Gufic BioSciences has informed stock exchanges about receiving a GST penalty order totaling ₹15,64,052 from tax authorities for the period spanning FY2018-19 to FY2022-23. The pharmaceutical company disclosed this development under Regulation 30 of the SEBI Listing Regulations.

Penalty Details and Breakdown

The penalty order was issued by the Office of the Superintendent CGST, Range-07, Division II, Ghaziabad, under various provisions of the CGST Act, 2017, UPGST Act, 2017, and IGST Act, 2017. The total penalty comprises two distinct components related to different tax violations.

Nature of Alleged Violations

The tax authorities have imposed penalties on Gufic BioSciences for two specific violations:

1. A penalty of ₹15,35,080 for alleged excess Input Tax Credit claimed during the assessment period.
2. A penalty of ₹28,972 for short payment of tax liability.

Both penalties have been imposed under Section 74 of the CGST Act, 2017 and UPGST Act, 2017, read with Section 20 of the IGST Act, 2017, indicating the comprehensive nature of the tax assessment across different GST categories.

Company's Response and Next Steps

Gufic BioSciences has expressed its intention to contest the penalties. The company plans to file an appeal before the concerned authority, challenging the penalty order through proper legal channels.

Financial Impact Assessment

The company has assessed that the penalty order will have no material impact on its financial operations or other business activities. Based on prevailing law and counsel advice, Gufic BioSciences remains hopeful of achieving a favorable outcome at the next adjudicating authority or tribunal level.

This regulatory disclosure ensures transparency with stakeholders while the company prepares its legal response to challenge the imposed penalties through the appropriate appellate process.

Gufic BioSciences , a prominent player in the Indian pharmaceutical sector, has released its financial results for the first quarter, revealing a mixed performance marked by revenue growth and profit decline.

Revenue Growth Amidst Challenging Environment

The company reported a consolidated revenue from operations of ₹223.72 crore for Q1, representing a significant increase of 10.3% compared to ₹202.81 crore in the same quarter last year. This growth demonstrates Gufic BioSciences' ability to expand its market presence and drive sales despite challenging market conditions.

Profit Margins Under Pressure

Despite the robust top-line growth, Gufic BioSciences experienced a decline in profitability. The consolidated net profit for Q1 stood at ₹13.07 crore, down 37.3% from ₹20.86 crore in the corresponding quarter of the previous year. This reduction in profit can be attributed to several factors, including increased operational costs and market pressures.

Key Financial Metrics

Operational Highlights

The company's performance reflects its ongoing efforts to navigate a complex business environment. Key operational highlights include:

• Increased material costs, with the cost of materials consumed rising to ₹88.52 crore from ₹72.77 crore in the same quarter last year.
• Employee benefits expense grew to ₹36.00 crore, up from ₹29.05 crore, possibly indicating expansion of the workforce or increased compensation.
• Finance costs doubled to ₹9.23 crore from ₹4.62 crore, suggesting higher borrowing or debt levels.

Looking Ahead

As Gufic BioSciences moves forward, investors and analysts will be keen to see how the company balances its growth initiatives with cost management strategies. The pharmaceutical sector continues to offer opportunities, particularly in the post-pandemic landscape, and Gufic's performance in the coming quarters will be crucial in determining its trajectory in this competitive market.

Gufic BioSciences Limited continues to operate within a single business segment of pharmaceuticals, as noted in its financial statements. The company's focus remains on leveraging its strengths in this core area to drive sustainable growth and value for its stakeholders.