SeQuent Scientific reports PAT growth of 154 per cent.
SeQuent Scientific Limited (SSL) reported a healthy financial performance in the quarter ended March 2019.
The company reported total income from operations of Rs. 281.90 crore in Q4FY19 as against Rs. 232.76 crore in Q4FY18, posting a growth of 21.11 per cent. EBITDA increased to Rs. 38.99 crore in Q4FY19 from Rs. 30.25 crore in Q4FY18, thereby increasing 28.89 per cent. EBITDA margin stood at 13.8 per cent in Q4FY19. PAT from continuing operations rose to Rs. 21.33 crore in Q4FY19 from Rs. 8.40 crore in Q4FY18, registering a growth of 153.93 per cent.
API business continued to showcase strong growth momentum as it grew 74.9 per cent YoY and 13.3 per cent QoQ. This is expected to continue in the upcoming quarters as the company is strengthening its presence in regulated markets, thereby awarding itself greater pricing power. SSL’s realisations were enriched as the penetration of the Top 10 global animal health players in the API segment improved. The management has provided growth guidance of 30 per cent in FY20 in the API segment and mid-teen growth in the formulations business. The growth of formulation sales in Europe has moderated to 7.8 per cent owing to supply chain challenges due to the possibility of Brexit. Sales in Turkey recovered partially in Q4 as they were subdued in the previous quarters due to the regulatory changes to curb the misuse of antibiotics. Nevertheless, on a sequential basis, the sales rebounded by 105.2 per cent.
During the quarter, minority interest increased significantly to Rs. 4.2 crore. Due to the high filing fees in the U.S., the company had adopted a cautious approach of beginning with just one product filing in Q1FY20. The management has guided for healthy organic expansion in the US. in FY20 and commercialization of the product in FY21. Overall, SSL is targeting 10 to 12 product filings each year. Typically, the products are launched 12-14 months after filing. As such, SSL has a total pipeline of 35 products, of which 21 products are in the US. Over the next three years, the company will incur capital expenditure to the tune of Rs. 20 -25 crore.
The improved product and geography mix, combined with the positive traction in the API business, has resulted in an advantageous pricing dynamics and improved revenue visibility moving forward. Management has guided for margin expansion of 200 bps per year.
SeQuent Scientific Ltd. (SSL) is a pharmaceutical company which operates in the domains of Animal Health (API and Formulations). Its Animal healthcare Business is branded as Alivira Animal Health. Its products cater to livestock, poultry as well as companion animals.
On Thursday, the shares of SSL opened at Rs. 68.30, and hit a high and low of Rs. 68.95 and Rs. 68.10, respectively. At 9:53 am, the stock was trading at Rs. 68.25, down 0.07 per cent.