Morepen Labs boards the growth ladder with the peer group in the healthcare and pharmaceutical sector

Morepen Laboratories Ltd.

Morepen Laboratories Limited has reported yet another growth-filled quarter by registering 107 percent rise in its net profit in Q3 of FY 2017-18 at INR 9.67 crore despite a marginal rise in its net sales revenue at INR 139.87 crore, vis-a-vis corresponding quarter of the previous fiscal. The Q3 FY 2017-18 financial results were taken on record at a meeting of the company’s board of directors here on Monday.

Domestic sales were up by 24.8 percent at Rs. 103.29 crore in Q3 FY 2017-18, whereas exports were lower at INR 36.58 crore. EBIDTA during the quarter grew by over 18% at INR. 18.17 crore. The company did well in controlling its interest cost in the quarter. The interest cost in Q3 FY 2017-18 amounted to just INR 90 lakhs, registering a fall of 60 percent compared to corresponding quarter of the previous fiscal. As a result, the cash profit during the period rose by 32 percent at INR 17.27 crore. The overall depreciation and amortisation charge was also lower by around 10 percent at INR 7.60 crore during the same period.

In the bulk drugs category, Montelukast recorded highest growth of 25 percent in its sales numbers at INR 22.37 crore followed by Atorvastatin, which registered a handsome growth of 23 percent in Q3 FY 2017-18 sales at INR 15.82 crore vis-a-vis corresponding quarter in the previous fiscal. The overall API business sales remained stable at around INR 80 crore in Q3 FY 2017-18 over Q3 last year. The Home Diagnostic category did extremely well with an overall growth of 53 percent in Q3 sales in FY 2017-18 at around INR 28 crore. Within the Home Diagnostic category, Blood Pressure Monitors’ sales went up by 99 percent and that of Blood Glucose Monitors by 61 percent in Q3 FY 2017-18. The Formulations segment registered a revenue drop of five percent in Q3 FY 2017-18 compared to corresponding quarter in the previous fiscal.

Mr. Sushil Suri, CMD Morepen Laboratories Ltd.
Mr. Sushil Suri, CMD Morepen Laboratories Ltd.

Speaking on the Q3 results, Mr. Sushil Suri, Chairman and Managing Director, Morepen Laboratories Ltd. said, “During the quarter, the focus was on high value drugs, cost reduction and improving margins, The growth in Montelukast and Atorvastatin business in Q3 FY 2017-18 has helped the API business to make up for fall in sales revenues recorded by other products in this category. We are working on consolidation of our product portfolio so as to remain focused on high value APIs and also expand Self Health brand Dr. Morepen which is consistently registering phenomenal growth across all the product segments.”

In the Nine Months ended December 31, 2017, the company has reported a rise of 38 percent in its net profit at INR 22 crore on net sales of INR 397 crore. The domestic sales revenue during the nine-month period grew by around 16 percent at INR 261.24 crore, however, the exports turnover was lower at INR 135.63 crore. EBIDTA in the 9M FY 2017-18 stood at INR 49.14 crore, Interest cost came down by 45 percent at INR 3.50 crore and Depreciation expense was lower by 6 percent at INR 23.63 crore.

The overall bulk drugs sales remained flat in the nine-month period at INR 244 crore, but the Home Diagnostic category’s sales grew by 36 percent at INR 78.63 crore. Within the home diagnostic category, sales of blood glucose monitors went up by 45 percent at INR 48.13 crore and that of blood pressure monitors by 86 percent at INR 16.64 crore. The Formulations segment registered a revenue drop of 14 percent at INR 72.49 crore.

During Q3 FY 2017-18, Morepen Labs achieved a major breakthrough as the United States Food and Drug Administration (USFDA) cleared its anti-asthma bulk drug Montelukast Sodium for sale in the US market. This development has provided Morepenan entry into the INR 2000 crore (Approx. $ 300 million) US market for Montelukast Sodium. The first commercial orders for the bulk drug are expected in Q2 of FY 2018-19. The company also entered into a tie-up with Vésale Pharma International of Belgium to strengthen its position in the INR 1000 crore Probiotics market in India. An agreement to this effect between the two pharma biggies was officially signed in the august presence of the King and the Queen of Belgium who were recently on their State visit to the Republic of India.

Synopsis of FY18-Q3 & 9M Performance:

Q3  9M
Particulars
 FY 2017-18 FY 2016-17  % Growth
FY 2017-18 FY 2016-17 % Growth
Net Sales Revenue
139.87 137.27 1.9%
396.87 397.09 (0.1%)
Total Revenue
142.74  139.05 3%
406.03  403.63 1%
Expenditure
124.57  123.71  1%
356.89 356.15 0.2%
EBIDTA
18.17 15.34 18%
49.14 47.48 3%
Interest
0.90 2.23  (60)%
3.50 6.32 (45%)
Cash Surplus

 Net Profit
 17.27 13.11  32%
 9.67 4.68   107%
45.64  41.16  11%
22.01 15.99 38%