Granules India, a Rs.650 crore plus pharma company from Hyderabad, has received a setback during the third quarter ended December 2012 and its consolidated net profit declined sharply by 27.3 per cent to Rs.5.81 crore from Rs.7.99 crore in the corresponding period of last year. Its EBDITA also moved down by 11.5 per cent to Rs.18.99 crore from Rs.21.46 crore. EPS for the quarter worked out to Rs.2.80 as against Rs.3.98 in the last period.
The company's net sales improved by 5.1 per cent to Rs.196.22 crore from Rs.186.72 crore in the similar period of last year. The sales growth was restrained due to formulation capacity constraints which Granules anticipates will ease over the next several months as its formulation expansion comes fully on stream. Profitability margins were temporarily depressed because Granules was incurring the full cost of running its new capacity although it was not producing substantial volumes.
Krishna Prasad, managing director, said, “We have been particularly excited about our formulation expansion due its state-of-the-art technology because it reiterates our vision of being the global leader in pharmaceutical manufacturing by process innovation and unparalleled efficiencies. Our formulation expansion will extend our lead as the premier PFI manufacturer and as one of the most efficient finished dosage manufacturers in the world.”
Due to the new innovative process, we faced challenges in ramping up our capacity during the quarter. The issues are being resolved and we expect to attain our target run rate during the first quarter of fiscal year 2014. Although we faced setbacks that pushed our original time lines, our long-term story is still in place. We have a strong back order position and have been receiving positive feedback from customers about increasing formulation orders. We anticipate healthy capacity utilisation once the facility is running as per our expectations, he added.
For the nine months period ended December 2012, Granule's net sales improved by 20.2 per cent to Rs.559.99 crore from Rs.465.88 crore in the same period of last year. Its net profit also taken a jump of 48.5 per cent to Rs.20.15 crore from Rs.13.57 crore. Thus, the EPS worked out to Rs.10.04 as against Rs.8.77 in the last period.