Innova Captab Limited — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Innova Captab reported strong Q4 and full-year FY25 results, driven by robust growth across all business segments and the successful commissioning of its new Kathua, Jammu facility. The company achieved a 15% YoY revenue growth for FY25, reaching INR1,243.7 crores, with EBITDA and PAT growing by 19% and 36% respectively, supported by improved gross contribution and operating leverage. Management expressed confidence in future growth, targeting a 25% CAGR over the next three years, with the Jammu plant expected to contribute significantly.

Highlights

  • FY25 Total Revenue: INR1,243.7 crores, up 15% YoY.

  • Q4 FY25 Total Revenue: INR314.7 crores, up 20% YoY.

  • FY25 EBITDA: INR198.2 crores, up 19% YoY.

  • FY25 EBITDA Margin: 15.9%, expanded 50 bps YoY.

  • FY25 PAT: INR128.3 crores, up 36% YoY.

  • FY25 PAT Margin: 10.3%, expanded 160 bps YoY.

  • Jammu plant contributed INR36 crores revenue in Q4 FY25.

  • Guidance for Jammu plant revenue in FY26 is INR400 crores, including INR30-35 crores GST benefit.

Key financials

2 periods

Q4

  • Revenue
    ₹314.7 Cr
    YoY +20%
  • EBITDA
    ₹51.1 Cr
    YoY +17%
  • EBITDA Margin
    16.2%
  • PAT
    ₹29.6 Cr
    YoY +3%
  • PAT Margin
    9.4%

FY25

  • Revenue
    ₹1,243.7 Cr
    YoY +15%
  • EBITDA
    ₹198.2 Cr
    YoY +19%
  • EBITDA Margin
    15.9%
    YoY +0.5%
  • PAT
    ₹128.3 Cr
    YoY +36%
  • PAT Margin
    10.3%
    YoY +1.6%

What they filed

Q1 FY27: revenue up 33.8%, net profit up 41.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue318 316 315 352 380 +19%450 +42%448 +42%471 +34%
EBITDA50 47 48 52 52 +4%69 +47%65 +35%73 +40%
Net profit35 34 30 31 30 −14%42 +24%38 +27%44 +42%
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

Share of FY25 Revenue
₹1,243.7 Cr Total
  • CDMO ₹659.9 Cr 53.1%
  • Domestic Branded Generic ₹230.7 Cr 18.5%
  • Sharon Bio-Medicine ₹196.8 Cr 15.8%
  • International Branded Generic ₹156.3 Cr 12.6%

Guidance & targets

Revenue

  • Jammu Plant Revenue Revenue · FY '26 · High confidence INR400 crores
    as of now, we maintained our guidance of that Jammu plant is poised to achieve a revenue of around INR400 crores for this financial year FY '26.

    — Lokesh Bhasin, Chief Financial Officer

  • Existing Facilities Revenue Growth (ex-Jammu) Revenue · coming times · Medium confidence early teens
    So, the way I look at it, we are maintaining that we should be growing in early teens for our existing facilities. Plus, over and above the revenue that we'll get from Jammu plant.

    — Lokesh Bhasin, Chief Financial Officer

  • Overall Revenue Growth CAGR Revenue · next 3 years · High confidence 25% revenue growth
    So, where we seek to over long term, we are very much confident that we should be maintaining the CAGR of 25% revenue growth over the next 3 years.

    — Lokesh Bhasin, Chief Financial Officer

Profitability

  • Jammu Plant EBITDA Break-even Sales Profitability · High confidence INR50 crores to INR55 crores
    Okay. I think we should be EBITDA positive -- EBITDA neutral, sorry, EBITDA neutral by around sale of INR50 crores to INR55 crores.

    — Lokesh Bhasin, Chief Financial Officer

Other Operating Income

  • GST Benefit from Jammu Plant Other Operating Income · High confidence INR30 crores to INR35 crores
    Sir, it should be in the range of INR30 crores to INR35 crores.

    — Lokesh Bhasin, Chief Financial Officer

Depreciation

  • Jammu Plant Depreciation Depreciation · per annum · High confidence around INR24 crores to INR25 crores
    So over and above existing depreciation rate, the Jammu plant would be having a depreciation of around INR24 crores to INR25 crores per annum.

    — Lokesh Bhasin, Chief Financial Officer

Risks & concerns

  • Geopolitical Tensions / Operational Impact at Jammu Plant

    medium

    Analyst asked about 'tensions going on in the state right now' and 'blackout'. Management stated 'there was some restlessness' but 'no shutdown in our facility for even a single day' and expressed 'full faith in our Indian army and our government'.

    Analyst downplayed

  • Working Capital Increase

    medium

    Working capital investment increased due to 'increase in operations' and 'initial working capital to start the plant' at Jammu. Management is 'hopeful that in coming times, this working capital will return back to the normal days.'

    Analyst acknowledged

  • Cannibalization from Baddi to Jammu

    low

    Management noted 'a certain element of cannibalization at initial level wherein, we are moving our revenue from our existing Cepha facility in Baddi to our new upcoming facility in Jammu of Cepha Block.'

