Citi Pharma (CPHL) announced its 1QFY25 result today. The company recorded earnings of Rs201mn (EPS of Rs0.88), up 114% YoY and 32% QoQ. The result was higher than expected due to higher-than-expected net sales. CPHL’s net sales increased by 19% YoY and 12% QoQ to Rs3.2bn in 1QFY25. This improvement is primarily due to an increase in API volumetric sales and the addition of new formulation products, as per our channel checks.

§  However, average Paracetamol prices remained similar to the last quarter, ranging between Rs1,200-1,300 per Kg in 1QFY25.

§  The company also recorded improved gross margins of 13% in 1QFY25, compared to 9% in 1QFY24 and 8% in 4QFY24. This improvement is primarily due to a shift in the sales mix from API to the higher-margin formulation segment.

§  Distribution expenses in 1QFY25 increased by 5% YoY while down 46% QoQ to Rs41mn due to inflationary effects.

§  Finance cost declined by 26% YoY and 35% QoQ to Rs65mn in 1QFY25 due to lower interest rates and borrowings.

§  Effective tax rate clocked in at 41% in 1QFY25 as compared to 43% in 1QFY24 and 7% in 4QFY24.

§  We have buy stance on CPHL, with the stock currently trading at a FY25E PE ratio of 8.4x.  

Courtesy – Topline Pakistan Research