Q1FY22 concall was today for πŸŒ‹πŸŒ‹. My key takeaways πŸ‘‡πŸ‘‡

1⃣ Revenue & margin πŸ”»

In b/w lines:
Multiple factors for affecting both. Unit 3 has been commercialised, but not ramped up. Operating de-leverage at play. CMS revenue lumpy. As biz mix changes, so do margins.
Some CMS revenue postponed due to complex nature of projects (more on that later).

2⃣ Medium term guidance of 15-20% topline growth and 20% EBITDA margins

In b/w lines:
What we need to understand is that this is a very lumpy biz, even YoY there wont always be 15% growth.
Prices for Generic APIs are as per market movements. CMS revenues are lumpy. How can a management predict when will the Patent protected innovator molecule get commercialised? They simply cannot. With unit 3 ramping up & CMS revenue coming up, i fully expect 20% EBITDA margins
to be achieved in medium term (fuzzily defined). Expect to file 6-8 molecules in multiple geographies in rest of FY. Will drive revenue in GDS segment. Also aim to capture market share and constantly innovate on process side to bring down operating/manufacturing costs
3⃣ CMS: the long and short of it:

In the short term, there will always be lumpiness. They are executing some very complex molecules with multi-step chemistry which involves in-process monitoring. Project timelines do not always align with quarterly boundries. Q1 CMS projects..
have spilled over to Q2 and can spill over to Q3 too.

In the longer term: expect 4-5 CMS molecules to be commercialised in next 1-3 years. Entire CMS commercial segment is ~100cr right now. Some molecules can individually be as large as 100cr if successful. Wow.
CMS biz will continue to be lumpy until it scales up to 300-400cr revenues.

My overall thoughts: this is a lumpy business overall. Investors should be prepared for quarterly results volatility, sometimes even year on year numbers volatility.
Do you find this Q update useful? If so, please retweet the 1st tweet so that maximum πŸŒ‹πŸŒ‹ investors can read it and benefit.

β€’ β€’ β€’

Missing some Tweet in this thread? You can try to force a refresh
γ€€

Keep Current with Sahil Sharma

Sahil Sharma Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @sahil_vi

3 Aug
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives.
The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father,
...hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there--on a mote of dust suspended in a sunbeam.
Read 10 tweets
31 Jul
#IDFCFIRSTBank FIRST concall was right now. My key takeaways:

1. Credit costs of 2.5% in FY22, 2% in steady state.
In b/w lines: Bank has incremental NIMs of >9% which will support 2% credit costs. 1800cr provisions taken in Q1 represent a very conservative approach
A 850cr mumbai toll road account slipped into NPA due to covid lockdowns. There were partial payments. Expect it to come out of NPA post covid wave. VI exposure credit costs not included in 2.5% guidance.
2. Runway for growth is long
In b/w lines: Can grow loan book at 25% for a long time. Expecting 18-20% ROE from retail lending alone in steady state. CASA will also continue to grow enough to support retail lending needs. Enough cash right now.
Read 9 tweets
31 Jul
Reading a concall. Very interesting. Image
Image
Image
Read 4 tweets
30 Jul
#lauruslabs Q1 results key takeaways:
1. Diversification away from ARV

In b/w lines:
Currently 85% of filings in US/EU are ARV. This represents 11B$ of market opportunity.
But products under development (which represent 37B$ of opportunity) are skewed 80/20 for non-arv.
2. CDMO segment growth can surprise on upside.

In b/w lines:
the 195cr revenue in Q1 did not contain any one-offs. This represents a very good growth YoY growth of ~100%. Generally Q4 is strongest and Q1 this time was even higher. Only 4 products commercialised.
Huge potential for the 40+ products in pipeline. expecting this to drive growth in US and EU markets.

3. ARV market share gains to be limited
Read 5 tweets
30 Jul
Mega 🧡 on Tatva Chintan.

What excites me. What is the biz. What am i gonna do about the co.

Now that company is listed with around πŸ’―%+ gains, probably a good time to understand #tatvachintan

Let’s dive right in. Image
Products.

First let us understand the types of products the company makes. This is a chemicals company. The primary line of products they are into is called PTC: Phase transfer agents. Before I explain what that is, let us do a small dive into chemistry.
The basic building blocks of matter (everything around you) are atoms. They come in 118 flavors, called elements. The water you drive is made of 2 Hydrogen atoms & 1 Oxygen atom: H2O. Image
Read 36 tweets
25 Jul
Although question was addressed to Tariq, who answered it beautifully just wanted to add my thoughts:
Future belongs to those who specialise. Whether we look at doctors or engineers, everyone wants a specialist not a generalist.
Why should companies be any different?
Everyone in value chain has a specific function.

Cdmo does not do the research, so many innovators keep the research (discovery of candidate good enough for phase 1 trial) in house & outsouce the cumbersome development and manufacturing
Some others even outsource the research & become collaborators and move up the value chain. This is where syngene and similar CRO come into the picture.

As a junior engineer you start out writing thousands of lines of code every quarter.
Read 11 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

:(