Concord Biotech Limited: Q3 & 9M FY25 Earnings Call

February 21, 2025 · 3 min read

Earnings Call Transcript Analysis Report #

Revenue: Q3 FY25 revenue stood at INR 244 crores compared to INR 240 crores in Q3 FY24, a 1% increase. 9 months FY25 revenue increased by 10% year-on-year to INR 770 crores (9 months FY24: INR 698 crores).
EBITDA: Q3 FY25 EBITDA stood at INR 98 crores with margins at 40.1%. EBITDA for 9 months FY25 stood at INR 315 crores, representing a growth of 6% year-on-year.
Profit After Tax (PAT): Q3 FY25 PAT stood at INR 76 crores with margins at 31.1%. PAT for 9 months FY25 stood at INR 231 crores as compared to INR 213 crores in the same period last year, a growth of 9% Y-o-Y.
API Revenue: Q3 FY25 API revenues stood at INR 176 crores against INR 172 crores in Q3 last year, a growth of 3% year-on-year (9.6% including interunit sales). API revenue in the 9 months of this year stood at INR 577 crores against INR 562 crores during the same period last year.
Formulation Revenue: Q3 FY25 Formulation segment stood at INR 67 crores. For 9 months FY25, revenues from the Formulation segment stood at INR 192 crores, up by 42% on a year-on-year basis.
Guidance: Long-term guidance of achieving a 25% CAGR growth over the next 5 years is maintained.
Margins: Long-term sustainable EBITDA margin guidance is in the range of 40% to 43%.

Product Expansion: Aim to introduce 8 to 10 additional products over the next 3 years, with a strong focus on oncology and anti-infectives.
CDMO Business: Seeing a growing number of inquiries and multiple RFQs being submitted. Now seen as a medium-term growth driver.
Investment in Palvella Therapeutics Inc.: Strategic investment of $1 million in compulsory convertible notes to pave the way for a strategic partnership focused on the manufacturing and commercialization of QTORIN.
Investment in CleanMax Private Limited: Acquiring a 26% equity stake in CleanMax to power Dholka plant with renewable energy.
Injectable Plant: Scheduled to begin commercial production in the current quarter.
Sustainability: Honored with the Sustainability Reporting Award from the Institute of Chartered Accountants of India.

Formulation Business: Gaining strong acceptance among customers across various regions.
Strategic Focus: Target domestic and emerging markets, leveraging expertise and market reach with an opportunistic approach for the regulated markets.
Global Presence: Goal to establish a strong global presence and achieve market leadership, targeting a sizeable global market share within the next 5 years.

Customer Procurement Patterns: “Customer procurement patterns may lead to lumpiness, with some quarters experiencing higher procurement than others.”
Calendar Year Closure: Formulation segment revenues were impacted due to calendar year closure for many global clients.

Growth Outlook: Positive outlook, in line with long-term guidance of achieving a 25% CAGR growth over the next 5 years.
Formulation Business Growth: Anticipate substantial growth in both product offerings and customer acquisition in the Formulation business.
CDMO Growth: CDMO is now seen as a medium-term growth driver.
Injectable Plant Revenue: Revenue generation from the injectable plant is expected to build up over the next financial year.

Revenue Growth: Analyst questioned if the current year growth guidance would be revised downward given the trailing 12-month revenues.
CDMO: Analyst questioned the CDMO contracts.
Capacity Utilization: Questions regarding the capacity utilization of all facilities.

Stable Performance: Pleased to report stable performance for Q3 FY ‘25.
Positive Outlook: Outlook remains positive, in line with long-term guidance.
Emphasis on Annual Assessment: “I would still emphasize to assess our financial results on an annualized basis rather than a quarterly one.”

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