GMM Pfaudler’s Q3 results: Profit surges 10% on the back of increased orders from pharma industry

GMM Pfaudler's Q3 results: Profit surges 10% on the back of increased orders from pharma industry

Mumbai: Process equipment maker GMM Pfaudler reported double-digit growth in revenue and profits during the December quarter on the back of increased demand for its equipment as pharmaceuticals and chemicals companies invest in building domestic manufacturing capabilities.

The company clocked consolidated revenue of Rs 202 crore during the three-month period, a year-on-year growth of 30%. Consolidated profit grew by 10% on-year to Rs 23 crore while earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 38% to Rs 42 crore.

Ebitda margin improved 124 basis points to 20.8%. One basis point is 0.01%.

The stock of GMM Pfaudler ended 2.93% higher at Rs 3,865.5 per share on the BSE on Wednesday. The earnings were announced after market hours.

The company is expecting the growth momentum to carry into the coming quarters as it completes the acquisition of its parent Pfaudler Group, allowing it entry into newer markets as well as other allied industries.

“Pharmaceutical companies are building local capacities to reduce dependence on China, which helps our business,” Tarak Patel, managing director, GMM Pfaudler told ET over the phone. “There is resurgence in the pharmaceutical side of the business similar to what we have been seeing for chemicals for the last 3-4 years.”

The company sells glass-lined equipment for the pharmaceutical and chemical industries as well as heavy engineering products.

It’s recently acquired facility in Hyderabad and two newly-commissioned gas furnaces in Gujarat started production during the quarter, adding to the volumes, Patel said.

As the company completes the integration with parent Pfaudler Group, it will gain entry into several new markets which it could not previously enter due to agreements. It will also gain access to new technologies from the parent that will help it enter other allied industries in India, according to Patel. The deal should be completed within the next one month, he said.

The company expects minimal impact on margins from the high commodity prices given a six-to-seven-month lag between purchase of steel and shipping of finished goods. It will pass on the higher material costs to customers, Patel said.

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