Granules Q2 net profit dips 51%
Hyderabad: Hyderabad-based pharmaceuticals company Granules India reported a 51 per cent dip in its net profit to Rs 81 crore for the second quarter ended September 30, 2021 as against Rs 164 crore in the corresponding period of the last fiscal. The company’s net income witnessed a marginal increase of four per cent to Rs […]
Hyderabad: Hyderabad-based pharmaceuticals company Granules India reported a 51 per cent dip in its net profit to Rs 81 crore for the second quarter ended September 30, 2021 as against Rs 164 crore in the corresponding period of the last fiscal.
The company’s net income witnessed a marginal increase of four per cent to Rs 888 crore in the quarter under review as against Rs 858 crore in the corresponding period.
Granules said its Q2 business was unfavourably impacted due to difficulties in procuring raw materials, mainly from China due to dual energy policy and increased procurement prices for almost all items due to interruptions in supply of materials and increased logistics costs arising out of vessel shortage and port congestion in various parts of the world.
Gross margin percentage drop from 57.9 per cent to 50.9 per cent was on account of reduction in margins of all major products especially paracetamol due to increase in key starting material prices and increased logistics cost. Price pressure in the USA has also resulted in marginal drop in gross margin for core products. The entire loss of gross margin for the current quarter was mainly absorbed by Granules.
Pharmaceutical formulation intermediates segment grew 10 per cent year-on-year (YoY), finished dosage grew 18 per cent YoY and active pharmaceutical ingredients (API) segment decreased by 25 per cent YoY mainly due to paracetamol KSM supply disruption.
Commenting on the results, Dr Krishna Prasad Chigurupati, CMD of Granules India said, “The last quarter was one of the most challenging quarters that we have witnessed in the recent past. We were unable to pass on our cost increases to our customers.”
Based on ongoing discussions with customers, the company said it is confident of passing on its price increases substantially from Q3FY22 onwards. The company expects that its gross margins will see a recovery and its performance for the rest of the fiscal will be substantially better.
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