Granules Q3 net declines 6% to ₹118 crore 

Granules India reported a more than 6% decline in consolidated net profit for the December quarter to ₹117.60 crore from ₹125.65 crore year earlier amid price erosion and lower demand in a few business segments as well as rise in certain expenses post a recent U.S. Food and Drug Administration (U.S. FDA) inspection of a facility.

Total revenue from operations declined a tad under 2% at ₹1,137.69 crore (₹1,155.58 crore). Sequentially, the net profit increased 21% and revenue from operations 18%. The comparable numbers in the September quarter were ₹97.2 crore and ₹966.6 crore respectively.

Finished dosages (FD), active pharmaceuticals ingredients (API) and pharmaceutical formulation intermediates (PFI) contributed 76%, 12%, and 12% of revenue from operations during the third quarter. Revenue share from North America increased to 77% in Q3 from 66% year earlier.

“We continue to sustain our profitable growth in the finished dosages segment, driven by our North America business. We are enhancing quality and compliance through systemic improvements across our operations, including Gagillapur,” CMD Krishna Prasad Chigurupati said.

The Hyderabad-based generic drugmaker had voluntarily paused production at its Gagillapur plant in September for a risk assessment consequent to a U.S. FDA inspection and issue of six observations. Subsequently, in October, it resumed production in a staggered manner.

The company said YoY growth in FD was offset by a continued decline in API/PFI due to lower demand and persistent price erosion. EBITDA margin was impacted as freight, FTS and professional expenses have gone up on account of recent U.S. FDA inspection. Continued research and development investments further impacted the EBITDA margin. Granules shares on Friday closed 2.83% lower at ₹582.35 each on the BSE.