FEROZ gears up for vaccine facility, expects strong growth

November 25, 2023 (MLN): Ferozsons Laboratories Limited (PSX: FEROZ) is all set for a game-changing move with its forthcoming vaccine facility set to be operational by the end of 3QFY24, indicating a promising boost in FY25, the management of the company disclosed this during the corporate briefing session on Friday.

Expecting an initial uptick in depreciation charges, the company predicts a considerable contribution margin of around 40%-50% from this groundbreaking project.

Despite the prevailing macroeconomic uncertainties, the company's management maintained a firm confidence in sustaining upward momentum in revenue.

Committed to prioritizing patients’ well-being, FEROZ aims to set its market leadership, leveraging its expanding global footprint across 30+ countries.

Particularly, with a focus on export growth, the company's drive aligns with the national goal of boosting foreign exchange reserves.

The management also informed the house that the company is carrying inventory for the next 4-5 months to prevent it from currency devaluation and unexpected regulatory issues such as LC restrictions.

The management also apprised the house regarding the sales mix. The devices segment contributes around 35% of total sales while the remaining 40% is covered by essential drugs.

To diversify its energy mix, the company has successfully installed a 1MW solar power plant.

Regarding financial performance, the management highlighted that the company's consolidated net sales closed at Rs 11.5 billion in 2023, depicting a growth of 23% over the last year.

On a standalone basis, the company's net sales closed at Rs9.9bn, representing a growth of 27% over the last year.

In-market generic sales grew by 14%, whereas institutional sales of generics and medical devices increased by 43%. Furthermore, export sales grew 98% over the last year.

The company's gross margin stands at 39%, compared to 45% during the same period last year. The decrease in GP margin primarily reflects the change in sales mix and increased input costs of products due to the significant devaluation of the local currency.

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