Kilitch Drugs to set up second green field project in Ethiopia

Kilitch Drugs today informed the bourses that it is setting up its second green field project in Ethiopia. The said plant will produce liquid injectables. The cost for the green field project is around US$5 million.

Earlier, company planned to set up Ethiopia’s first state-of-the-art cephalosporin injectable plant, having a capacity of 20 million vials. Besides vials, the plant will also produce tablets, capsules, dry syrups, etc. The plant will significantly boost the company’s presence in the African markets in terms of improved margins and high capacity. Also, the company expects 25 per cent mark up in the sales from this plant and hopes to sell the entire production without any gestation period as the government will purchase 15 million vials. The plant has reached 70 per cent completion.

With rising focus on Africa, the management expects to generate topline of Rs. 500 crores in the next five years. Also, with the sole concentration on its upcoming plant, the management will look forward to replicating the Ethiopian model in the rest of Africa.

Going ahead, the company is planning to register more than 500 products (currently >250 products) in the African markets by FY2020 as Africa is highly profitable market.

Looking into the financials of the recently concluded quarter Q2FY20, consolidated revenue came in at Rs. 15.92 crore, registering 44.6 per cent YoY decline. EBITDA for the quarter fell by 63.9 per cent YoY to Rs. 2.29 crores as against Rs. 6.34 crores in the corresponding quarter last year, with a corresponding margin contraction of 768 bps. EBITDA margin for the quarter stood at 14.4 per cent. PAT for the quarter came in at Rs. 1.34 crores, reporting a YoY decline of 68.2 per cent.