Sanjiv.Parant. — Q3 FY25 earnings call

Call held 11 Feb 2025

Management summary

Sanjivani Paranteral Limited reported a decent Q3 and 9M FY25 performance, driven by new products and volume expansion. Revenue grew 15.9% YoY in Q3 and 25% YoY in 9M, with EBITDA margins expanding to 16.5% and 16.4% respectively. The HAL JV plant is ready for operations, with a phased ramp-up expected to contribute significantly to future revenue, targeting INR100-110 crores at full capacity. The company continues its focus on geographic expansion and product basket diversification, while navigating geopolitical and supply chain challenges.

Highlights

  • Q3 FY25 Revenue was INR17.4 crores, a 15.9% YoY growth.

  • Q3 FY25 EBITDA was INR2.86 crores, a 29.3% YoY growth, with margins at 16.5%.

  • 9M FY25 Revenue was INR51.92 crores, a 25% YoY growth.

  • 9M FY25 EBITDA was INR8.53 crores, a 30.2% YoY growth, with margins at 16.4%.

  • The base business is targeted to grow at 25% CAGR over the next couple of years.

  • The HAL JV plant is ready and expected to generate INR100-110 crores in revenue at 100% capacity with 16% EBITDA margin.

  • The company filed for 16 new product registrations in French Africa during the quarter.

  • Navi Mumbai plant utilization is at 75%, Dehradun at 45% for Q3.

Key financials

2 periods

Q3 FY25

  • Revenue
    ₹17.4 Cr
    YoY +15.9%
  • EBITDA
    ₹2.86 Cr
    YoY +29.3%
  • EBITDA Margin
    16.5%
  • PAT
    ₹1.9 Cr
    YoY +15.5%

9M

  • FY25 Revenue
    ₹51.92 Cr
    YoY +25%
  • FY25 EBITDA
    ₹8.53 Cr
    YoY +30.2%
  • FY25 EBITDA Margin
    16.4%
  • FY25 PAT
    ₹5.9 Cr
    YoY +20.4%

What they filed

Q1 FY27: revenue up 8.8%, net profit up 32.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue18 17 18 18 16 −15%21 +20%11 −42%19 +9%
EBITDA3 3 3 3 2 −21%4 +41%1 −65%3 +29%
Net profit2 2 2 2 2 −29%3 +38%1 −57%2 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Q3 FY25 Export Domestic Mix
    84.1% Export15.9% Domestic
  • Q3 FY25 Dosage Mix
    74.5% Injectable19.6% Tablet5.6% Nutraceutical
  • 9M FY25 Export Domestic Mix
    76.5% Export23.5% Domestic
  • 9M FY25 Dosage Mix
    54.1% Injectable40.6% Tablet5.3% Nutraceutical

Capital allocation

high confidence
  • Capex ₹5 Cr New plan — additional capex for both plants
    • Dehradun plant capex (past 3 quarters) ₹3 Cr
    • Navi Mumbai plant capex ₹4 Cr
    • Additional combined capex for both plants ₹5 Cr
    Regarding the capex, we have done at Dehradun, we have almost finished INR3 crores of capex in the past 3 quarters. And in the Navi Mumbai plant, we have done INR4 crores. The total number will be going up to another INR5 crores combined for both plants.
  • M&A Hindustan Antibiotic (HAL) Joint venture · Integrated

    For IV products, 60% equity held by Sanjivani Paranteral Limited.

    Plant is ready, awaiting approvals, expected to ramp up and contribute to margins starting Q4.

    The newest Hindustan Antibiotic joint venture for IV products, where we hold 60% equity... So HAL JV, the plant is ready. And to our investors and to our stakeholders, we completed this plant within a period of 10 months, which was a tough task, and it is spread in the almost 18 acres area. And we are just awaiting certain approvals within 6, 7 days, we'll be ready with that. And trials have already been done. So we are on the track on that.
  • M&A Prague venture Joint venture · Commissioned

    For nutraceuticals, 45% equity held by Sanjivani Paranteral Limited.

    Commissioned, numbers and details to be shared after annual balance sheet for March.

    And regarding the Prague JV, that is also commissioned. The numbers and everything will be shared with the stakeholders after the annual balance sheet for the March.

Guidance & targets

Growth

  • Base Business CAGR Growth · next couple of years · High confidence 25%
    So previously, we have maintained that we will be growing over the next couple of years at 25% around CAGR. So we maintain that kind of a guidance?

    — Neeraj

Capacity

  • HAL JV Pune Facility Capacity Ramp-up (Initial Phase) Capacity · till April or May · High confidence 30% to 35%
    So initially phase, we will be operating at 30% to 35% only. So that part will go on till April or May.

    — Ashwani Khemka

  • HAL JV Pune Facility Capacity Ramp-up (Full Capacity) Capacity · within 6 to 7 months · High confidence 100%
    After that, we will increase to 45%, 50%, 60%, 70% and then we go up to 100% within 6 to 7 months.

    — Ashwani Khemka

Revenue

  • HAL JV Pune Facility Revenue (at 100% capacity) Revenue · at 100% capacity · High confidence INR100 crores and INR110 crores
    Around INR100 crores and INR110 crores.

    — Srivardhan Khemka

Margin

  • HAL JV Pune Facility EBITDA Margin (at 100% capacity) Margin · at 100% capacity · High confidence 16%
    16%.

    — Ashwani Khemka

  • EBITDA Margin (Company-wide) Margin · remaining period · High confidence 19%-20%

    Previously 16% (Q3 FY25) → 19%-20%

    The guidance which is given to 19% -- 19%-20% that will be remaining.

