Marksans Pharma smashes records: 18% revenue surge and massive profit boost in Q1 FY25

Marksans Pharma Ltd. (NSE: MARKSANS; BSE Code: 524404) has unveiled its financial results for the quarter ending June 30, 2024, highlighting a robust start to the fiscal year. The company’s revenue surged by 18% year-on-year (YoY), accompanied by a substantial expansion in gross margins and significant increases in both EBITDA and profit after tax (PAT).

Key Financial Highlights

In the first quarter of FY25, Marksans Pharma Ltd. reported an operating revenue of INR 590.6 crore, marking an 18.1% increase compared to the previous year. This growth was primarily driven by new product launches and an expanded market share with existing customers. Gross profit also saw a notable rise, reaching INR 328.8 crore, a 27.8% increase YoY. The gross margin expanded by 418 basis points to 55.7%, attributed to a favourable shift in raw material costs and an improved product mix.

The company’s EBITDA stood at INR 128.4 crore, reflecting a 25.9% increase with a margin of 21.7%. Earnings per share (EPS) also grew by 29.3% YoY to INR 2.0.

Market Performance and Strategic Developments

• US Market: The US and North American formulation business saw a remarkable 29.8% YoY growth, generating INR 250.9 crore. This success was driven by revenue from new product launches and a higher market share with existing customers. The company has a pipeline of 32 products, including 20 oral solids and 12 ointments and creams, with 4 of these being Softgels.
• UK and Europe Market: Revenue from the UK and European formulation business reached INR 251.5 crore, marking an 11.3% increase. The company plans to file 34 new products over the next three years, with 16 products currently filed and awaiting approval.
• Australia and New Zealand Market: The business in Australia and New Zealand reported INR 65.6 crore in revenue, a 12.0% increase YoY, due to gaining incremental market share. The company has 10 products in the pipeline expected for launch over the next two years.
• Rest of the World (RoW) Market: The RoW segment generated INR 22.7 crore in revenue during the quarter.

Additional Highlights

Marksans Pharma Ltd. invested INR 31.0 crore in capital expenditure (capex) during Q1 FY25, aligning with its plans to scale its newly acquired manufacturing unit from Teva Pharma in Goa. This investment is anticipated to drive future growth. The company’s cash balance as of June 30, 2024, stood at INR 691 crore, with cash from operations at INR 45.3 crore and free cash flow at INR 14.3 crore. Research and Development (R&D) expenditure amounted to INR 12.0 crore, representing 2.0% of consolidated revenue. During the quarter, the company also received market authorisation from the UK Medicines and Healthcare products Regulatory Agency (UKMHRA) for several products, including Levonorgestrel 1.5mg tablets and Olmesartan 10, 20, and 40mg tablets.

Expert Insight

Mark Saldanha, Managing Director of Marksans Pharma Ltd., expressed his satisfaction with the company’s performance, noting, “We are delighted to build on the growth momentum from the last year. The first quarter of FY25 has shown a strong start with an 18% YoY increase in revenue and a 26% YoY increase in EBITDA. The growth is supported by increased share from existing customers and new launches. Despite the surge in freight costs, we are optimistic for a stronger performance in the coming quarters as we continue our journey towards achieving our next revenue goal of INR 3,000 crore over the next two years.”