BENGALURU (Reuters) – India’s Zydus Lifesciences Ltd reported its smallest profit in 14 quarters, hurt by a goodwill impairment charge and costs related to shutting operations at one of its manufacturing units.
The pharmaceutical company reported a 25% fall in its fourth-quarter consolidated net profit to 2.97 billion rupees ($36.32 million), its smallest profit since the second quarter of fiscal 2019.
Zydus Lifesciences said it had a one-time expense of 6.01 billion rupees due to an impairment charge at its U.S. unit Sentynl Therapeutics Inc and costs related to ceasing operations at a manufacturing facility of its unit Zydus Wellness Products Ltd.
However, total profit before exceptional items, tax and share of profit from joint ventures surged 90% to 10.87 billion rupees on strong demand sentiment in the pharmaceutical sector.
Zydus Lifesciences’s earnings before interest, taxes, depreciation and amortisation (EBITDA) margins climbed more than 25% from 18.9% a year ago.
Its total revenue from operations grew 31.6% to 50.11 billion as sales surged.
Sales from its U.S. drugs segment, accounting for 46% of overall sales, surged 58.3%, while its India drugs business, which had a 26% contribution, rose nearly 11%.
Revenue from Zydus’s pharmaceuticals segment, which accounted for 85% of its total revenue in the quarter, grew 35.5% year-on-year to 43 billion rupees.
The company’s total expenses, however, rose 19.6% as input costs climbed 11.3%.
The Ahmedabad-based company recommended a final dividend of 6 rupees per share.
Zydus Wellness, the parent company’s unit manufacturing consumer wellness products, reported a drop in its fourth-quarter profit margins on Wednesday on higher costs.
Zydus Lifesciences shares closed 2% lower on Thursday after the results. They gained 17% in the March quarter, comfortably outperforming the Nifty pharma index which declined 4.6%.
($1 = 81.7800 Indian rupees)
(Reporting by Biplob Kumar Das in Bengaluru; Editing by Janane Venkatraman)