Neuland Laboratories Concall was today at 5:00 PM.
Here are key highlights of the Conference Call π
@unseenvalue @drprashantmish6 @AdityaKhemka5 @punitbansal14
Here are key highlights of the Conference Call π
@unseenvalue @drprashantmish6 @AdityaKhemka5 @punitbansal14
Business Updates:
β’ GDS and CMS segment both have contribute well.
β’ Unit 3 will be commercialized in 2 quarter of FY 2021
β’ Growth was led by Levofloxacin and Levetiracetam
β’ CMS business was the key driver for growth. Good progress from CMS
β’ GDS and CMS segment both have contribute well.
β’ Unit 3 will be commercialized in 2 quarter of FY 2021
β’ Growth was led by Levofloxacin and Levetiracetam
β’ CMS business was the key driver for growth. Good progress from CMS
CAPEX:
β’ Expectation of 90cr this year and 60-70cr is done
β’ No further updates on CAPEX but there will be need
CMS:
β’ Growth driven by increase in commercial projects which done well. Baseline project done well
β’ CMS business could be volatile. Overall growth is positive
β’ Expectation of 90cr this year and 60-70cr is done
β’ No further updates on CAPEX but there will be need
CMS:
β’ Growth driven by increase in commercial projects which done well. Baseline project done well
β’ CMS business could be volatile. Overall growth is positive
Question from @unseenvalue sir
What makes Neuland uniue in CMS
β’ Technical capability, where Neuland creates niche.
β’ Co. works more with biotech company which are big and small size company
β’ This built strong relationship with customer.
β’ Working with US Biotech, and Japan.
What makes Neuland uniue in CMS
β’ Technical capability, where Neuland creates niche.
β’ Co. works more with biotech company which are big and small size company
β’ This built strong relationship with customer.
β’ Working with US Biotech, and Japan.
β’ Company is ramping up more in generic pipeline.
β’ Company is gaining market share in GDS business.
β’ Major performance of today is reflection is the employee and leadership.
β’ Strong focus remains on organization front.
β’ Company is gaining market share in GDS business.
β’ Major performance of today is reflection is the employee and leadership.
β’ Strong focus remains on organization front.
Industry Outlook:
β’ API segment is still in nascent stage with huge growth opportunities present.
β’ Still remain the heart of pharma.
Company niche:
β’ Many molecules are under commercial stage.
β’ Neuland has focused more on technology, and good manufacturing strategy.
β’ API segment is still in nascent stage with huge growth opportunities present.
β’ Still remain the heart of pharma.
Company niche:
β’ Many molecules are under commercial stage.
β’ Neuland has focused more on technology, and good manufacturing strategy.
β’ 25% of supply come from China and management expect to decrease the share to 10%.
β’ Supply chain would be key lookout. Nearby customer will be more in focused as well.
β’ Strategy going forward should be supply chain to get shorten, manufacturing capabilities.
β’ Supply chain would be key lookout. Nearby customer will be more in focused as well.
β’ Strategy going forward should be supply chain to get shorten, manufacturing capabilities.
Europe API expansion:
β’ API scalability in API market is in talks for the last 20 years
β’ But management wont take that lightly.
β’ Players of Europe should not compete heavily. They can be winner in 1 or 2 molecule but company will be tough in terms of cost structure as well
β’ API scalability in API market is in talks for the last 20 years
β’ But management wont take that lightly.
β’ Players of Europe should not compete heavily. They can be winner in 1 or 2 molecule but company will be tough in terms of cost structure as well
Near term focus:
β’ Robust business plan. Focus to capitalize Unit 3.
β’ Plans to deploy more capital in unit 3 to fulfill the needs.
Debt or Equity Infusion:
β’ No needs of equity infusion.
β’ No need of additional debt
β’ No Inorganic growth expansion plans
β’ Robust business plan. Focus to capitalize Unit 3.
β’ Plans to deploy more capital in unit 3 to fulfill the needs.
Debt or Equity Infusion:
β’ No needs of equity infusion.
β’ No need of additional debt
β’ No Inorganic growth expansion plans
Project Pipeline:
β’ Teams have been focused more on late life cycle project.
β’ Added more project on late stage in the last few quarter.
β’ Focus now remains to increase last stage project
β’ Also adding early stage project as well in order to continue stability
β’ Teams have been focused more on late life cycle project.
β’ Added more project on late stage in the last few quarter.
β’ Focus now remains to increase last stage project
β’ Also adding early stage project as well in order to continue stability
GDS Market:
β’ Large part of GDS comes from export market.
β’ Financial number are skewed towards the certain geographic, mainly because of focus on increasing penetration
β’ Largest market now are US, Japan, Europe. But this may change as well.
β’ Large part of GDS comes from export market.
β’ Financial number are skewed towards the certain geographic, mainly because of focus on increasing penetration
β’ Largest market now are US, Japan, Europe. But this may change as well.
Question @AdityaKhemka5 sir
Competitor losing market share and increase in demand:
β’ Less pricing pressure.
β’ Europe is dependent on lot of raw material from China. Hence shifting the customer
Conti
Competitor losing market share and increase in demand:
β’ Less pricing pressure.
β’ Europe is dependent on lot of raw material from China. Hence shifting the customer
Conti
Low margin in GDS business:
β’ Margin are product dependent on. There are certain product whose margin of GDS product are more than CMS but product diversification leads decrease in margin (inclusive of commodity type product).
Cont.
β’ Margin are product dependent on. There are certain product whose margin of GDS product are more than CMS but product diversification leads decrease in margin (inclusive of commodity type product).
Cont.
β’ Company do product by product analysis. Little part of margin expansion is there. With scalability of Unit 3 margins can even increase well, coupling with decrease in cost structure.
Market share:
β’ Some products 70-75% world market share and in some 10%. Hence overall market share vary.
β’ They are sticking to their portfolio.
β’ Trend of integrated pharma cos. are looking into API source in substitution for in house manufacturing which is increasing demand
β’ Some products 70-75% world market share and in some 10%. Hence overall market share vary.
β’ They are sticking to their portfolio.
β’ Trend of integrated pharma cos. are looking into API source in substitution for in house manufacturing which is increasing demand
β’ Pricing pressure was not that much but they are cautious, they are seeing reasonable increase in market share.
β’ Mgmt is focusing on cost reduction to remain in the market ahead.
β’ Mgmt is focusing on cost reduction to remain in the market ahead.
Shift from China:
β’ Customers are dropping the China.
β’ There are certain products where china was the leader or the primary source but now co. is seeing that business coming back.
β’ Company is looking for many molecules opportunity with available expansion to grab this share
β’ Customers are dropping the China.
β’ There are certain products where china was the leader or the primary source but now co. is seeing that business coming back.
β’ Company is looking for many molecules opportunity with available expansion to grab this share
Raw material: Year ago faced huge challenge in sourcing raw material from China. However company is optimizing the cost and looking for alternate source of looking from India and other country.
This resulted in raw material cost remained stable, and gross margin remain on hold.
This resulted in raw material cost remained stable, and gross margin remain on hold.
Capacity Utilization- Average utilization of around 65%.
β’ Already deploy 55 crores on capacity.
β’ Goal is to keep utilization less than 70% to manage the uncertainty and unseen demand
β’ Already deploy 55 crores on capacity.
β’ Goal is to keep utilization less than 70% to manage the uncertainty and unseen demand
Thanks Mayank for mentioning. Sentence error:
Unit 3 was commercialized in 2 quarter of FY 2021 (this quarter)π
Unit 3 was commercialized in 2 quarter of FY 2021 (this quarter)π
β’ β’ β’
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