Bajaj Healthcare zooms 20%, hits new high on strong June quarter results

Ebitda margin improved to 18.77 per cent from 10.23 per cent in the previous year quarter

Shares of Bajaj Healthcare zoomed 20 per cent to a new high of Rs 498.35 on the BSE on Tuesday after the company reported a five-fold jump in net profit at Rs 15.29 crore in the June quarter (Q1FY21), on the back of strong revenue growth. The pharmaceutical company had posted profit of Rs 3.24 crore in the year-ago quarter.

The company’s revenue from operations during the quarter under review grew 52 per cent to Rs 140 crore against Rs 92 crore in the corresponding quarter of previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin improved to 18.77 per cent from 10.23 per cent in previous year quarter.

Rating agency Crisil has ‘positive’ outlook on Bajaj Healthcare, as it expects improvement in business risk profile over the medium term. According to Crisil, healthy demand, better realisations coupled with wider product portfolio through acquisitions and enhanced capacities, should result in higher revenue and profitability.

Demand for key products of the company such as Ascorbic acid (Active pharmaceutical ingredient for Vitamin C) and CH Base (raw material for manufacturing sanitiser) have exhibited substantial improvement amidst Covid-19 pandemic. Further, the manufacturing operations were not much impacted by lockdown and other measures taken by central and state governments to contain the spread of the Covid-19, since the company operates in the essential segment. Timely commencement of newly acquired capacities and sustenance of revenue growth and profitability shall remain key rating sensitivity, the rating agency said.

In the past three months, Bajaj Healthcare's stock has rallied 91 per cent, as compared to 17 per cent rise in the S&P BSE Sensex.

At 10:25 am, the stock was trading 12 per cent higher at Rs 465, against 0.35 per cent gain in the benchmark index. The trading volumes on the counter jumped four-fold with 112,000 shares changing hands so far on the BSE.