Granules India Limited, a prominent player in the pharmaceutical industry, has announced its financial results for the second quarter of FY25, reporting a mixed performance marked by a decline in both revenue and net profit. The company’s revenue from operations stood at ₹9,666 million, down by 19% from ₹11,895 million in the corresponding quarter of the previous fiscal year. This decline was largely attributed to a temporary halt in production at the Gagillapur plant in September 2024, a precautionary step taken to address potential risks associated with observations made by the US FDA. Production has since resumed, albeit in a phased manner.
In terms of profitability, the company recorded an EBITDA of ₹2,033 million, down by 5% year-on-year from ₹2,130 million in Q2 FY24. The EBITDA margin came in at 21%, a slight drop compared to the 22% recorded in the previous quarter, though still higher than the 18% margin in Q2 FY24. The net profit for Q2 FY25 reached ₹972 million, representing a 5% year-on-year decline from ₹1,021 million in the previous year, and a 28% decline from ₹1,346 million reported in Q1 FY25.
Key Performance Highlights
- Revenue from Operations: ₹9,666 million in Q2 FY25, down 19% YoY from ₹11,895 million in Q2 FY24, and an 18% decline from ₹11,799 million in Q1 FY25.
- EBITDA: ₹2,033 million, a decrease of 5% YoY, with EBITDA margin of 21% in Q2 FY25 compared to 18% in Q2 FY24.
- Net Profit: ₹972 million, down 5% YoY from ₹1,021 million in Q2 FY24, and a 28% QoQ decline from ₹1,346 million in Q1 FY25.
The North American market remained a key revenue driver, contributing 79% of the total revenue for Q2 FY25, up significantly from 67% in the same quarter of the previous year. This uptick reflects robust demand in the region, even as the company faced operational challenges domestically.
Operational Highlights and Strategic Moves
Granules India’s diversified revenue streams span Finished Dosages (FD), Active Pharmaceutical Ingredients (API), and Pharmaceutical Formulation Intermediates (PFI), contributing 77%, 15%, and 8% of the company’s total revenue for the quarter, respectively. Despite the revenue decline, the company maintained a Return on Capital Employed (ROCE) of 16.9% for Q2 FY25, up from 12.9% in the same period last year, indicating effective capital utilization and operational efficiency.
In addition, the company’s net debt position stood at ₹7,973 million, with a net debt-to-EBITDA ratio of 0.86x, showcasing a balanced approach to leverage while focusing on operational stability.
Management Commentary
Dr. Krishna Prasad Chigurupati, Chairman and Managing Director of Granules India Limited, addressed the results, stating, “Q2 sales were impacted by a voluntary pause in manufacturing and distribution from our Gagillapur facility. We delivered strong margins, supported by profitable formulations sales and a favorable product mix. Our operations also generated a healthy cash flow from operations amounting to ₹2,007 million.
