Indoco Remedies Q3 Results Review - Forex Losses Impact Net Earnings: Systematix
Indoco Remedies’ Q3 FY23 revenue was inline with our estimates, it had aggressively hedged the euro and pound.
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Systematix Research Report
Indoco Remedies Ltd.’s Q3 FY23 revenue was inline with our estimates. The company had aggressively hedged the euro and pound. The two currencies in relation to Indian rupee have appreciated ~10% QoQ. Indoco Remedies recorded an mark-to-market forex loss of Rs 145 million in Q3 FY23.
Excluding this impact, Ebitda margin came in at 18% and net earnings were ~7% below our estimates. The company’s India and Europe businesses posted a robust growth of 12% and 58% YoY respectively, which was offset by lower than expected U.S. sales. U.S. sales were impacted by lower milestone / profit share contribution during the quarter.
Indoco Remedies has marginally tapered its U.S. business sales guidance from Rs 3,000 million to 2,850 million (nine months-FY23 – Rs 1,950 million) for FY23.
We believe Indoco Remedies will be able to significantly increase its U.S. revenues in Q4 FY23 as it expects to realize milestone income and ramp up market share in gCombigan. The company has set an ambitious target of achieving Rs 50,000 million in revenue by FY27-28.
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