Balaxi Pharmaceuticals reports continued solid growth in Q3FY22

Revenue for the Pharmaceuticals grows by 31% in Q3FY22, with strong expansion in Gross Margins

Hyderabad, February 11, 2022: Balaxi Pharmaceuticals Limited (Balaxi), a branded IPR-based pharmaceutical company headquartered in Hyderabad, reported its results for the third quarter and nine-month ended 31^st December 2021.

Financial Highlights – Q3 FY22 & 9MFY22

·       Revenue: The Company reported strong growth in its Pharmaceuticals segment, with Revenue from this segment increasing by 31% YoY in Q3FY22. Overall Pharmaceuticals Revenue growth was witnessed across all geographies, led by Dominican Republic (46%), Guatemala (41%) and Angola (22%). The LATAM market demonstrated healthy growth traction in Q3FY22, with revenue share of 41% in Q3FY22 against c.35% in Q3FY21 in its Pharmaceutical segment.

·       Gross Profit: After experiencing raw material supply chain bottlenecks in H1FY22, the Company witnessed easing of such pressure in Q3FY22. Furthermore, with improving raw material prices and better product mix, the Company expects to expand its gross margin profile. It recorded a Gross Profit of INR 197 million in Q3 FY22, registering a 19.3% growth year-on-year.        

·       PAT: On the back of strong performance of Pharmaceuticals segment and higher gross margins, improving economies of scale helped the Company to report an increase in PAT of 11% YoY in Q3FY22.

Revenue Mix:

Gross Profit Breakup

·       For Q3FY22, the Pharmaceuticals business segment contributed 74% of the consolidated revenues and 86% of the total gross profit.

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·       The share of business conducted in Guatemala and The Dominican Republic increased during the quarter, which helped the Company in further strengthening its geographical spread.

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·       The product split between Branded & Generics remained stable at 28:72 in Q3FY22 indicating good growth potential for the Company’s branded products across all geographies. With newer registration across different geographies would further strengthen the product mix towards branded products.

Update on Pharmaceutical Product Registrations/Import Permits:

Other Highlights

i)          Consolidation: The Company further consolidated and strengthened its operations by consolidating Balaxi Healthcare (SU) LDA, Angola(BHA) by acquiring the balance 51% of the equity leading to a complete ownership and management control of BHA with Balaxi.

ii)        Vertical integration & Geographic expansion: Already making steady forays into the LATAM markets, the Company is preparing a roadmap for entering into regulated markets of Europe and North America via inhouse manufacturing of key products in the Pharmaceuticals segment. The Company recently completed the acquisition of land for its greenfield manufacturing facilities.

Commenting on the performance, Mr. Ashish Maheshwari, Chairman and Managing Director said,

“Despite a challenging macro environment in terms of raw material prices and availability, higher freight costs led by supply chain bottlenecks, I am pleased to report solid quarterly and nine months ended results. We strategically balanced the growth both in terms of volume and price hikes , generally led by passing on the higher costs .The Pharmaceuticals business remains our core strength and our results demonstrates it to be our major growth driver, with increasing revenue share coming in from recently entered geographies. Our Branded Consumer products segment, which inherits our strong customer reach and Brand visibility from our Pharma business, has been performing satisfactory during 9MFY22. With minor hiccups in that segment during Q3, we expect a rebound going ahead as well.

We were recently allotted 3.41 acres of land in the Pharma SEZ in Hyderabad, our first step in our plans for having our inhouse manufacturing facilities for catering to advanced regulated markets. We have appointed a reputed firm for complete consultancy for this project. They have already submitted their initial CBD report. We intend to establish a facility in compliance with EU norms.

Looking at specific markets, I am pleased to report good response from geographies such as the Dominican Republic and Guatemala, further contributing to our revenue growth. We continue to remain debt free and are focused on maximising stakeholder value. At Balaxi, we are confident about achieving our long-term growth aspirations and look forward to expanding into many other territories in the coming years.”