Shares of SMS Pharmaceuticals soared 16 per cent to Rs 189.95 on the BSE in Thursday’s intra-day trade on healthy business outlook.
Thus far in the calendar year, the stock of pharmaceutical company has zoomed 60 per cent. It had hit a 52-week high of Rs 194 on March 6, 2024 and touched a record high of Rs 198.80 on August 5, 2021.
SMS Pharma is a diversified and fully integrated pharmaceutical company, with interests in Active Pharmaceutical Ingredients (API) and Intermediates. Within the API segment, ~12 per cent of the revenues came from the domestic market and ~88 per cent from the exports market (including deemed exports) for the December quarter (Q3FY24).
In the past one month, the market price of SMS Pharma has surged 31 per cent after the company reported profit after tax (PAT) of Rs 11.48 crore in Q3FY24. It had posted PAT of Rs 3.77 crore in the previous year quarter.
Ebitda (earnings before interest, taxes, depreciation, and amortisation) grew 56.7 per cent to Rs 29 crore; margin improved to 17.96 per cent from 12.44 per cent in Q3FY23. Revenue was up 8.5 per cent year-on-year at Rs 161.48 crore.
The management said sales volume growth, improved product mix, and new product introductions have been the primary drivers of the company’s topline growth. Additionally, operational profit margins have improved as a result of more efficient cost management. From 50–55 per cent in the prior quarter, the company’s capacity utilization climbed sequentially to around 65–70 per cent in Q3FY24, the management said.
The management is positive about future outlook, as the company continues to expand its presence in the ibuprofen market. Two of major segments of anti-diabetic & ARV will also experience sustainable growth, as the management expects strong volumes in the upcoming quarters for both segments. This growth will get further impetus by the company’s new product offerings.
The company is poised to capitalize on the capex it had undertaken, with further ramping up ibuprofen production in the coming quarters. In the next fiscal year, the management anticipates achieving growth in the mid-teens, accompanied by a slight enhancement in operating margins.
Meanwhile, on February 10, the board had given their approval for a fund-raising initiative through the issuance of convertible equity warrants on a preferential basis to the Promoter Group.
The warrants will be priced at Rs 127 per warrant, aggregating to Rs 114.30 crore. 55 per cent of the funds raised will be allocated towards capex, 35 per cent towards working capital, and the remaining 10 per cent for general corporate use. The company said it will reveal the detailed capex plans in the near future.
First Published: Mar 14 2024 | 12:39 PM IST