Shilpa Medicare tumbles 5% as March quarter performance disappoints

Shares of Shilpa Medicare tumbled 5 percent in the early trade on May 26, bogged down by the pharma company’s disappointing earnings in the March quarter of the financial year 2022-23.

The drug maker posted a net loss of Rs 8.1 crore in the fourth quarter against a net profit of Rs 29.5 crore in the same period of the previous fiscal.

This was on the back of a 22.6 percent on-year decline in revenue to Rs 263.6 crore from Rs 340.6 crore in the year-ago period. The weak topline can be attributed to pricing pressure and a de-growth in the oncology and CRAMs (Contract Research & Manufacturing Services) segments.

Pricing pressure also dented the company’s operational performance as the EBITDA (earnings before interest, taxes, depreciation, and amortization)? margin contracted sharply to 14.5 percent from 21.6 percent in Q4 of FY22.

At 10.33 am, Shilpa Medicare was trading at Rs 236.50 on the National Stock Exchange, down 3.29 percent from the previous close. Trading volumes also shot up as two lakh shares changed hands on the exchanges against the average traded volume of one lakh in the previous session.

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The management said it anticipates pressure in the form of lower pricing from key products to continue but assured investors that it was engaged in mitigating this through more efficient manufacturing and focus on complex products, where it has a specific advantage.

The stock has underperformed in recent times, giving negative returns in the past one as well as three-year periods. Much of the weakness in the stock is due to its poor financial performance. The company has reported net losses in three out of the four quarters in FY23.

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