Piramal Pharma Limited (NSE: PPLPHARMA) (BSE: 543635), today announced its consolidated results for the fourth quarter (Q4) and full year FY23 ended 31st March 2023.
Nandini Piramal, Chairperson, Piramal Pharma Limited said, “Over the recent years, Q4 has always been the strongest quarter for the Company in terms of revenue contribution and EBITDA margin. This year as well, we have seen a healthy pickup in our Q4 revenues and EBITDA margin compared to previous three quarters of the financial year.
Our CDMO business, which had a challenging year, witnessed significant pickup in order bookings in Q4. Our Inhalation Anesthesia portfolio continues to see a healthy demand and hence we are expanding our capacities. Our India Consumer Healthcare business is delivering good growth driven by our power brands.
We continue to maintain our quality track record with successful US FDA inspections – zero observations at Riverview and Digwal facilities, and EIR received for Lexington and Sellersville facilities. We believe in the potential of our businesses and our main focus over the next few months will be on capturing demand and executing them well, driving productivity through operational excellence and executing critical maintenance and growth capex.”
Key Business Highlights for Q4 and FY23
Contract Development and Manufacturing Organization (CDMO):
- Witnessed a significant pickup in order bookings in Q4 compared to the previous three quarters. The orders received during Q4 was a healthy mix of on-patent and generic product development and manufacturing.
- Continue to see good demand for our CDMO services in the niche areas of high potent API, peptide and anti-body drug conjugate. New capabilities / capacity expansion gone live at Riverview (US), peptide facility (Turbhe, India) and Ahmedabad PDS, witnessing healthy customer demand
- Expect to go live with expansion at our Grangemouth facility in H2FY24 which should help strengthen our position in the anti-body drug conjugate segment
- Maintained our quality track record – successfully cleared 4 US FDA inspections in FY23I. Zero observations at Riverview and Digwal andII. EIR* received from US FDA for Sellersville and Lexington facilities
- Development pipeline – Aim to continue discovering and developing new molecules for our customers and have a development pipeline of molecules across various stages of development
Complex Hospital Generics (CHG):
- Inhalation Anesthesia portfolio continues to see a strong demand in the US and non-US markets. We are accordingly expanding our capacities at Digwal and Dahej
- As per IQVIA MIDAS MAT® Sep. 2022 data, we are the leading player in Sevoflurane in the US with value market share of 39%
- Intrathecal portfolio in the US continued to command leading market share.
- Injectable Pain Management – Growth in FY23 impacted by supply constraints at our CMO. We are currently seeing improved traction in production
- Other Injectable – Launched 3 new products (10 SKUs) during FY23 in US and Europe
- Building pipeline of new products / SKUs which are various stages of development
India Consumer Healthcare (ICH):
- 26 new products and 37 new SKUs launched in FY23. New products launched since April 2020 contributed to 18% of total ICH sales in FY23
- Continue to invest in media and trade spends to drive growth in power brands
- Power Brands – Littles, Lacto Calamine, Polycrol, Tetmosol and I-range, grew by 37% YoY in FY23 and contribute to 42% of ICH sales
- E-commerce grew by more than 40% YoY in FY23 and contributed 16% to ICH revenues
- Wide distribution reach across general trade outlets and organised retail stores. Also presence across all leading e-commerce platforms
The Hon’ble NCLT, on 12th Aug’22, approved the composite scheme of arrangement for transfer by way of demerger of the Pharma business from Piramal Enterprises Ltd (PEL) into Piramal Pharma Ltd. and amalgamation of PPL’s wholly owned subsidiaries Hemmo Pharmaceuticals Pvt Ltd (HPPL) and Convergence Chemical Pvt Ltd (CCPL) into itself with an appointed date of 1st Apr’22.
Accordingly, the financial statements of PPL have been prepared giving effect to the scheme from 1st Apr’2022.
Financial statements of CCPL and HPPL, wholly owned subsidiaries of PPL have been combined as if the amalgamation had occurred on 1st April, 2021 or from the date on which the Company acquired control over these subsidiaries, whichever is later.
Prior to the demerger, PPL had entered into an arrangement with PEL for continued onward sale by PEL, of products under Government tenders that were obtained in the name of PEL, till obligations under these tenders were fully met. The agreement also included sale of PPL’s Consumer products (OTC) through PEL’s CFA (Carrying and Forwarding Agent) network till all requisite licenses, registrations, permits were fully transferred in the name of PPL.
In accordance with the scheme the demerger of pharma undertaking has been considered as non-common control transaction and accounted as business combination as per Ind-AS 103 in the financial statements of PPL w.e.f 1st Apr’22. Accordingly, the financial results for FY23 are not comparable with corresponding previous period. Like-to-Like financials are as shown in the table below.
Also, all the closing inventory as on 31st Mar’22 at PEL, in respect of such transactions included the margin element charged by PPL to PEL on arm’s length basis. Since the demerger is effective 1st Apr’22, the opening inventory transferred to PPL at fair value (provisional) as per IND-AS included the margin element and the same has been charged to the P&L in Q1FY23 of PPL financial statements, on sale of such products in PPL.
The one-time, non-recurring impact on EBITDA of this inventory margin in Q1FY23 financial statements is INR 68Cr.
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