Gujarat Terce Laboratories Reports Net Loss Despite Revenue Growth, Settles Tax Disputes

Gujarat Terce Laboratories Limited , a prominent player in the pharmaceutical sector, has reported mixed financial results for the fiscal year. While the company achieved revenue growth, it faced a significant net loss due to the settlement of long-standing tax disputes.

Revenue Growth and Operational Performance

The company reported a total revenue of ₹50.20 crore, marking a 3.93% increase from ₹48.30 crore in the previous year. This growth was primarily driven by a 4.58% rise in sales, which reached ₹50.20 crore compared to ₹48.00 crore in the previous fiscal year.

Gujarat Terce Laboratories demonstrated improved operational efficiency, with its EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) surging to ₹3.89 crore, a substantial 143.12% increase from ₹1.60 crore in the previous year. The EBITDA margin expanded significantly from 3.31% to 7.75%, reflecting enhanced profitability at the operational level.

Tax Settlement Impact on Profitability

Despite the positive operational performance, the company reported a net loss of ₹0.98 crore, compared to a profit of ₹0.24 crore in the previous year. This loss was primarily attributed to a one-time provision of ₹3.42 crore for settling tax disputes under the Direct Tax Vivaad se Vishwas scheme for assessment years 2010-14.

The company's decision to settle these long-standing tax disputes is expected to remove uncertainties and provide a cleaner financial slate for future growth.

Financial Position and Debt Reduction

As of the latest reporting date, Gujarat Terce Laboratories reported total assets of ₹22.80 crore, a slight decrease from ₹23.30 crore in the previous year. The company's balance sheet showed improvements in liquidity management:

1. Current assets increased to ₹12.00 crore from ₹11.20 crore.
2. Current liabilities rose marginally to ₹12.60 crore from ₹12.10 crore.
3. The company significantly reduced its reliance on debt, with the debt-to-equity ratio improving from 0.54 to 0.15.

Operational Highlights

Gujarat Terce Laboratories made notable progress in several operational areas:

1. The company achieved zero borrowing in Q4 through internal accruals, demonstrating improved cash flow management.
2. Inventory turnover ratio improved to 13.10 from 11.40, indicating more efficient inventory management.
3. Trade receivables turnover ratio increased to 9.35 from 7.03, suggesting better collection practices.

Future Outlook

Despite the current year's net loss, Gujarat Terce Laboratories' improved operational metrics and debt reduction efforts position it for potential growth. The company continues to focus on its core strengths in the pharmaceutical sector, with over 125 products across 64 brands, primarily in the branded generics segment.

The 40th Annual General Meeting of the company is scheduled for August 21, 2025, where shareholders will have the opportunity to discuss the company's performance and future strategies.

As Gujarat Terce Laboratories moves forward, investors and stakeholders will be watching closely to see how the company leverages its improved operational efficiency and cleaner financial position to drive growth in the coming years.