Renata posts 37% Q1 profit growth on lower finance costs, export gains

Consolidated revenue rises 11% to Tk1,260 crore, while a Tk521 crore reduction in gross debt helps cut net financing costs by 35%.

Renata PLC achieved its earnings momentum in the first quarter of FY27 (July–September), delivering a 37% year-on-year increase in consolidated net profit to Tk102 crore despite persistent cost pressures and pricing constraints.

On a standalone basis, the pharmaceutical firm reported a 45% surge in net profit to Tk98 crore during the quarter, according to the company’s statement.

Consolidated revenue expanded 11% to Tk1,260 crore from Tk1,131 crore in the corresponding period of the previous fiscal year, while standalone turnover grew 12% to Tk1,250 crore.

The top-line growth was primarily volume-driven across core business segments. Domestic pharmaceutical sales grew 8.6% to Tk991 crore, animal health revenue rose 10% to Tk197 crore, and contract manufacturing surged 102% to Tk65 crore.

International exports, including contributions from overseas subsidiaries, jumped 59% to Tk109 crore, reflecting expanding market penetration, it reads.

Gross profit rose 12.7% as revenue growth outpaced the 10.5% increase in cost of sales. Operating efficiency was supported by disciplined procurement and controlled factory overhead growth, which was contained at 5.4%.

Cost of sales saw a slight relative increase due to shifts in product mix, notably higher low-margin, tender-driven contract manufacturing sales.

Renata achieved a major debt deleveraging during the quarter, reducing its gross debt by Tk521 crore from Tk2,004 crore to Tk1,483 crore.

Accounting for cash balances and fixed deposit receipts totaling Tk398 crore, the company’s net debt currently stands at Tk1,085 crore. This debt reduction, coupled with reduced foreign exchange losses and prudent working capital management, drove a 35.2% decline in net financing costs.

Key per-share metrics reflected strong fundamental health. Consolidated earnings per share rose 37% to Tk8.87 for Q1 FY27, while net operating cash flow per share surged 74% to Tk21.98. Net asset value per share rose 3% to Tk339.31.

Looking ahead, Renata noted that the operating environment remained challenging due to geopolitical conflicts, energy supply volatility, and domestic utility cost hikes.

Source: The Business Standard