Neuland Laboratories Ltd, a prominent name in the pharmaceutical sector, experienced a sharp decline in its stock price, dropping over 13% following the release of its Q2 FY25 financial results. The company reported a notable reduction in both revenue and profit, attributing the downturn to challenging market conditions.
Key Financial Highlights
- Total Income: Neuland’s total income for Q2 FY25 came in at ₹315.2 crore, down 25.1% year-on-year (YoY) from ₹420.8 crore in Q2 FY24. This also marked a 29.1% decline from ₹444.4 crore in Q1 FY25, reflecting a significant drop in operational revenue.
- EBITDA: EBITDA for the quarter stood at ₹65.7 crore, a substantial 53.2% decrease YoY from ₹140.3 crore in Q2 FY24. The EBITDA margin also declined from 33.4% a year ago to 20.8%, indicating reduced profitability.
- Profit After Tax (PAT): PAT fell by 64.1% YoY to ₹32.0 crore, down from ₹89.1 crore in the same quarter last year. The company also saw a decline in Earnings Per Share (EPS) from ₹69.4 to ₹24.9.
Management Commentary
Neuland Laboratories’ leadership addressed the Q2 challenges, emphasizing that such quarterly fluctuations are part of the business’s inherent volatility. They remained optimistic about the long-term growth prospects, supported by strategic moves in customer acquisition and enhanced production capabilities.
Sucheth Davuluri, CEO of Neuland Laboratories, commented, “The results this quarter are below expectations, yet they align with our strategic forecast for FY25. Our focus is on sustainable long-term growth through expanding customer acquisitions, enhancing capabilities, and refining processes.”
Saharsh Davuluri, Vice-Chairman and Managing Director, added, “This quarter’s revenue was driven by key molecules in the CMS and GDS segments. With new manufacturing facilities and product launches, we are confident of strong growth in FY26 and beyond.”
Strategic Outlook
Despite the Q2 setbacks, Neuland Laboratories is focused on strengthening its foundation for future growth. The company aims to leverage additional facilities and production capacity expansions to support its growth trajectory. Management remains optimistic about medium- to long-term growth, with plans to capitalize on customer interest and early-stage projects.
Market Reaction
As of 1:35 PM, Neuland Laboratories shares were trading 13.42% lower at ₹13,730.00 on the NSE, reflecting investor concerns over the quarterly performance. Despite these short-term challenges, the company is committed to its strategic objectives, aiming for a rebound in the upcoming fiscal quarters.
