Thread by @raj_dasani

A thread on some pointers from the Annual Report of #hikal:

- entry into new markets
- strong cash flow of 180cr used towards capex+dept repayment - in animal health signed a 10-year contract with a leading MNC for development+supply of niche APIs

(1/10) 🧵

- animal health to be made major verticle. flexible manufacturing facility for same to be added at Panoli plant.
- 3.3% of annual sales in R&D
- focus on backward integration of raw materials to help reduce supplier concentration and geographical dependence

(2/10)🧵

- looking towards wooing global customers
- 250cr Capex planned for fungible capacities this year
- "Pinnacle" (5yr) program to become best in the industry: "good-to-great." Global consultancy firm hired to guide.
- animal health and biocide are two emerging verticals

(3/10) 🧵

- certified as 'great place to work' second time in a row
- overall focus on improving technology throughout the board
- looking towards inorganic growth too
- Hikal Business Excellence (HIBEX) for internal efficiency improvement in all respects across units

(4/10) 🧵

- low-cost advantage and shift from China boosting Indian API segment
- Hikal shifting towards more complex APIs
- Additional API production block at Panoli to be commissioned in FY21-22
- FY19-20 Capex worked towards debottlenecking the plants

(5/10) 🧵

- additional Capex on multipurpose Bengaluru site to be partially functionally by FY21-22 end
- significant CDMO order under execution in FY21-22
- clinical trials+process of discovery to commercialisation is much shorter (+low cost) in animal health than human health

(6/10) 🧵

- Panoli site to have a multi-API dedicated and fungible Animal Health block
- in Crop protection business 30-35% raw material comes from China
- procuring more land for facilities in crop protection vertical

(7/10) 🧵

- biocides and speciality chemical contribute 20% in crop protection vertical
- CDMO contributed to over 70% of sales turnover in the crop protection business
- for CDMO in crop protection, Japan is the focus going forward

(8/10) 🧵

- new mini plant to be commissioned at R&T centre Pune for simulations before production at commercial sites
- 5-year EBITDA CAGR = 14.7%
- 5-year Net Profit CAGR = 26.4%
- net working capital cycle=109 days
- expects a y-o-y improvement in ROCE (16.1%) and ROE (15.2%)

(9/10) 🧵

Thank you @unseenvalue @soicfinance @sahil_vi @itsTarH for the knowledge sharing you do. It’s helping me immensely in learning.

(10/10) 🧵

🧵Anti-thesis for #hikal
- supply chain disruptions from geopolitical tensions
- rising transportation costs
- Q2 numbers will be impacted by the flooding on Mahad plant
- rising raw material costs

thank you @ishmohit1 for teaching the importance of anti-thesis and much more…