Renata drives Q3 earnings growth on debt overhaul, cost discipline

Factory overheads were virtually flat in the nine months, rising just 0.1pc to Tk 6.16b despite inflationary wage pressure

FE Team | Published: April 30, 2026 22:08:00

FE REPORT
Renata's profit surged 33 per cent year-on-year to Tk 0.78 billion in the third quarter to March, driven mainly by a sharp fall in finance costs following major capital restructuring exercises.
An increase in revenue also contributed to the business performance.
"We have been able to grow our revenue while simultaneously improving our cost structure," said Mustafa Alim Aolad, chief financial officer (CFO) of Renata, while talking to The FE over the phone.
"We successfully lowered our finance costs by deploying the proceeds from our preference share issuance to retire high-cost debts, a move that has structurally reduced our interest burden going forward," he added.
Other costs have also been reduced.
The company secured alternative suppliers offering raw materials at more competitive rates. Renata also optimised its manufacturing process by increasing batch sizes, meaningfully reducing per-unit overhead costs.
With this quarter, Renata, one of the leading drugmakers, has secured double-digit profit growth in three consecutive quarters.
For the nine months to March this year, the company reported a consolidated profit of Tk 2.34 billion, a 27.8 per cent rise over the corresponding period last year, according to interim financial statements published recently.
Consolidated revenue for the nine-month period reached Tk 33.62 billion, up 6.5 per cent year-on-year.
Domestic revenue, which accounts for 73.6 per cent of total revenue, grew 10.5 per cent year-on-year to Tk 24.76 billion in the nine months to March. Export revenue rose 5 per cent to Tk 2.09 billion, aided by a wave of international regulatory approvals.
Factory overheads were virtually flat in the nine months, rising just 0.1 per cent to Tk 6.16 billion despite inflationary wage pressure, as renewable energy investments delivered a 7.8 per cent reduction in energy costs and repair and maintenance costs fell 16.2 per cent.
Capital restructuring
A significant strategic move during the period was the completion of Renata's capital restructuring programme.
The company drew down $30 million out of its $58.4 million long-term deal with the International Finance Corporation (IFC).
In October last year, Renata issued Tk 3.25 billion of convertible equity preference shares-which were fully subscribed-and used the proceeds to retire high-cost short-term debts.
As a result, total loans and borrowings fell from Tk 18.88 billion as of 30 June 2025 to Tk 15.66 billion as of 31 March this year. Total liabilities were slashed by 9.8 per cent to Tk 21.63 billion over the same period.
Concerns over future performance
Despite the strong performance, the company's management flagged several emerging risks for the coming quarters.
Certain raw material suppliers have indicated price increases, and shipping costs have risen since the onset of the Middle East conflict. A notable taka devaluation against the US dollar has been observed since early March, and diesel costs rose 15 per cent in April alone, raising logistics and manufacturing expenses.
"We find ourselves in familiar territory," the company noted in its commentary, drawing parallels with disruptions since COVID-19.
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