Bliss GVS Pharma (506197) Q4 17/18 earnings summary

Executive summary

• FY18 consolidated operational income rose 1.6% YoY to ₹8,151 Mn; EBITDA fell 2.8% to ₹1,971 Mn and PAT declined to ₹886 Mn from ₹1,127 Mn.

• Standalone operational income declined 14.8% to ₹2,983 Mn, while net profit fell 3.6% to ₹570 Mn; export weakness reflected economic instability and currency devaluations in African markets.

• Strategic focus shifted toward core pharmaceuticals after divestment of Bliss GVS Healthcare; proceeds were intended for debt repayment, manufacturing expansion and shareholder incentives.

Financial highlights

• Consolidated net sales reached ₹8,069 Mn versus ₹7,762 Mn; PBT was ₹1,453 Mn versus ₹1,754 Mn and PAT was ₹886 Mn versus ₹1,127 Mn.

• Standalone net sales were ₹2,914 Mn versus ₹3,268 Mn; PBT was ₹868 Mn versus ₹949 Mn and PAT was ₹570 Mn versus ₹591 Mn.

• Consolidated forex gains from improved FX management were ₹569 Mn; standalone forex gains were ₹439 Mn.

• Consolidated disposal of the healthcare subsidiary generated a one-time exceptional loss of ₹342 Mn; excluding this loss, consolidated profit would have been higher by the same amount.

Outlook and guidance

• Management expects a recovery in African economies to help restore sales growth; near-term performance remains tied to currency and economic stabilization in these markets.

• Expansion priorities include Europe, South America, Asia-Pacific, Russia and CIS markets, using suppository and pessary expertise and stronger R&D and marketing capabilities.

• A new manufacturing plant was scheduled to become operational in Q1 FY20; R&D manpower was also being expanded to support product innovation and market entry.

• Portfolio growth focus includes registrations in antibiotics, anti-inflammatory, anti-diabetic, anti-hypertensive and cough-and-cold therapies.