Neuland Laboratories (524558) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 total income reached INR 444.4 crores, up 21.7% year-over-year, driven by strong CMS business growth and healthy EBITDA margins.

• EBITDA (excluding exceptional items) was INR 128.6 crores with a margin of 28.9%, up 174 bps from Q1 FY24.

• Profit after tax was INR 98.3 crores, including an exceptional gain of INR 20.6 crores from sale of investment property.

• Free cash flow for the quarter was INR 50.9 crores; net debt position is negative at INR 110.2 crores.

• Continued investments in capacity and technology, with INR 59.1 crores in capital expenditure during Q1 FY25.

Financial highlights

• Gross margin for Q1 FY25 was 56.1%, compared to 55.2% in Q1 FY24 and 58.8% in Q4 FY24.

• PAT margin at 22.1%, up 510 bps YoY.

• Working capital cycle stands at 107 days, improved from 118 days in Q1 FY24.

• Decline in manufacturing expenses attributed to lower capacity utilization in Unit 3.

• EPS for the quarter: INR 76.6, up from INR 48.5 in Q1 FY24.

Outlook and guidance

• FY25 expected to be a year of consolidation and normalization for revenue growth and margins, with stronger momentum projected from FY26 as new capacities and products come online.

• Management remains optimistic about the long-term potential of the CMS business and continued R&D investments.

• No specific numeric guidance provided; management emphasizes medium- to long-term confidence.