Morepen Labs' Q4 net profit declines 29 pc as rising expenses weigh on margins

IANS May 12, 2025 234 views

Morepen Labs reported a challenging fourth quarter with a 29.3% decline in net profit despite a 10.1% revenue increase. Rising operational expenses, particularly in material consumption and employee benefits, significantly impacted the company's financial margins. The pharmaceutical firm's EBITDA dropped by 12.6%, falling to Rs 42.3 crore compared to the previous year. Despite these challenges, the company maintains its strategic direction and has proposed a final dividend of Rs 0.20 per share, pending shareholder approval.

"Total expenditure increased by 15.5%, challenging our quarterly margins" - Morepen Labs Financial Report
Mumbai, May 12: Pharmaceuticals company Morepen Labs on Monday reported a decline of 29.3 per cent in its net profit (year-on-year) for the fourth quarter (Q4) of FY25, as rising expenses took a toll on the healthcare company's performance.

Key Points

1

Revenue grows 10.1% to Rs 465.8 crore

2

Net profit declines to Rs 20.3 crore

3

Material costs surge 21.89%

4

EBITDA drops 12.6%

The net profit for Q4 stood at Rs 20.3 crore, down from Rs 28.7 crore in the same period last fiscal, according to its stock exchange filing.

The company’s total revenue increased by 10.1 per cent, reaching Rs 465.8 crore in Q4, compared to Rs 423 crore in the year-ago period.

Despite this growth in revenue, operating costs surged, which led to a decline in profitability.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) also saw a drop of 12.6 per cent, standing at Rs 42.3 crore for the quarter, compared to Rs 48.4 crore in Q4 of FY24.

As a result, the margin for Q4 stood at 9.1 per cent, lower than the 11.4 per cent reported in the same period last financial year.

Total expenditure for Morepen Labs in Q4 increased by nearly 15.5 per cent, reaching Rs 444.7 crore, up from Rs 385.1 crore in the corresponding period last fiscal.

A significant factor contributing to this increase was the rise in the cost of material consumed, which surged by approximately 21.89 per cent, from Rs 220.2 crore to Rs 268.4 crore.

Employee benefits expenses also rose by about 19 per cent, reaching Rs 57 crore in Q4, compared to Rs 47.9 crore during the same period last financial year.

Additionally, depreciation and amortisation expenses saw a sharp increase of 71.56 per cent, rising from Rs 9.6 crore in Q4 FY24 to Rs 16.47 crore in Q4 FY25.

Additionally, the Board of Directors has recommended a final dividend of Rs 0.20 per share for the financial year ended March 31.

However, the dividend is subject to approval by shareholders at the upcoming Annual General Meeting (AGM).

Reader Comments

R
Rahul K.
Not surprising given how raw material costs have been rising across industries. Pharma companies especially are feeling the pinch with API prices going up. Hope Morepen can optimize their supply chain better in coming quarters. The dividend is at least some positive for shareholders.
P
Priya M.
29% profit decline is quite steep! 😟 The revenue growth is good but what's the point if expenses are eating into profits? The 71% jump in depreciation costs seems abnormal - management should explain this properly to investors.
S
Sanjay V.
As someone who's followed Morepen for years, this quarter looks like growing pains. Their R&D investments and capacity expansions will pay off in long run. The Indian pharma sector needs companies willing to spend on future growth rather than just short-term profits.
A
Anjali T.
The employee cost increase shows they're retaining talent, which is crucial in pharma. But material costs up 22% is worrying - hope this isn't a sign of more price hikes for essential medicines coming our way. Government should monitor these input cost trends.
K
Kiran P.
Mixed bag results. On one hand 10% revenue growth is decent, but margins down to 9% from 11% shows inefficiency. Maybe time to re-evaluate their product mix? The 20paisa dividend is just tokenism - would prefer they reinvest that money properly.

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