    — Ashwani Khemka

  • Overall Margin Profile Margin · Medium confidence stay
    Yes. So the current margin profile will stay.

    — Srivardhan Khemka

  • Margin Improvement from New JVs Margin · starting Q4 · Medium confidence improve a little bit
    Looking at addition of the new JVs into our profile, we see the margins improve a little bit on that front, but that will happen starting Q4.

    — Srivardhan Khemka

JV Announcements

  • New HAL-type JVs in pipeline JV Announcements · short duration · Medium confidence 2 or 3
    And the moment this is opened, we have already 2 or 3 in pipeline. This will be announced in the short duration.

    — Ashwani Khemka

What to watch in Q4 FY25

HAL JV Pune facility approvals and operational readiness

next quarter
Current Awaiting certain approvals within 6-7 days
Target Ready for operations

Why it matters

Crucial for the commencement of revenue generation from a significant new capacity.

And we are just awaiting certain approvals within 6, 7 days, we'll be ready with that.

Risks & concerns

  • Geopolitical issues and supply chain disruptions

    medium

    Middle East conflict creates volatility in shipment, freight, and supply chains, impacting commodity prices.

    Management acknowledged

  • Raw material price volatility

    medium

    Petroleum crude oil prices impact plastic granule costs, but company has mitigating factors and a 2-month lag for price pass-through.

    Analyst acknowledged

  • High gestation period for new geographies

    medium

    New markets like French Africa can take 1-3 years to break even, impacting short-term margins.

    Management acknowledged

  • US tariff policies

    low

    Potential impact on cross-border trade and manufacturing, but current business not dependent on US.

    Management acknowledged

  • Competition in IV segment

    low

    Management states they are the only IV manufacturer in Maharashtra currently, and new capacity takes 2-3 years to set up.

    Analyst downplayed

Q&A highlights

6 direct
Gross margin contraction in Q3 FY25 despite injectable growth Direct
So what happened was injectable did grow, but it was the lower margin injectables that was being supplied. So what happens is it's not just that injectable has overall a very good margin profile. There are certain products in that space as well, which are supplied at a lower margin, but it all depends on which product played as a mix. That's why you can see the contraction in the gross margin despite the growth in injectables. And also, we expanded into newer geographies. So wherever we enter new, we do have to enter with a lucrative pricing.

Analyst challenged the expected margin expansion given higher injectable mix, and management explained it was due to lower-margin injectable product mix and new geography entry pricing.

Asked by Agastya Dave

Impact of US government funding cuts in Africa on therapeutic areas Direct
See, the US state fundings are majorly in the African market and the WHO tenders, which have been floated world over. So those countries were buying and dependent on the US aid program; HIV, malaria, critical illness and TB. So we are not into any of these segments currently. And these US aid programs are vetting many bigger companies in India, because their outstandings and their supplies will be halted for a time being. But there is no spillover into the general therapeutic segments, right, and the other markets, the non-WHO markets? No. US aid does only on a specific disease and specific categories.

Analyst probed a potential macro headwind, and management clarified that their current product segments are not directly impacted by the US funding cuts in Africa.

Asked by Agastya Dave

HAL JV Pune facility capacity utilization ramp-up and revenue potential Direct
Yes. The Pune facility the installed capacity is 5 million bottles per month and ramp up going up to 100%, it takes minimum 6 to 7 months. So initially phase, we will be operating at 30% to 35% only. So that part will go on till April or May. After that, we will increase to 45%, 50%, 60%, 70% and then we go up to 100% within 6 to 7 months. And the order books, everything are in place. ... Around INR100 crores and INR110 crores.

Provided specific details on the ramp-up timeline and the revenue potential of the new HAL JV facility at full capacity, which is a key growth driver.

Asked by Vedant

Impact of raw material price fluctuations on profitability Direct
You are asking for the product at IV. Currently, the prices are good because the main raw material is the plastic granules, PP granules. And currently, the EBITDA will be more, but it depends on the petroleum crude oil prices in the world market. But we are covered up very nicely, and this plant is eco-friendly and we have a solar system installed and the electric consumption, everything will be very well controlled. ... See, the plastic prices depends when they increase and the effect comes after 2 months only because the pipeline and the inventory levels are there in the company for 3 to 4 months.

Addressed concerns about raw material price volatility, explaining the lag in passing on costs and the mitigating factors like eco-friendly plant and solar system.

Asked by Vedant

Revision in EBITDA margin guidance for HAL JV Direct
Not a revision, just see, because it's just a starting, okay? So there are a few trials to be taken for the optimum -- machines and all. So that cost will be added in this quarter. That is why the EBITDA margin in this quarter will be around 16%. The guidance which is given to 19% -- 19%-20% that will be remaining. Since we do the trials and all those metals cannot be sold in the market. So that cost has to be taken into sales, which will be there in this quarter.

Clarified that the lower 16% EBITDA margin in Q3 was due to initial trial costs for the HAL JV and that the long-term guidance of 19-20% remains intact.

Asked by Anant

Timeline for new HAL-type JVs in pipeline Direct
Yes, it's going on sir. We are the first for PPD model with the government PSUs in India. And the moment this is opened, we have already 2 or 3 in pipeline. This will be announced in the short duration. These are bigger JVs than these HAL.

Indicated that more significant HAL-type JVs are in the pipeline and expected to be announced soon, signaling future growth opportunities.

Asked by Neeraj

3 min read 6 chapters

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.

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