Bonus issue fails to lift Ajanta Pharma; stock hits 52-week low on weak Q4

Shares of Ajanta Pharma hit a 52-week low of Rs 1,593, down 4 per cent on the BSE in Wednesday’s intra-day commerce due to weak operational efficiency for the quarter ended March 2022 (Q4FY22). The board of administrators has authorized a bonus issue within the proportion of 1:2 fairness share of Rs 2 every.

The stock was quoting decrease for the sixth straight buying and selling day, falling 12 per cent throughout this era. At 11:58 am; it was buying and selling 2.5 per cent decrease at Rs 1,616, as in contrast to a 0.61 per cent decline within the S&P BSE Sensex.

Ajanta Pharma is a specialty pharmaceutical formulation company having branded generic business in India and rising markets, generic business in US and establishment business in Africa.

In Q4FY22, Ajanta’s earnings earlier than curiosity, taxes, depreciation, and amortization (ebitda) declined 20 per cent year on year (YoY) to Rs 207 crore. Ebitda margins declined 1,053 bps YoY to 23.7 per cent due to decrease gross margins (down 531 bps) and better different bills.

The company’s income grew 15 per cent YoY to Rs 870 crore pushed by home business development of 12 per cent YoY at Rs 245 crore and rising markets (branded) which grew 46 per cent YoY to Rs 399 crore.

US gross sales de-grew 3 per cent YoY to Rs 168 crore, whereas Africa tender business was down 37 per cent YoY to Rs 50 crore.

Ajanta’s home business was pushed by development of 11 per cent in cardiology, 25 per cent in ophthalmology, 17 per cent in dermatology and 28 per cent in ache administration. US business witnessed continued pricing erosion (~18 per cent) amid enhance in competitors, ICICI Securities mentioned in a word.

Ajanta is probably going to preserve home development momentum leveraging on the already launched merchandise (16 new launches in FY22, 4 being First to Market) and leverage its branded position in rising markets by way of market share achieve and new launches. On the margins entrance, materials value was increased due to inflationary API costs and US value erosion, the brokerage mentioned.

Motilal Oswal Financial Services has reduce FY23/FY24 estimated EPS by 6 per cent/7 per cent, respectively, to consider elevated uncooked materials/provide chain prices, increased value erosion within the US generics and muted institutional anti-malaria gross sales.

“We believe the company will sustain outperformance in the branded generics segment of DF/Africa/Asia aided by new launches, market share gains in existing products and price hikes to some extent. While the near-term outlook would be subdued, the higher pace of filings/approvals would improve the growth prospects in the US generics segment,” the brokerage mentioned in a outcomes replace.

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