Medical devices and chemicals manufacturer Morepen Laboratories reported a strong increase in revenue and profitability, as demand for its home diagnostic equipment such as glucose meters shot up in the aftermath of the COVID-19 pandemic.
The company’s revenue for the Jul-Sep period jumped by 17% on year to Rs 398 cr, while net profit jumped to Rs 47 cr, up 70% on year.
The growth was primarily contributed by domestic market sales, with India revenues up 30% compared to the overall growth of 17%. India revenues comprised Rs 276 cr out of the total Rs 398 cr of revenue.
The biggest growth spurt came in its medical devices business, which saw a jump of 36% in revenues in a matter of just three months. For the quarter, the medical devices was Rs 123 cr, up 36% from the preceding Apr-Jun period.
Devices now contribute 31.2 percent of the revenue, up from 27.3 percent during the same period last year.
Many Indians have switched to home testing for blood sugar, blood pressure and so on to avoid the risk of contracting COVID-19, leading to strong sales of home diagnostic kits.
Blood Glucose Meters grew by 45 percent to Rs. 83.68 crores during the quarter. Sales of blood pressure monitors jumped 44 percent to Rs. 28.62 crores. It sold 90 million glucose strips during this quarter.
Domestic sales also benefited from increased demand for formulations (medicines).
The company also benefited from supply disruptions in China, the world’s largest supplier of basic chemicals used by drug makers, known as APIs or active pharmaceutical ingredients.
The API business continued to be the largest for the company, contributing Rs 201 cr for the three months, and saw a growth of 9% compared to last year.
“Atorvastatin and Fexofenadine exports for the quarter grew by 33 percent and 88 percent respectively. Montelukast domestic revenues has doubled during the current quarter, recording an increase of 109 percent in its Q2 revenues,” the company said.
The company said it plans to rapidly expand its API manufacturing operations.
“With massive increase in API demand globally and more particularly with frequent supply disruptions from China, we are putting our expansion plans for API on fast track.
“We have planned to treble the API capacity from present 310 KL to 1000KL in the coming 24 months at the same site in Baddi (HP) within the same plant and at the additional land adjoining the site for which all approvals are in place. We are very bullish on this expansion to capture this large spurt in demand APIs globally. The new capacities are also required to serve the new generic market opening up in the next 5-7 years,” it said.
The company also said it taking the necessary steps to spin off the medical devices business into a separate company and is setting up additional facilities to expand the capacities of medical devices.
“The devices market is growing at tremendous pace and is offering incredible opportunities to grow,” the company said.
During the quarter the company launched more than 30 products exclusively for online marketplaces. Overall online sales went up by 243 percent in the period, compared to same quarter last year.