Very interesting commentary from dr chava sir. ๐
My key takeaways ๐
Disclaimer: biased, i am adding today. ๐
1. Revenue is only 933cr in this Q. 1 B$ sales in fy23 guidance is in tact
In b/w lines: you must have heard by now, the arv sales are down due to inventory stocking by laurus customers. Global customers like global fund did inventory stocking last year. So sale has been low
Expecting arv api sales to normalize to 400cr/Q level Q4 onwards
Why is 1B$ revenue ๐ฏ in tact ?
Coz capex is done. Formulation capacity will double in next 1-2 Q. Non arv biz is growing fast. Cdmo is up 60% YoY. Some other api division approvals got delayed.
2. Cdmo is growing fast. Really fast.
In b/w lines: Already it's at around 800cr runrate. Expecting cdmo to be 25% of revenue in 3 years time. This works out to roughly 3x growth in cdmo (bio + chem cdmo) in 3 years. The cdmo trend is quite secular
3. Laurus bio did 25cr / Q runrate for last 2 Q. Future is bright.
In b/w lines: Can do 40cr in next few Q as new fermenter comes online. Current capacity is around 200 KL.
LAURUS setting up 1M L capacity but the plant has space for 3M L capacities
Stage 1 already has 500cr revenue potential scaling directly current capacity.
Total revenue potential might be around 1500cr + to be realised in next many years.
Working closely with clients to design & build the Greenfield capacity.
4. Margins. Gross are up 4-5%. Operating are down 4%
Operating deleverage has resulted in operating margin going down. Some of it is due to non utilization of new capacity
Gross margin are up due to better product mix. Arv used to be 80% of sales not so long ago. Now it's 50%
Arv api are the lowest value product. Lowest gross margin product. Cdmo is significantly higher gross margin for laurus than arv. Even non Ari api are significantly higher margin. Confident of maintaining 30% ebitda margins.
<End of notes>
I am adding, biased. Not a reco.
Please don't take anything i share as a reco. I am not an investment advisor do your own due diligence. ๐๐
โข โข โข
Missing some Tweet in this thread? You can try to
force a refresh
The one on CFO to EBITDA conversion (one has to look beyond CFO for high growth companies, look at quality of inventory, receivables, business execution cycle)
Saregama q4 was flat. I think i can understand now what the problem is
Stated guidance is to acquire 25-30% of all content released every year
In largest segment : Hindi : they acquired 5% of songs
In 2 other smaller segments : Telugu & Malayalam they acquired 20%
look at the music segment PBT (since it's dominated by streaming, carvan low margin)
Compare it to the YouTube views growth
Q3Fy22 to Q4fy23 :
Views: more than double
Music ebit : 64 cr to 58 cr ebit. No growth at all
What does that tell us about monetization per view
Part of the degrowth can also be due to the losses in events business. But at end of day it's a stangnant profit stream as far as Investors are concerned
Disclaimer: was invested, not invested any more. Definitely interested.
1. Working capital (inventory, receivables) 2. Capital expenditure (plant, machinery)
#1 is accounted for in operating cash flow
#2 is accounted for in cashflow from investing activities
Read each screenshot carefully, look beyond screener ๐
When you do you will realise following: 1. 90% of receivables are not even due. They are essentially part of the payment terms 2. 100% of inventory is raw material & cwip (higher rm for growth & higher cwip due to longer execution timelines)
3. No finished goods inventory (except what is in transit to the clients) 4. No credit impaired receivables over last 2 years 5. Negligible inventory write down
A lot of you call me andh bhakt
You are missing the forest for the trees. Focus on the intent, the actions, look at the broader picture. If you get lost in the details, you are basically playing into hands of forces which act to break, loot & keep india poor
๐งต @AbhijitChavda
How many governments have the guts to implement gst? How many had the guts to take away something like old pension scheme so that poor people can benefit rather than govt employees (my own mom will lose but country before family)
How many governments had the chance to, but didn't implement direct benefit transfer. How many have worked tirelessly to create basic infra like toilets, electrification, roads, which should have happened in first 50 years of independence
My name is XPRO & i am not a packaging film maker.
A new 7% position for me. A company promoted by Birlas.
Do retweet if you find it useful. ๐
๐งต
Disclaimer
I am not a sebi registered advisor. The reason i share about my learnings is to motivate everyone to do the same & build a sharing ecosystem. I firmly believe that knowledge multiplies by sharing
Nothing i share should be construed as a buy or sell reco
Outline
1. Business 2. Growth & Capex 3. Profitability 4. Industry Trends 5. Moats & Competitive positioning 6. Valuation 7. Position sizing 8. Risks & Anti thesis