Marksans Pharma - With Focus On Backward Integration, Operating Margin Is Expected To Improve: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .HDFC Securities Retail Research.Marksans Pharmaceuticals Ltd. is concentrating on regulated markets of U.S. and UK with focus on higher margin softgels and over the counter products. Also, its strong balance sheet is likely to support inorganic growth through acquisitions of abbreviated new drug application, product licenses and capacities. With focus on backward integration, operating margin is expected to improve in the coming quarters. Consolidated Ebitda margin contracted to 17.4% in FY22 (Ebitda margin of 24.7% in FY21). For nine months-FY23, Ebitda margin slipped 140 basis points at 16.8%. It was due to product mix tilted towards OTC segment vis-a-vis prescription segment, higher raw material costs, freight and packaging material costs.FY21 base was high due to Covid-19 driven by panic buying. Freight costs also more than doubled due to the container shortages and increase in crude oil prices. Margin is expected to improve led by-normalisation of operating expenses,balanced focus of both OTC and prescription segments andbackward integration (active pharma ingredient business). Marksans Pharma has strong balance sheet with cash and equivalents of Rs 417 crore as on December 2022 and including money received of warrants it would be around Rs 696 crore. We estimate 17% compound annual growth rate in revenue led by strong growth from UK and Australia and New Zealand and healthy growth from U.S. market over FY22-25E..Click on the attachment to read the full report:.NCC - Robust Order Backlog Provides Strong Revenue Visibility: HDFC Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Marksans Pharma - With Focus On Backward Integration, Operating Margin Is Expected To Improve: HDFC Securities

Management guided for revenue of Rs 1800 crore, gross margin of 50-51% and Ebitda margin of ~17% in FY23.

Choose a plan