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Suven Pharma - CDMO Core Growth Intact; Formulations To Pick Up: Anand Rathi

Suven Pharma - CDMO Core Growth Intact; Formulations To Pick Up: Anand Rathi

A scientist at R&D facility of Suven Pharmaceuticals Ltd. (Source: Company website)
A scientist at R&D facility of Suven Pharmaceuticals Ltd. (Source: Company website)

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Anand Rathi Report

Suven Pharmaceuticals Ltd.’s pharma contract development and manufacturing organisation sales (down 21% QoQ to Rs 2 billion) were less than expected as the contribution from one Covid-19 molecule wasn’t as huge as expected.

Specialty CDMO clocked sales of a good Rs 1.3 billion (up 30% QoQ); formulation sales were Rs 184 million (up 28% QoQ).

Suven Pharma's gross margin was steady at 69-70%. Staff costs and other expenses were higher (more transportation and distribution costs) at respectively 8.6% (average 6-6.5%) and 17.4% of sales (versus average 14-15%).

This translated to a 43% Ebitda margin. The higher tax rate (43% versus average 25-33%) eroded profit, which was Rs 917 million (42% YoY, adjusted for the share of profit from rising pharma).

We slightly trim our earnings estimate, factoring in higher formulations sales (boosted from Casper’s site) which would drag on margins.

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Anand Rathi Suven Pharma Company Update.pdf

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