Detailed Narrative
Q3 & 9M FY25 Financial Performance Overview
Sanjivani Paranteral Limited delivered a robust performance in Q3 and 9M FY25. For Q3, revenue grew by 15.9% year-on-year to INR17.4 crores, with EBITDA increasing by 29.3% to INR2.86 crores, resulting in an EBITDA margin of 16.5%. Profit after tax for the quarter was INR1.9 crores, up 15.5% YoY. For the nine-month period, revenue reached INR51.92 crores, marking a 25% YoY growth, while EBITDA grew 30.2% to INR8.53 crores, with margins at 16.4%. PAT for 9M FY25 was INR5.9 crores, a 20.4% increase.
Base Business Growth and Strategic Focus
The company's base business growth is primarily driven by expansion into new geographies and an increased product basket. In Q3 FY25, the export-domestic mix was 84.1% to 15.9%, while the injectable, tablet, and nutraceutical dosage mix stood at 74.5%, 19.6%, and 5.6% respectively. For 9M FY25, the export-domestic mix was 76.5% to 23.5%, and the dosage mix was 54.1% injectable, 40.6% tablet, and 5.3% nutraceutical. The company has expanded its product offerings from around 35 to 80 products in existing regions and is actively filing for new registrations, including 16 in the French African region, which is expected to drive growth in the coming year.
Joint Ventures Update: HAL and Prague
The Hindustan Antibiotic (HAL) JV plant for IV products, where Sanjivani holds 60% equity, is now ready for operations, having been completed within 10 months. It is awaiting final approvals, expected within 6-7 days. The Pune facility has an installed capacity of 5 million bottles per month and is projected to ramp up to 30-35% utilization by April/May, reaching 100% within 6-7 months. At full capacity, this JV is expected to generate INR100-110 crores in revenue with a 16% EBITDA margin. The Prague venture for nutraceuticals, with 45% equity, has also been commissioned, and its financial details will be shared after the annual balance sheet for March.
Capacity Utilization and Capex
The Navi Mumbai plant is currently operating at 75% capacity utilization, while the Dehradun plant reached 45% utilization in Q3. The company has invested INR3 crores in capex at Dehradun over the past three quarters and INR4 crores at Navi Mumbai. An additional INR5 crores in combined capex is planned for both plants. Management highlighted that the HAL JV plant is a capital-intensive project requiring significant land and resources, which was facilitated through the government partnership.
Margin Outlook and Cost Management
The company's EBITDA margin for Q3 FY25 was 16.5%, slightly lower than the long-term guidance of 19-20%. This was attributed to costs associated with initial trials and inspections for the HAL JV, which cannot be sold as product. Management clarified that this is a temporary phase, and the overall EBITDA margin guidance of 19-20% remains. The current margin profile is expected to stay, with potential improvements starting Q4 due to the new JVs. Cost optimization efforts contributed to the Q3 PAT growth.
Macroeconomic Headwinds and Regulatory Compliance
Sanjivani is navigating challenges from the global macroeconomic environment, including geopolitical issues in the Middle East affecting supply chains and commodity prices. However, management noted some stability recently. The company faced 4 audits for its Navi Mumbai plant during the quarter, indicating a strong focus on regulatory compliance. Management also addressed concerns about US tariff policies and US funding cuts in Africa, stating that their current business is not directly impacted, but they remain vigilant.