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Systematix Research Report
Orchid Pharma Ltd.’s reported revenue (Rs 2444 million up 33.6% YoY and 12.6% QoQ) was higher than expectations (7% higher), but Ebitda was slightly lower than expectations ( -3%) owing to lower gross margins and higher employee costs (up 25% QoQ).
Steep increase in Employee costs is attributable to incremental hiring towards their initiative on building a branded formulation business in India. Going forward (FY25 and FY26) we expect the strong revenue growth traction (20 to 30% YoY) to sustain:
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Ramp up in capacity utilization of the new sterile block – Currently at 50%,
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Commercialization of new block for oral API (rejig of an old block) – Can help the company meaningfully add to existing revenue base.
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Ramp up in the newly launched branded formulation business,
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Royalties from global commercialisation of Enmetazobactam,
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Merger with Dhanuka labs -Cost and revenue synergies,
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Potential of an improved geographic mix (higher regulated market contribution) can augment revenue growth and margins too.
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