ICICI Securities: Shilpa Medicare Delivers Strong Q1 Performance; Margin Surprises Positively
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ICICI Securities Report
Shilpa Medicare Ltd. reported Q1 FY21 results better than our estimates with margin beat of 600 basis points.
Revenue grew 38.4% YoY to Rs 2.2 billion (our estimate Rs 2.3 billion) and Ebitda margin improved 1,160/880 basis points YoY/QoQ to 29.5% (our estimate 23.5%) driven by higher gross margin and controlled general and administrative expenses.
Both active pharmaceutical ingredients and formulations performed well. The management’s focus is clearly on building high value businesses as it focuses on strengthening the oncology pipeline for regulated markets and foray into biosimilars, transdermals, etc.
Further, formulations revenue of approximately Rs 2 billion in FY20 from just six products indicates revenue per product of approximately $6 million, better than most peers. We believe any success in biosimilars or transdermals may provide meaningful upside.
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