Zenotech Laboratories Limited , a pharmaceutical company, has released its unaudited financial results for the second quarter and half-year ended September 30, 2023, showing a mixed performance with revenue growth but a net loss for the quarter.

Revenue and Profitability

The company reported a significant increase in revenue from operations for Q2 FY2024, reaching Rs. 1,023.19 lakhs, up from Rs. 874.60 lakhs in the same quarter of the previous year, marking a 17% year-over-year growth. For the half-year, revenue stood at Rs. 1,887.10 lakhs, compared to Rs. 1,764.09 lakhs in the corresponding period last year.

Despite the revenue growth, Zenotech faced challenges in profitability. The company reported a loss of Rs. 83.65 lakhs for Q2 FY2024, contrasting with a profit of Rs. 134.74 lakhs in Q2 FY2023. For the half-year, however, the company managed to remain profitable with a modest gain of Rs. 15.30 lakhs, though significantly lower than the Rs. 263.71 lakhs reported in the same period last year.

Financial Highlights

Balance Sheet and Cash Flow

As of September 30, 2023, Zenotech's total assets stood at Rs. 11,092.39 lakhs, with a strong cash position of Rs. 3,160.98 lakhs in cash and cash equivalents. The company's total equity was reported at Rs. 9,627.20 lakhs, indicating a solid financial foundation.

Other Key Developments

Tax Adjustments

The company has opted for a concessional rate of income tax under section 115BAA(5) of the Income Tax Act 1961 for the Assessment Year 2023-24. This resulted in accounting adjustments of Rs. 190.49 lakhs in the current reporting period.

Export Obligations

Zenotech has successfully settled liabilities related to export obligations under the Advance Authorization and EPCG scheme, resulting in a reversal of excess provision of Rs. 4.97 lakhs, reported as an exceptional item.

Segment Reporting

The company continues to operate in a single reportable segment: Pharmaceuticals.

Management Commentary

While specific management comments were not provided in the financial release, the results suggest that Zenotech is experiencing growth in its core operations, as evidenced by the increase in revenue. However, the company faces challenges in maintaining profitability, possibly due to increased expenses or market pressures.

The board meeting to approve these results was held on October 31, 2023, demonstrating the company's commitment to timely financial reporting and transparency with its stakeholders.

Investors and analysts will be watching closely to see how Zenotech navigates the current market conditions and works towards improving its bottom line in the coming quarters.

Zenotech Laboratories Limited , a pharmaceutical company, has released its unaudited financial results for the first quarter. The company also announced the appointment of new statutory auditors, marking a significant change in its financial oversight.

Financial Performance

Zenotech Laboratories reported a total income of Rs 1,023.16 lakhs for Q1, remaining relatively stable compared to Rs 1,024.96 lakhs in the same quarter last year. The company's revenue from operations stood at Rs 863.91 lakhs, showing a slight decrease from Rs 889.49 lakhs in Q1 of the previous year.

The company's net profit for the quarter decreased to Rs 98.96 lakhs from Rs 128.97 lakhs in the corresponding quarter of the previous year, representing a 23.27% decline. Consequently, the earnings per share (EPS) also decreased to Rs 0.16 from Rs 0.21 in the same period last year.

Operational Highlights

Zenotech Laboratories operates solely in the pharmaceuticals segment. The company's other operating income is derived from rentals for the biotech facility and equipment leased to Sun Pharmaceutical Industries Limited.

Appointment of New Statutory Auditors

In a significant development, the Board of Directors has approved the appointment of M/s. G S K A & Co. (Firm Registration No. 147093W) as the new statutory auditors of the company. This appointment is for a term of five consecutive years, starting from the conclusion of the 36th Annual General Meeting (AGM) to the conclusion of the 41st AGM, subject to shareholder approval.

The change in auditors comes as M/s. PKF Sridhar & Santhanam LLP completes their two consecutive terms as the company's statutory auditors.

Annual General Meeting

Zenotech Laboratories has scheduled its 36th Annual General Meeting for September 26 at 10:30 A.M. IST.

Looking Ahead

While Zenotech Laboratories has maintained a stable total income, the decrease in net profit and EPS indicates potential challenges in the current fiscal year. The company's focus on its pharmaceutical segment and its ongoing relationship with Sun Pharmaceutical Industries Limited for R&D activities may play crucial roles in its future performance.

The appointment of new statutory auditors also marks a new chapter in the company's financial oversight, potentially bringing fresh perspectives to its audit processes. As Zenotech Laboratories navigates the competitive pharmaceutical landscape, investors and stakeholders will be keenly watching how these changes and the company's strategies unfold in the coming quarters.