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Elevated freight costs due to Red Sea disruption
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Ajanta Pharma Limited — Q2 FY25
Ajanta Pharma delivered a solid Q2 FY25 with revenue of INR 1,187 crore (+15% YoY), driven by strong branded generics growth of 20% (Asia +28%, Africa +35%).
bullish
high
Financial stats pending filing verification
2-Minute Summary
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Ajanta Pharma delivered a solid Q2 FY25 with revenue of INR 1,187 crore (+15% YoY), driven by strong branded generics growth of 20% (Asia +28%, Africa +35%). EBITDA margin came in at 26% (28% excluding forex loss), with PAT at INR 216 crore (+11% YoY). The India business grew 9%, outpacing IPM by 190 bps, supported by volume growth and MR additions. Management maintained full-year guidance: branded generics mid-teens growth, US mid-single digits, and EBITDA margin around 28% ±1%. Key risks include elevated freight costs from Red Sea disruptions and unpredictable institutional business in Africa. Overall, execution remains strong with improving working capital and cash conversion of 121%.
अजंता फार्मा ने दूसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कमाई 1,187 करोड़ रुपये रही, जो पिछले साल से 15% ज्यादा है। ब्रांडेड जेनेरिक दवाओं की बिक्री 20% बढ़ी, खासकर एशिया (28%) और अफ्रीका (35%) में। कंपनी का मुनाफा 216 करोड़ रुपये रहा, जो 11% ज्यादा है। भारत में कारोबार 9% बढ़ा, जो बाजार की तुलना में बेहतर है। कंपनी ने पूरे साल के लिए अनुमान दोहराया: ब्रांडेड जेनेरिक में 15% तक, अमेरिका में 5% तक बढ़ोतरी, और मुनाफा मार्जिन 28% के आसपास रहेगा। मुख्य जोखिम लाल सागर के रास्ते बढ़ी ढुलाई लागत और अफ्रीका में अनिश्चित संस्थागत कारोबार हैं। कुल मिलाकर, कंपनी का प्रदर्शन मजबूत है और नकदी प्रवाह 121% है।
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Read Transcript →Quarter Snapshot
Branded Generics Growth
20%
+20% YoY
Branded generics revenue grew 20% YoY to INR 894 crore, driven by Asia (+28%) and Africa (+35%).
India Business Growth vs IPM
9.6%
+190bps vs IPM
India business grew 9.6% vs IPM growth of 7.7% (IQVIA MAT Sep 2024), driven by volume growth 1.5x IPM.
Cash Conversion Ratio
121%
+121%
H1 FY25 cash conversion ratio of 121% reflects strong working capital improvement, with receivables down to 81 days.
MR Addition in India
200
+200 in Q2
Added 200 medical representatives in Q2, taking total to 3,200+, to strengthen coverage in existing therapies.
What Changed vs Last Quarter
NEW
Branded generics mid-teens growth for FY25
Management expects branded generics (India, Asia, Africa) to grow in mid-teens for the full year, with Asia and Africa growth moderating in H2.
NEW
US generics mid-single digit growth for FY25
US generics expected to grow in mid-single digits, with most launches in Q4; 4 ANDA launches planned in H2.
UPDATED
EBITDA margin around 28% ±1% for FY25
Full-year EBITDA margin guided at 28% plus/minus 1%, with quarterly variations due to product mix and forex.
UPDATED
CapEx of INR 200 crore for FY25
Capital expenditure for FY25 estimated at INR 200 crore, including maintenance CapEx; INR 130 crore spent in H1.
DROPPED
FY25 revenue growth in low teens
Overall revenue expected to grow in low teens, with branded generics mid-teens, US mid-single digit, and Africa institutional degrowth.
DROPPED
US ANDA filings of 8-12 in FY25
Target to file 8-12 ANDAs in the current fiscal year, with launches skewed towards Q3 and Q4.
NEW RISK
Elevated freight costs due to Red Sea disruption
Freight costs remain elevated due to Red Sea crisis, with an annual burden of ~INR 30 crore impacting other expenses.
NEW RISK
Potential margin pressure from SG&A ramp-up
Analyst raised concern about elevated other expenses; management attributed to SG&A ramp-up and one-time gratuity charge, but H2 expenses expected in line with H1.
NEW RISK
Price erosion in US generics
US generics growth remains muted at 2% in H1, with limited launches; pricing pressure and competitive landscape could impact future growth.
RISK GONE
Freight cost headwind of INR 30 crore
Management expects an adverse impact of INR 30 crore in freight costs for FY25 compared to FY24, assuming current rates persist.
RISK GONE
US price erosion in high single digits
US generic price erosion remains stable but at high single digits, which could pressure margins if competition intensifies.
RISK GONE
Employee cost one-time charge normalization
Q1 employee costs included a one-time INR 30 crore gratuity policy change; while normalized in subsequent quarters, it highlights potential for future policy-driven cost increases.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY24, Q3 FY24
Overall revenue expected to grow in low teens, with branded generics mid-teens, US mid-single digit, and Africa institutional degrowth.
Mentioned in Q1 FY24, Q2 FY24
Chantix launch is delayed to Q4 FY24 or Q1 FY25; any further delay could impact US revenue expectations.
Mentioned in Q3 FY24, Q4 FY24
India branded generics are expected to grow 200-300 bps faster than IPM (forecast ~8%), implying 10-11% growth.
Mentioned in Q3 FY24, Q4 FY24
Increased transit times and freight costs due to Red Sea crisis could add ~INR 30 crore to expenses, potentially pressuring margins.
Fast read
Guidance and risk preview
Management expects branded generics (India, Asia, Africa) to grow in mid-teens for the full year, with Asia and Africa growth moderating in H2.
Freight costs remain elevated due to Red Sea crisis, with an annual burden of ~INR 30 crore impacting other expenses.
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