Gross profit for Q4FY18 declined by 17.3% yoy to $118.9mn. Gross margin declined by 535bps yoy to 67.9% in Q4FY18 reflecting the pricing pressure despite the volume growth.
Operating profit for the quarter declined by 26.5% yoy to $74.8mn. Operating margins declined by 909bps yoy to 42.7%. R&D cost grew by 2.2% yoy to $20.3mn. As % of sales, R&D cost was at 11.6% in Q4FY18 vs. 10.1% in Q4FY17. Selling, marketing, general and administrative expenses increased by 7.1% yoy to $23.8mn.
During Q4FY18, company reported forex income of $16.0mn vs. forex expense of $5.8mn. Adjusted for this, company at the PAT level reported 23.5% yoy decline to $81.2mn in Q4FY18. Tax expense decreased 38.2% yoy to $10.7mn resulting in an effective tax rate of 11% in Q4FY18 vs. 17.3% in Q4FY17.
Due to the forex income and lower tax expenses, Taro’s profit after tax grew by 4.2% to $86.5mn.
Taro’s sales in the Q3FY18 had declined by 29.5% yoy while gross margin had declined by 973bps yoy to 66.2%. The Q4FY18 result highlights a smaller decline in sales and gross margins.
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