Indoco Remedies (INDOCO) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 consolidated revenue was ₹3,946 million, down from ₹4,652 million year-over-year, mainly due to supply constraints in the International Formulation business.

• Domestic business grew modestly, led by key brands and new launches, partially offsetting international headwinds.

• International business faced significant supply constraints from plant upgrades and FDA remediation, impacting US and Europe revenues.

• Received US FDA approval for Lofexidine tablets with 180 days exclusivity and WHO approval for albendazole 400 mg.

• Strategic focus on manufacturing efficiency, cost reduction, and portfolio agility to prepare for future growth.

Financial highlights

• Net revenues for Q2 FY25 were INR 3,946 million, showing muted sequential growth and a year-over-year decline.

• EBITDA margin declined to 13.4% (INR 529 million) from 15.6% (INR 724 million) year-over-year.

• EBIT dropped to INR 128 million from INR 331 million year-over-year.

• EPS for the quarter was INR 1.39, down from INR 3.60 year-over-year.

• Consolidated Q2 FY25 net loss was INR 1,001 lakh, compared to a net profit of INR 3,524 lakh in Q2 FY24.

Outlook and guidance

• Q3 expected to remain constrained due to ongoing supply and remediation issues; more clarity on future guidance anticipated after another quarter.

• Ramp-up in Europe and emerging markets expected from Q4 as plant upgrades near completion.

• Structured shutdowns at manufacturing sites are expected to improve efficiency and address supply constraints.

• Confident of 25-30% growth in OTC toothpaste segment in the second year post-OTC transition.