jeevan patwa Profile picture
Jan 20, 2021 3 tweets 4 min read Twitter logo Read on Twitter
Below are few gems in #Indianpharma space…I own #Lauruslabs #Suvenpharma and #Suvenlife..

#Suvenpharma – NCE CRAMS – top end segment in CRAMs
#Suvenlife – Pure play CNS R&D – CNS is most difficult but largest market share in pharma
#Lauruslabs – process Innovation

#Biocon – Biosimilars – largest portfolio of biosimilars among Indian peers
#Syngene – Biologics CRAMs
#Divis – Execution capabilities
#Gland – Regulatory capabilities
#Natco – Para iV opportunities
#Sequent – Animal APIs

#Cipla – Strong respiratory franchise – should play out in next two years
#DRL – complex generics – should play out in next 2 years


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More from @jeevanpatwa

Oct 22, 2022
#Lauruslab What went wrong

ARV formulations was 1500 cr business for Laurus, they didn't participate in tenders in Q1 at lower pricing thinking that would have impacted long term margins for entire 1500 crs. Q2 pricing went down further. Took them 2 qtrs to adjust to this..
People say it couldn't deliver on promise. It has actually delivered fantasticaly on nonARV, CDMO.

ARV is where it went wrong and that was because of change in business dynamics similar to what happened in US generics few years back. Players are still not able to adjust to that
On brighter side, it spent 1300 crs in last 18 months and will be spending similar in next 18 months. So effectively gross block will double from Mar'21 to Mar'24 and majority of that is towards nonARV and CDMO funded through internal accrual
Read 5 tweets
Jan 27, 2022
Time to switch from FMCG to IT.. My bet is on #INFY

Around year back we discussed that “IT is new FMCG” and market actually recognized this and lot of IT companies trading at 50-60x. I feel one needs to be selective in IT. Not every ER&D is #TataElxsi.
#TataElxsi has its own quality. That’s where I called it CRADS (Contract Research and Development Services).

Cloud, Digital, Blockchain, AR/VR, Robotics, 3D Printing, IoT, AI, ML, Meta…complete transformation of how businesses work and consumers react. Mammoth opportunity
waiting in IT. It’s time to switch FMCG into IT. With flourishing e-com and online marketplace, value of distribution franchise is waning for FMCG. New brands are able to create market share with digital marketing and sales channel. Higher Ad spends, product development cost and
Read 9 tweets
Jan 26, 2022
#IBullreal results have no significance at this point. Key points to understand –

Debt reduction – Ibulllreal will be debt free at the time of merger with 650 cr coming from Mr Gehlot and 580 crs from land sale to Elan group. Embassy will have 3000 crs debt out of which 1500 cr
will be reduced through QIP and rest 1500 crs will come from collections next year. So merged entity will be zero debt company in FY23

Sales potential – Launched + planned projects have 18000 cr sales potential with 3400 crs of near completed inventory. Pending cost is 3900 cr
and sold receivables is 4224 crs. That means 9900 crs of cashflow to come in next few years from these projects. In addition, it is holding land bank of 3353 acres and 350 acres (42.5 Mn) for commercial development with potential annual rental of 4300 crs.
Read 4 tweets
Dec 29, 2021
#Lauruslabs Dr Chhava speaks about Care, Innovation and execution...Must watch

- CG is for benefit of ourselves and stakeholders
- Collegues, thier families, come first, shareholders come last in the list
- Mediclaim premium for CEO and chemist is same
- Customers and vendors both treated equally well
- Canteen is free for all, everyone including CEO and contract workers eat same food

- Dilution in early years was high due to the design of the company. It started as R&D company. Before hiring first person in mfg, R&D had 350
people. it lost 100 crs in first 4 yrs
- Tried to do products where we are strong at and not where neighbors are strong at. Believe in our strengh instead of playing at other weakness
- Overlap of R&D and mfg,done lot of process innovations
- same quality product for all region
Read 5 tweets
Nov 29, 2021
#Nifty EPS (Dec’19) = 563. Nifty was trading around 12000 (21x TTM PE) in Feb 20. After corona, it crashed to 7500. Assuming similar PE, market factored in 30%-40% EPS contraction for Dec’20. In reality, EPS contracted only 14% (Dec’20 EPS = 483)

Today if another corona wave
comes, we are much better prepared, lesser uncertainty and India is best placed among all the geographies. Last time, world assumed India would collapse given the size and population, but we did far better..

Nifty earnings have improved significantly in last year and
it gained momentum in last two qtrs where qtr eps is around 200... Dec 21 EPS estimate is 750

Even in worst case, IT, pharma (20% weight) will support earnings.. So Dec 22 EPS cannot be less than 850..

In best case, PE could be 25 & worse case 20.. So Nifty to remain between
Read 4 tweets
Nov 12, 2021

There’s lot of confusion and concers around whats happening in Laurus and I thought of putting my view

There are two main concerns
1.RM costs – this is universal to all pharma companies, but eventually will get sorted
2.ARV sales – this seems the bigger concern.
Because of regimen change (Efavirenz to Dolutegravir) and 30-day to 90-day pack, governments are in process of clearing the inventory which caused sales to go down. This may continue for a quarter more, but Q4 looks good..

Some might feel, funding may divert to Covid.
Global funds are for 5 years, it is a must medicine, so I don’t think, funding can divert or stop

Some are drawing conclusions from Q2 Aurobindo ARV sales. Pls understand LL is last man standing being lowest cost producer. Even if the market shrinks, other players may opt out,
Read 6 tweets

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