Ajanta Pharma (AJANTPHARM) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue rose 15% year-over-year to ₹1,187 crore, with H1 FY25 revenue up 14% to ₹2,332 crore; branded generics contributed 76% of sales.

• Net profit for Q2 FY25 increased 11% to ₹216 crore; H1 FY25 PAT up 15% to ₹462 crore.

• Interim dividend of ₹28 per share declared, totaling ₹350 crore; total payout for FY25 so far is ₹701 crore, representing 90% of H1 cash flow from operations.

• Branded generics business grew strongly in India, Asia, and Africa, with India up 9%, Asia up 28%, and Africa up 35% YoY in Q2 FY25.

• Consistent outperformance versus Indian Pharmaceutical Market (IPM) growth rates, with leadership in chronic therapies.

Financial highlights

• Q2 FY25 revenue: ₹1,187 crore (up 15% YoY); H1 FY25 revenue: ₹2,332 crore (up 14% YoY); Q2 EBITDA: ₹311 crore (up 7% YoY, 26% margin); H1 EBITDA: ₹642 crore (up 12% YoY, 28% margin).

• Q2 FY25 gross margin improved to 78% from 75% in Q2 FY24; H1 gross margin at 77%, up 200 bps from FY24.

• Cashflow from operations in H1 FY25 was ₹776 crore, with EBITDA to CFO conversion at 121%; free cashflow for H1 FY25 was ₹322 crore (70% conversion).

• ROCE at 34% and RONW at 26% as of September 2024.

• CapEx in H1 FY25 was ₹130 crore; full-year estimate is ₹200 crore.

Outlook and guidance

• Branded generics expected to deliver mid-teen growth for FY25; US business to grow in low to mid-single digits.

• EBITDA margin guidance for FY25 is 28% ±1%; gross margin expected to remain in the 77% range, with 50-100 bps quarterly variation.

• Focus on new product launches, market expansion, and cost optimization to drive future growth.

• Continued investment in R&D and digitalization across functions.

• CapEx and working capital improvements expected to sustain cash flow generation.