Granules India Concall was today at 5:00 pm
Here are the key highlights of the Conference call😀
@unseenvalue @varinder_bansal @sonalbhutra @VRtrendfollower @suru27 @StocksResearch
Here are the key highlights of the Conference call😀
@unseenvalue @varinder_bansal @sonalbhutra @VRtrendfollower @suru27 @StocksResearch
-Company facing problems due to Covid
-Granules has achieved the highest numbers in the history of growth story.
-PAT growth of 20% after 2021 with base of 2021.
-ROCE increased due to better utilization of plants.
-Out of approved ANDAs 6 are yet to be launched.
-Granules has achieved the highest numbers in the history of growth story.
-PAT growth of 20% after 2021 with base of 2021.
-ROCE increased due to better utilization of plants.
-Out of approved ANDAs 6 are yet to be launched.
- PAT growth is higher than revenue growth: Due to good product mix, price realization
- Vizag facility is expected to come up next year
- Intentionally delayed launched of some products due to COVID
- Supply chain remain the continuous focus of the company
- Vizag facility is expected to come up next year
- Intentionally delayed launched of some products due to COVID
- Supply chain remain the continuous focus of the company
- New launches, new approvals and price realisation resulted in good growth and this is expected to continue in the coming period of time.
- Focus on Strategic shift from top line to bottom line
- 3-5 new launches in H2
- Free cash flow before working capital is 281 cr
- Focus on Strategic shift from top line to bottom line
- 3-5 new launches in H2
- Free cash flow before working capital is 281 cr
- Working Capital debt increase by 31 crores
- 60 Cr of CAPEX in this quarter
Growth in company by focus on
- launces and new approval in US market
- Launch of products on European market
- focus on operational efficiency
- 60 Cr of CAPEX in this quarter
Growth in company by focus on
- launces and new approval in US market
- Launch of products on European market
- focus on operational efficiency
-As growth increases the requirement of cash and working capital requirement will increase.
- Company has extra stocking in US and whenever there is new launch that time company has to build up inventory of at least 3-5 months otherwise company will have to pay the penalty.
- Company has extra stocking in US and whenever there is new launch that time company has to build up inventory of at least 3-5 months otherwise company will have to pay the penalty.
Raw Material:
- Key raw material is imported from China, however the supply has no hamper. (Prices remained volatile)
- Also partnering with small players, by delivering them technology and accessing the basic chemical
- Key raw material is imported from China, however the supply has no hamper. (Prices remained volatile)
- Also partnering with small players, by delivering them technology and accessing the basic chemical
- Core molecule contribution in Revenue is 70% and it is expected to come down to 50%.
- Gross Margins: Combination of product mix and price realization. No comments of Gross margins sustainability, however EBIDTA and PAT margins is expected to be maintained
- Gross Margins: Combination of product mix and price realization. No comments of Gross margins sustainability, however EBIDTA and PAT margins is expected to be maintained
- Supply credit working capital will continue to go up and some of it is financed by payables. It will be managed by combination of internal accrual, increased receivable days.
- Capex: Overall Capex of 400 cr in this year and next year. out of that 80 cr is for API.
- Capex: Overall Capex of 400 cr in this year and next year. out of that 80 cr is for API.
- Despite of Capex company will maintain the ROCE
- Capex will be financed by internal accrual.
- 6-7 products still need to be launched after approval.
- Oncology APIs are launched but the impact on top line and bottom line will take some time.
- Capex will be financed by internal accrual.
- 6-7 products still need to be launched after approval.
- Oncology APIs are launched but the impact on top line and bottom line will take some time.
- No COVID related demand in the core products.
- Launched one big product. Increase in new customer was the key benefit
- Company will not increase the capacity of Paracetamol. There are better opportunities available.
- Launched one big product. Increase in new customer was the key benefit
- Company will not increase the capacity of Paracetamol. There are better opportunities available.
- Hence this margins improvement will be from the new product. Future revenue share will be from new product rather than core molecule
- Majority of growth is from US market
- To reduce dependency on US, focus will also be on rest of the world. Europe will be a key market.
- Majority of growth is from US market
- To reduce dependency on US, focus will also be on rest of the world. Europe will be a key market.
- US will grow in absolute numbers, however the expansion of growth in Europe market is what company eyeing for.
- Company will work with partners so that company will not have to be at front end, company will not have to hold the inventory. This will improve the working capital
- Company will work with partners so that company will not have to be at front end, company will not have to hold the inventory. This will improve the working capital
- Launching formulation in Latin America, and the margins in Latin is better than other area.
- Though the company sells API, most of it is used for internal accrual. Company also buys some of it from China.
- Though the company sells API, most of it is used for internal accrual. Company also buys some of it from China.
- As Company ran out of capacity it has built up the capacity that will last till the end of next year. By that time new plants will be ready.
- New PFIs coming up that will be launched in Latin America and rest of the world.
- New PFIs coming up that will be launched in Latin America and rest of the world.
- MUPS technology: Most of the company is using this technology. Expansion will continued in the coming quarters and pellets are produced for gastro purpose
-PLI scheme: Great initiative. However it will not have much effect on the sales part. Main focus is on the infrastructure
-PLI scheme: Great initiative. However it will not have much effect on the sales part. Main focus is on the infrastructure
-Subsidies will be given on the mix API, however this would be on green field, and it would be difficult for companies too open green field to avail the subsidy as it could be small part only
Conclusion:
- Company is focusing to foray its market in different geographies.
- PAT and EBIT margins are expected to be on line (key focus here).
- Pipeline is expanding and new products will be key driver of growth in future. CAPEX will include majorly new product only.
- Company is focusing to foray its market in different geographies.
- PAT and EBIT margins are expected to be on line (key focus here).
- Pipeline is expanding and new products will be key driver of growth in future. CAPEX will include majorly new product only.
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