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Neuland Laboratories' strong Q2FY24 performance was driven by the CMS vertical, which grew 43% YoY.

Neuland Laboratories Limited, a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and custom manufacturing solutions services to customers located in around 80 countries, today announced financial results for the second quarter and half year ended September 30, 2023.

Company Result

The company reported record-breaking quarterly revenue of Rs 420.8 crore, marking an impressive 43.2 per cent year-over-year growth. Equally impressive were the EBITDA figures, which surged by 102.2 per cent YoY to reach Rs 140.3 crore, resulting in a remarkable EBITDA margin of 33.4 per cent, up by 980 basis points from the previous year. The company's profits also soared, with a Profit After Tax (PAT) of Rs 89.1 crore, showing an astounding 132.3 per cent YoY increase and a PAT margin of 21.2 per cent, up 820 basis points from the previous year. These stellar financial results underscore the company's strong growth and efficiency in an increasingly competitive market.

Management Commentary

Commenting on the performance, Mr. Sucheth Davuluri, Vice-Chairman and Chief Executive Officer of the Company said, "We are pleased to report record quarterly revenue of Rs 421 crores. The YoY revenue growth of 43 per cent driven by the CMS vertical is a culmination of the efforts we have put in over several years. The EBITDA margin of 33.4 per cent therefore is a result of not only the revenue momentum but also a shift towards high margin business. We continue to have good visibility from both businesses and are focussed on executing according to our strategic plan."

In addition, Mr. Saharsh Davuluri, Vice Chairman and Managing Director, Neuland Labs added, "The CMS business continues to grow on the back of both development and commercial projects in line with our expectations. Even as the external funding environment is tight, our pipeline of CMS projects is evolving as we have doubled the number of P-2 projects over the last year. We will continue to invest in our capacities and capabilities in line with our commitment to serve customers with agility."

Insights to Focus On

Neuland Laboratories, in an impressive Q2FY24 performance, has seen a remarkable 43 per cent year-on-year growth in its Contract Manufacturing Services (CMS) vertical, propelling the company's EBITDA margin to a substantial 33.4 per cent, a remarkable 980 basis points increase YoY. This remarkable progress can be attributed to both higher revenues and a strategic shift towards high-margin business. With a promising outlook from both its business segments, Neuland Laboratories is steadfastly focused on executing its strategic plan. Furthermore, the company's CMS pipeline is rapidly evolving, with the number of Phase-2 projects doubling in the past year, highlighting its commitment to innovation and growth. Neuland Laboratories remains dedicated to further investments in enhancing its capacities and capabilities, ensuring agile and efficient customer service in the future.

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The stock has broken out above the resistance level at Rs. 4,180.00. This suggests that the uptrend is likely to continue. The stock is trading above its 50-day and 200-day moving averages. This is a bullish signal.

Over the past five years, the stock has delivered an extraordinary return of 755.52 per cent, solidifying its status as a multibagger stock that has generated substantial wealth for its shareholders, surging by an impressive 5,000 per cent over the course of its existence.

Disclaimer: The article is for informational purposes only and not investment advice.