    Management acknowledged

Areas of evasion (1)

  • precise segment-level gross margins

Q&A highlights

2 direct
Jammu Plant Contribution, Cannibalization, and FY26 Guidance Direct
During the Quarter 4 FY '25, see, our Jammu plant start commercialized operation from 14th of January 2025. And for this Quarter 4 '25, Jammu plant contributed a revenue of around INR36 crores... So, there is a certain element of cannibalization from Baddi to Jammu at an initial period itself.

Provides specific initial revenue contribution from the new plant and clarifies the impact of internal transfers, which is crucial for understanding underlying growth.

Asked by Amey Chalke

Gross Margin Improvement Drivers and Segment Profitability Partial
So, Vidit, the gross margin improvement is mainly driven by a couple of reasons, which is our operational efficiency, a better product mix, bearing the best optimum resources or optimal use of the resources that we are having... Sharon is having a slightly better gross margin, but they are having a different target market because they are majorly into regulated market in exports.

Explains the factors behind the reported highest-ever gross margin and offers a qualitative comparison of profitability across segments, which is often a key investor question.

Asked by Vidit Shah

Sharon Bio-Medicine's Flat Revenue History and Future Growth Strategy Direct
So, as you are aware that Sharon being in CIRP, there were no new initiation, new steps has been taken. Once we integrate -- and I think June to 1.5 year back, then we start taking new projects and all that. So that will mature in the coming quarters and coming year as there is a long lead time for -- long gestation time for in a regulated market. So, we see that all positivity should reflect in this upcoming year.

Addresses the historical underperformance of Sharon and outlines the strategic rationale and timeline for its revival post-acquisition, which is a significant part of Innova Captab's overall strategy.

Asked by Miten Lathia

3 min read 6 chapters

Detailed narrative

Q4 & FY25 Performance Overview

Innova Captab delivered a strong financial performance for Q4 FY25 and the full fiscal year. For Q4 FY25, total revenue stood at INR314.7 crores, marking a robust 20% year-on-year growth. Full-year FY25 revenue reached INR1,243.7 crores, reflecting a 15% growth. The company's EBITDA for FY25 was INR198.2 crores, growing 19% YoY, with the EBITDA margin expanding by 50 basis points to 15.9%. Net Profit After Tax (PAT) for FY25 surged by 36% to INR128.3 crores, improving the PAT margin by 160 basis points to 10.3%.

Jammu Plant Commissioning & Outlook

A significant milestone for the quarter was the commercial production launch at the new Kathua, Jammu facility on January 14, 2025. This plant contributed INR36 crores to the revenue in Q4 FY25. Management expressed high confidence in the facility's potential, guiding for a revenue contribution of INR400 crores in FY26. This guidance includes an estimated GST benefit of INR30-35 crores. The Jammu plant is expected to become EBITDA neutral at a sales level of INR50-55 crores and will incur an annual depreciation of INR24-25 crores.

Segmental Business Performance

All business segments demonstrated strong growth. The CDMO business recorded a 12% YoY growth in Q4 and 6% for the full year, with FY25 revenue at INR659.9 crores. Domestic Branded Generic business showed stellar performance, growing 30% in Q4 and 21% for FY25, reaching INR230.7 crores, driven by expanded product portfolio and market penetration to over 220,000 pharmacies. International Business posted solid 47% YoY growth in Q4 and 25% for FY25, with revenue of INR156.3 crores, expanding presence to 30+ countries. Sharon Bio-Medicine closed FY25 with INR197 crores revenue, growing 15% in Q4, with strategic initiatives underway to leverage synergies and drive future growth in regulated markets.

Profitability & Margin Expansion

The company's profitability saw significant improvement, with EBITDA growing faster than revenue. The EBITDA margin for FY25 increased by 50 basis points to 15.9%, and PAT margin improved by 160 basis points to 10.3%. This margin expansion was primarily attributed to enhanced operational efficiency, a favorable product mix, and optimal resource utilization. Management anticipates further margin improvement in coming years due to increased operations, operating leverage benefits, GST incentives from the Jammu plant, and new product introductions.

R&D and Innovation Initiatives

Innova Captab emphasized its commitment to innovation and R&D. The company's dedicated R&D laboratory and pilot scale manufacturing center in Baddi are recognized by DSIR. An upcoming facility in Panchkula, Chandigarh, will further strengthen R&D capabilities, focusing on developing complex generic and differentiated formulations. This strategic investment aims to enhance the innovation pipeline, support the expansion of the product portfolio, and enable the development of own IP products for regulated and semi-regulated markets, leveraging the manufacturing capabilities of both Baddi and Sharon.

Working Capital Management

The company noted an increase in working capital investment during the year. This was primarily due to the overall increase in operations and the initial working capital required to commence operations at the new Jammu plant. Management expressed optimism that working capital levels would normalize in the coming periods as the Jammu facility stabilizes and operations mature.

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