Shilpa Medicare - Weak Q3 Performance; Warning Letter Is An Overhang: ICICI Securities

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ICICI Securities Report

Shilpa Medicare Ltd. reported Q3 FY21 results below our estimates due to lower formulations revenue on account of remediation activities at manufacturing unit.

Revenue declined 19.3% YoY to Rs 1.9 billion (our estimate Rs 2.7 billion), Ebitda margin dropped 2010 basis points YoY to 11.0% (our estimate 24.8%) on high base and lower revenue and adjusted profit after tax was down 86.1% to Rs 77 million.

Formulations revenue was down 58.2% QoQ to Rs 343 million as there was temporary shutdown of manufacturing.

The company is implementing the remedial measures post warning letter and has engaged a third party consultant for the same.

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