AMI Organics’ Q2 gross profit Rs708 Mn

H1FY24 Revenue from Operations up 17.3% YoY to Rs3,260mn, H1FY24 EBITDA up 15.2% YoY at Rs 588mn

Naresh Patel, Executive Chairman & Managing Director, Ami Organics

FinTech BizNews Service   

Mumbai, November 9, 2023: Ami Organics Limited (AMI) (BSE: 543349, NSE: AMIORG), a leading  global manufacturer of advance pharmaceutical intermediates and specialty chemicals, today announced financial results for the quarter and half year ended September 30, 2023.

Consolidated Financial Results – Q2 & H1 FY24

Commenting on results, Mr. Naresh Patel, Executive Chairman & Managing Director, Ami Organics Limited, said: “I am pleased to report a 17% YoY growth, with a revenue from operations of Rs. 172 crores for the quarter, despite facing downward pricing pressures. Even as we navigated the low demand landscape and delivered growth, our margins took a hit this quarter driven by high pricing pressure and higher sales of low margin products. Still, our strong order book point to a robust second half of FY24.

On the business front, Advance Pharmaceutical business delivered steady growth of ~8% YoY, even as for one product, a global customer delayed the launch in certain markets impacting our growth for the quarter. Further extending our relationship with Fermion, we have signed one more contract for Advanced Intermediates for their product taking total products under the CDMO contract to 3, enhancing revenue visibility for the coming years.

On the Specialty chemicals side, we delivered strong 72% growth YoY, driven by robust volume. The launch of a new UV Observer product is set to enhance our portfolio, contributing to our financials from Q3 FY24. In our commitment towards sustainability and operational cost reduction, the board has approved investment in a 16 MW solar power plant which along with already work in progress 5 MW solar power plant will nullify our electricity expense once fully operational.

Deferment in product launch in certain markets by a global customer coupled with pricing pressure due to oversupply from China is expected to have some impact on the numbers and even though we are expecting to deliver robust H2 FY24, overall, we are modifying our growth target from 22-25% for the full year to 18-22% growth for FY24.” 

Key Results Highlights (Q2 FY24 Consolidated):

• Revenue from operations for Q2FY24 grew by 17.3% YoY to Rs. 1,724 mn
• The Gross margin for the quarter was at 41% as compared to 48% in Q2FY23. Lower gross margins were on account of high price erosion and higher sale of low margin products
• EBITDA for the quarter came at Rs. 248 mn down 11.8% YoY compared to Rs. 281 mn in Q2FY23
• EBITDA margin for the quarter was at 14.4% as compared to 19.1% in Q2FY23, De-growth of 470bps was on account of gross margins as well as higher employee cost, which was driven by annual increments, ESOP and hiring for Ankleshwar unit
• Adjusted PAT for the quarter was Rs. 147 mn, down 22.6% YoY as compared to Q2FY23.
• Board of Directors on recommendation of Audit committee decided to fully impair the existing investment of Company, in the joint venture Ami Oncotheranostics LLC, as it is presumed that revenue generation from Ami Oncotheranostics will take significant time considering the inherent nature of its research activity in terms of longer gestation period and uncertain success rate. The same has been shown as exceptional item in the profit and loss statement for the period April 2023 to September 2023. Since entire investment value is impaired, consolidated results does not include financial numbers of Joint Venture.

Key Business highlights:

• Export at 54%; domestic business at 46%
• Advance Pharmaceutical Intermediates

Fermion contract:

• Signed a new contract for additional advanced intermediate taking total product under CDMO contract to 3 products
• On track to start the production from Q4FY24 onwards from Ankleshwar Unit

Specialty Chemicals

• Received orders for a UV Observer product used in Paint Industry. Expect commercial production to start from Q3FY24

Electrolyte additives update

• Advanced stages of negotiation of contract with couple of customers.

Capex Update

• Machinery installation in progress in block-1 at Ankleshwar unit
• Started the recruitment process for the new facility. On track to commence the production activity in Q4FY24

Baba Fine Chemicals Acquisition Update

• Completed acquisition of majority partnership stake in Baba Fine Chemicals during the quarter