rs 33.3 crore in a year ago quarter. The Ebitda margins expanded 569 basis points YoY to 17.9 per cent on account of lower staff, travel & promotional spend partly offset by decline in gross margin performance.

Indoco has nine domestic marketing divisions with a strong brand portfolio in various therapeutic segments including Gastro‐intestinal, Respiratory, Anti‐Infective, Stomatologicals, Ophthalmic, Nutritionals,   Cardiovascular, Anti‐Diabetics, Pain Management   etc. Top Indoco brands include Cyclopam, Febrex Plus, Sensodent‐K, Karvol Plus, ATM, Oxipod, Cital, Sensoform, Sensodent‐KF, Cloben‐G, Glychek, Kidodent, Carmicide, Rexidin, MCBM, Methycal, etc. On the international front, Indoco has tie‐ups with large generic companies across the globe.

“After going through rough patches in FY18- 20, where Indoco faced headwinds on the domestic front (structural issues, pandemic) and exports front (regulatory setbacks), the situation is returning to normalcy. Indoco is expected to post strong FY22 topline growth as domestic sales normalise and grow amid opportunities arising out of post-Covid complications. Export formulations are also expected to post robust growth on the back of strong pipeline and visible launch schedule. Additionally, the management expects 80-90 bps margin improvement in FY22 to around 19 per cent. With better visibility, we expect the company to maintain consistency and generate strong free cash flow (FCF),” ICICI Securities said in a note.

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