RPG Lifesciences, formerly known as Searle (India) is a pharma company producing a wide range of quality and affordable medicines in Global Generics and Synthetic API. The company had a poor Q3FY17 performance, beginning right for the net sales, which was down 11% (YoY) at Rs.64.5 crore. Net profit was down 89% at Rs.55 lakh.

The main reason for this is that in current Q3, the inventory held has gone up 67% and this has affected the total costs structure – it was at 98.5% of total income v/s 93% (YoY).

EBITDA came in 37% lower at Rs.5 crore and margins slipped from 10.96% to 7.58%.

The only redeeming part of the numbers – 9MFY17 net profit is at Rs.21 crore, already much ahead of FY16 net profit of Rs.12 crore.  Annualised EPS is at Rs.17 (FV of Rs.8).