Dishman Carbogen Amcis reported 15.5% yoy decline in Q4FY18 revenue to Rs451.5cr. EBITDA in Q4FY18 declined by 17.4% yoy to Rs121.1cr. EBITDA margin stood at 26.8% in Q4FY18 vs. 26.4% in Q3FY18 and 27.5% in Q4FY17. Aided by lower tax outgo, PAT grew by 19.5% yoy to Rs51.1cr in Q4FY18.
The company has reported decline in revenue from both CRAMS and other business. CRAMS revenue declined by 4.2% yoy and other revenue declined by 14.8% yoy in Q4FY18.
CRAMS contributed 74.6% of the total revenue, while rest 25.4% came from other business.
EBIT margins of CRAMS segment declined by 504bps yoy to 16.4%.
The tax expenses stood at Rs23.7cr in Q4FY18 vs. Rs40.1cr in Q4FY17. The effective tax rate was at 31.7% in Q4FY18 vs. 48.4% in Q4FY17.
Material cost as % of sales increased by 146bps, while employee cost as % of sales increased by 488bps in Q4FY18. This was partially offset by 571bps yoy decline in the other expenses as % of sales in Q4FY18.
Old clients are now returning to Dishman, previously these clinets had moved to China.
Company expects FY19E revenue growth to be ~7% and expects EBITDA margins to be close to what it reported in FY18.
Vitamin-D business has seen decline due to the company’s deliberate effort to reduce low margin cholesterol business.
Management has said that demand for legacy product is still stable, but not growing. This business has strong margins.
The management has said that the pharma industry is undergoing a consolidation phase in the US and Europe.
During Q4FY18, effective tax rate was lower due to the deferred tax reversal.
Average dollar realization in Q4FY18 was Rs64.4 vs. Rs67 in Q4FY17.
Company has guided FY19E capex to be ~Rs200cr.
Company has said that the small biotech industry is the main innovator of the pharma industry and money going in the small biotech funding is a main trigger for its business.
Dishman Carbogen Amcis Ltd ended at Rs. 351.70, up by 11.15 points or 3.27% from its previous closing of Rs. 340.55 on the BSE.
The scrip opened at Rs. 339.40 and touched a high and low of Rs. 352.50 and Rs. 332.30 respectively. A total of 1,04,452 (NSE+BSE) shares were traded on the counter. The stock traded below its 100 DMA.
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