#AARTIDRUGS Concall was today at 3pm.
Here are highlights of the Conference Call😀
@unseenvalue @nid_rockz @Milind4profits
@sonalbhutra @SrishtiSharma_
🧵👇
Here are highlights of the Conference Call😀
@unseenvalue @nid_rockz @Milind4profits
@sonalbhutra @SrishtiSharma_
🧵👇
Opening Remarks:
- Revenue and exports grew more then 20%
- 55% of the growth was mainly due to volume in API
- API contributed 88% and formulations 12%
- Under API 56.17% revenue came from export
- Revenue and exports grew more then 20%
- 55% of the growth was mainly due to volume in API
- API contributed 88% and formulations 12%
- Under API 56.17% revenue came from export
- Company maintained efficiencies and costs
- D/E reduced due to strong internal accrual
- Good growth in formation exports
- Scaled up anti-inflammatory capacities
- Working on backward integration and API capex
- D/E reduced due to strong internal accrual
- Good growth in formation exports
- Scaled up anti-inflammatory capacities
- Working on backward integration and API capex
Prices:
- Maximum prices were there in June bcz of supply shortages
- Margins should continue in Dec also
- Maximum prices were there in June bcz of supply shortages
- Margins should continue in Dec also
Beneficial Factors:
- China plus and other policies have given positive outlook
- GOI providing benefits resulting in improved Indian presence globally
- Macro factors are very good for coming future
- China plus and other policies have given positive outlook
- GOI providing benefits resulting in improved Indian presence globally
- Macro factors are very good for coming future
Markets & Strategies:
- Formulations - exports performing well
- Investing to create IPs, working in emerging markets like Latin America, Asia and Canada as well.
- Margins and sales growth as per our expectations
- Strategy to own IPs and manufacturing
- Formulations - exports performing well
- Investing to create IPs, working in emerging markets like Latin America, Asia and Canada as well.
- Margins and sales growth as per our expectations
- Strategy to own IPs and manufacturing
- current utilization is 75-80%
- Major capex would be on R&D and IPs.
- capex plans are in line
- 60% of the projects are API based in anti biotic and skin care areas and couple of intermediate as well
- internal accruals have been very strong and D/E wont go beyond 0.7
- Major capex would be on R&D and IPs.
- capex plans are in line
- 60% of the projects are API based in anti biotic and skin care areas and couple of intermediate as well
- internal accruals have been very strong and D/E wont go beyond 0.7
Capex:
- 1 phase of major capex 18-24 months
- 2 phase in 3-4th year
- acquired 9 acre land in last quarter adjusting to their existing facility (biggest contributing capacity)
- Next they are expanding in Gujarat with some capital investment scheme and PLI scheme
- 1 phase of major capex 18-24 months
- 2 phase in 3-4th year
- acquired 9 acre land in last quarter adjusting to their existing facility (biggest contributing capacity)
- Next they are expanding in Gujarat with some capital investment scheme and PLI scheme
china supply:
- 15-20% R&D consumption WAS from China and trying to shift to domestic vendors
- Going towards backward integration
Prices:
- In June quarter they already had hiked prices of API
- margins should continue in dec, mar will be difficult to say
- 15-20% R&D consumption WAS from China and trying to shift to domestic vendors
- Going towards backward integration
Prices:
- In June quarter they already had hiked prices of API
- margins should continue in dec, mar will be difficult to say
Inorganic growth:
- looking opportunities in inorganic growth
World leader in anti biotic and anto protozol
Bcz of lockdown, spread of infectious disease was very low which hindered these segments
- looking opportunities in inorganic growth
World leader in anti biotic and anto protozol
Bcz of lockdown, spread of infectious disease was very low which hindered these segments
Debottlenecking:
- Next year more incremental growth more debottlenecking
- current capacity can give a revenue of 2500 cr
- debottlecking projects can add 200-300 cr
Out of 600cr capex most are backward integration
- Next year more incremental growth more debottlenecking
- current capacity can give a revenue of 2500 cr
- debottlecking projects can add 200-300 cr
Out of 600cr capex most are backward integration
China factor a temporary thing before but now looks like a structural change
Key strengths of bulk productions:
- Lower cost
- Not afraid on volume competition
major revenue increase was due to exports , now volumes have also picked up.
Increasing volumes on 3rd party side
Key strengths of bulk productions:
- Lower cost
- Not afraid on volume competition
major revenue increase was due to exports , now volumes have also picked up.
Increasing volumes on 3rd party side
Other Insights:
- In about 2 years our revenue to 350+
- new projects asset turnover is 2-2.3
- sales increased in first 2 quarters were the main reason for the cashflow jump
- Credit period is around 90 days
- if particular quarter does over well then debtors increase suddenly
- In about 2 years our revenue to 350+
- new projects asset turnover is 2-2.3
- sales increased in first 2 quarters were the main reason for the cashflow jump
- Credit period is around 90 days
- if particular quarter does over well then debtors increase suddenly
- Customer mix is more or less the same
- Material shortages, supplier got money quicker or price goes up
- Cost is passed on to customers
- raw materials are at lower prices except the materials which had chinese monoploy
- prices are driven by RM prices to service good mark up
- Material shortages, supplier got money quicker or price goes up
- Cost is passed on to customers
- raw materials are at lower prices except the materials which had chinese monoploy
- prices are driven by RM prices to service good mark up
In top 10 products, company is in top 3 rankings
Competition:
-Competition is from domestic and china markets
- Metformin had done great for company (double digit growth)
- 3000 tons will be done in 2 phases in near term
- sulphonated and chlorosulphonated projects expansion
Competition:
-Competition is from domestic and china markets
- Metformin had done great for company (double digit growth)
- 3000 tons will be done in 2 phases in near term
- sulphonated and chlorosulphonated projects expansion
API industry outlook and guidance:
- As compared to FY20 future of API looks much better
- Short supply form china, Demand down , pollution drove in India in last 7-8 years and now India has done well
- Govt policies are in & from all perspective API will do well in upcoming yrs
- As compared to FY20 future of API looks much better
- Short supply form china, Demand down , pollution drove in India in last 7-8 years and now India has done well
- Govt policies are in & from all perspective API will do well in upcoming yrs
- Pricing growth 45%
- As of today there is no thought that prices will fall they are looking to be stable
- Most of contracts are for long term
- Pricing are for monthly basis
- As of today there is no thought that prices will fall they are looking to be stable
- Most of contracts are for long term
- Pricing are for monthly basis
Product pipeline:
Most of them are above 100 cr they are eyeing for 300 cr+ revenue for annum in API
For formulation - now targeting blockbuster molecule going off patent
Potential is very high (multi million product)
Most of them are above 100 cr they are eyeing for 300 cr+ revenue for annum in API
For formulation - now targeting blockbuster molecule going off patent
Potential is very high (multi million product)
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