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The company held its conference call on 2 Nov 2018 and was addressed by Mr. Sameer Hiremath MD
Key Highlights
Volumes have grown by 13-15% for both the businesses. Rest growth due to price increases including rupee depreciation.
Volume growth to continue in H2 as well.
Major pharma business is from exports. Around 55% of exports from US, 30% from EU and rest from other countries.
5-6 products in Contract and 8-9 products in generic manufacturing.
Debottlenecking facility completed in Sep 18 which has resulted in higher volumes for increased demand of products for customers.
New contracts and new products in the pipeline. 9-10 products Crams and rest are own products. Fairly diversified into sub segments in crop protection business. Key focus in fungicides, herbicides sides
With irregulatories in Chinese supply, the company has seen increased demand for products. Several new products in pipeline, verge of signing them.
Completed successful audit by Japanese consumer. Opened up Japanese market for the company and new businesses.
Upward revision of rating from Icra from A- to A.
Revenue diversification and strong visibility in revenue
Gabapentine players globally have come down and prices have increased.
Gabapentine prices have gone up and now accounts for around 35% of total pharma business and around 15% of total sales. This product sales will eventually be around 8-10% of total sales going forward in years to come, as new product contribution increases.
Expects 18-20% revenue growth for next 2-3 years with improving margin profile for both the segments.
Capex of around Rs 250 crore in next 24 months. Asset turnover of around 1.5-1.75 times from this capex. Combination of generic products and for Crams. Entire capex is Brownfield.
The company is very bullish for its overall Crams business Volume growth will lead to internal efficiencies and even better margins for the company.
There is no open exchange position in the forex.
The company is able to pass through entire raw material increase to the customers.
30% of total raw material currently is brought from China. The company has multiple supply options in China.
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