Zydus Lifesciences Q4 net income drops 24% to Rs 397 crore

Zydus Lifesciences Ltd. reported a net profit of Rs 397.4 crore for the fourth quarter ended March 31, 2022 of financial year 2021-22, owing to development in the domestic and emerging markets formulations operations (FY22).

Zydus Lifesciences Ltd. reported a net profit of Rs 397.4 crore for the fourth quarter ended March 31, 2022 of financial year 2021-22. Which was owing to development in the domestic and emerging markets formulations operations (FY22).

For the fourth quarter ended March 31, 2021 of the preceding financial year 2020-21, the pharma company declared a net profit of Rs 679 crore (FY21). When one-time inventory provisions, extraordinary and non-recurring events, and profit from ceased activities were taken into account, the net profit for Q4 FY21 was Rs 525 crore.

On a year-over-year (YoY) basis, revenue from operations increased by 5% to Rs 3863.8 crore, up from Rs 3670 crore in Q4 of FY’21.

The operational performance occurred amid geopolitical upheaval, resulting in supply chain issues and inflationary pressures, according to Sharvil Patel, Managing Director, Zydus Lifesciences Limited.

“Our key businesses performed well aided by an agile supply chain which helped sustain profitability. While the quarter’s reported margins were impacted by one-off inventory related provisions, adjusted profitability remained above 20 per cent. Progress on our innovation efforts to build a robust pipeline for the future has been on track. We remain committed to our pipeline execution to drive sustainable growth,” Patel added.

Zydus Lifesciences’ domestic business. Which includes formulations and consumer wellness divisions and accounts for 48% of consolidated revenues. Increased by 11% year on year to Rs 1797 crore. However, the branded India business grew by 13% YoY, excluding sales of COVID-related portfolio.

Sales of formulations increased by 14% YoY to Rs 1164 crore in the domestic sector, with the company’s focus on volume expansion continuing in the quarter. Based on AWACS data, Zydus’ formulations business gained market share in key therapeutic areas such as anti-diabetic, cardiovascular, and gynaecological throughout the quarter. On the super specialty front, Zydus maintained its leadership position in the nephrology area, while it was India’s fastest growing oncology company.

The company’s US formulations division. On the other hand, suffered a 4% YoY drop to Rs 1423.3 crore in the quarter. The US business contributes for 38% of the company’s total sales.

During the quarter, the company filed one abbreviated new drug application (ANDA). And got final approval for five new medications in its US business. Despite launching four new products. On the speciality front, Zydus has agreed to buy NULIBRYTM from BridgeBio Pharma Inc. Under an asset purchase agreement (Fosdenopterin for Injection). The medicine has been approved by the USFDA to lower the risk of death in kids with MoCD Type A. An extremely uncommon and life-threatening paediatric genetic condition.

R&D expenditures for the quarter was Rs 2,69.7 crore, accounting for 7% of revenue.

The company’s emerging markets division. Which includes significant markets like Sri Lanka, the Philippines, Brazil, South Africa. And Mexico, generated Rs 275 crore in revenue, up 10% year on year. The business accounted for 7% of the company’s total revenue.

Zydus’ sales from active pharmaceutical ingredients (API) fell 2% to Rs 136.3 crore. The API business accounted for 4% of total sales.

Zydus also received an emergency use approval (EUA) from the DCGI for its COVID-19 vaccine ZyCov-D. Which is a two-dose vaccine for those aged 12 and up. The vaccination will now be given on days 0 and 28 following its approval. The vaccine was previously licenced as a three-dose regimen to be given on days 0, 28, and 56.

In the meantime, the Board approved a proposal to buyback equity shares. For an aggregate amount of up to Rs 750 crore (excluding tax and other charges). Representing 1.13 percent of total paid-up equity share capital. At a price of Rs 650 per share, a 90% premium to the closing price on May 19, 2022.

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