Earnings Report /
Bangladesh

IBN SINA Pharmaceutical: Q1 FY22 – Earnings increased by c40% YoY driven by c37% sales growth

  • IBNSINA reported BDT 4.5 EPS (NPAT BDT 142mn) in Q1 FY22, implying c40% YoY growth

  • Revenue had 37% YoY growth because of higher sales of drugs to treat COVID symptoms and normalized doctor consultancy.

  • We updated our TP to BDT 370 (c7% higher) as we revised up 2022f revenue by c12% and eps by c8%.

Tanay Kumar Roy
Tanay Kumar Roy

Research Analyst

Shopnil Paul
Shopnil Paul

Research Associate

IDLC Securities
14 November 2021
Published by

IBNSINA reported BDT 4.5 EPS (NPAT BDT 142mn) in Q1 FY22, implying c40% growth over BDT 3.3 EPS (NPAT BDT 102mn) in Q1 FY21. The c40% growth in earnings is driven by c37% growth in top-line revenue and 31 bps improvement in opex to sales ratio.

Revenue reached BDT 2,365mn in Q1 FY22, implying c37% YoY growth. We think the growth in sales is driven primarily by two factors. Firstly, the sales of medicine to treat the COVID-19 symptoms increased when the number of cases spiked in mid Q1 FY22. In addition, the consumption of drugs for seasonal flu and fever increased.

Secondly, in wake of the novel virus, the doctor-patient consultancy was at 60%-70% of the normal level in Q1 FY21. This impacted the sales of prescription drugs. However, over the period of time, both doctors and the patients have overcome the fear of the novel virus and the doctor-patient consultancy has normalized now. As a result, the sales of prescription medicine has again picked up.

Gross margin was stable at 41.4% in Q1 FY22. However, the margin will be under pressure in the coming quarter due to the negative impact of global commodity price hike. As globally the price of oil has increased by c101% YoY (November 2021), the cost of packaging is likely to jack up in the next quarter.

Opex to sales ratio improved by 31bps because of the scale effect. In Q1 FY22, the opex to sale amounted to 32.0% which was 32.3% a year ago.

We updated our TP at BDT 370 (c7% higher) as we revised up 2022f revenue by c12% and eps by c8%. The updated TP implies 19.1x FY22 P/E, 1.4x FY22 EV/Sales and 10.9x FY22 EV/EBITDA. Currently, IBNSINA is trading at 16.1x LTM P/E.