1. They had a great performance in FY22. They had initially given a guidance of 10-15% growth in revenues and ended the year with 47% growth in topline.
The EBITDA margin was above 50% for the year despite inflationary pressure.
2. A major part of the growth came from the Specialty Chemicals segment. Revenue for this vertical grew by 51% YoY due to increased volumes. They saw good volume offtake for the 1st commercialized
molecule which is now generic. But the partner developed a robust life cycle management which generated good volumes.
3. There was also a commercialization of a 3rd molecule in this segment which helped increase volumes. They currently have 1 more molecule in development
which is expected to be commercialized in the next 18-24 months.
4. On the Pharma side of the business, they expect future growth to come from vertical integration of the CDMO business and increased volumes in the formulations business
5.They have had multiple interactions with global innovators who have asked them to increase the runway of their services. So they have been working on increasing the scope of their services from manufacturing 1 intermediate
to multiple intermediates, KSMs, APIs and formulations for innovators.
6. During the year, they sold their stake in Rising Pharma to HIG Capital and acquired Casper Pharma. They had initially invested $35 million in Rising Pharma in 2019 for a 25% stake.
They sold the entire stake to HIG capital for $41.55 million in cash and a 7% stake in Rising Aggregator (a holding Company created by HIG to manage Rising Pharma and other acquisitions that would happen in future).
7. Of this, they used $20.5 million (~βΉ156 Cr) to acquire
Casper Pharma. They have a large manufacturing unit in Hyderabad for the manufacture of solid and liquid oral drugs for USA and regulated markets and is ready for USFDA inspection. They have filed 2 ANDAs which have triggered a US FDA audit which is likely to happen soon.
They also have 15 ANDAs which they plan to file in FY23.
8. Casper has a 7 year contract with Rising Pharma to manufacture and supply formulations for all products developed by Rising Pharma. So the initial investment of $35 million in Rising Pharma
resulted in $21 million in cash, 7% stake in Rising aggregators, 100% stake in Casper Pharma and a long term contract for supply of formulations.
9. They also plan to get into life cycle management of drugs for innovators. In this business, they will manufacture the drugs
for innovators after their drug goes off patent. They will provide manufacturing for the entire value chain - intermediate to formulation. They have been in conversation with the innovators to make this happen for a while but the travel restrictions
due to the pandemic caused delays.
10. For their existing formulations business (niche products) - they plan to maintain a steady pace of ANDA filings. They will be filing 6-8 ANDAs in FY23 which will start contributing to revenues in 18-24 months.
11. So they have 4 wheels in place to grow their formulations business.
Wheel 1 - Their existing formulations business of niche products
Wheel 2 - The stake in Rising Aggregator is expected to increase in value as HIG Capital is planning to do more acquisitions and more than
double the enterprise value of Rising Aggragator.
Wheel 3 - The acquisition of Casper Pharma and the long term contract with Rising Pharma is expected to increase revenues.
Wheel 4 - The life cycle management for the generic drugs of innovators.
To support this growth plan they are investing βΉ600 Cr in Capex which will be spent on replacing old blocks in their Suryapet facility, moving their R&D facility in Jeedimetla and adding another block in the Pashamylaram facility.
This capex is expected to complete in the next 18-24 months
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1. Revenue for the quarter was βΉ1539 Cr (20% growth YoY). The EBITDA margin was 29.5% for the quarter despite inflationary pressures.
2. They saw significant growth in their CDMO business
(196% growth YoY, 60% growth QoQ) which helped offset the muted performance of the ARV business.
3. RM prices remain elevated due to the geopolitical situation and the Covid lockdown in China. But they are expecting gradual decrease in RM prices during the year
4. They are confident of achieving the aspirational target of $1 billion in revenue which will be supported by several approvals during the year.
5. With respect to their ARV business in LMIC markets - the demand was soft but the major issue is that the pricing has been largely
1. Company overview 2. Management 3. APL Apollo Tubes Ltd 4. Products 5. Margins 6. Plants 7. Distribution 8. Marketing 9. Revenue mix 10. Companyβs Key Focus Areas 11. Future Capex
12. Financials 13. EBITDA Margins
1. Company Overview
Apollo Pipes is among the top 10 leading piping solution providing companies in India. Headquartered at Delhi, the Company enjoys strong brand equity in the domestic markets. With more than three decades of experience
in the Indian PVC Pipe Market, Apollo Pipes holds a strong reputation for high quality products and an extensive distribution network.
1. Revenue in Q1 FY23 grew by 59% to 218.9 crs from 137.6 crs in Q1 Fy22 but down 11.5% sequentially from 247.5 crs. Volume grew 38% to 14406MT from 10200MT in Q1 FY22.
2. EBITDA was 20.0 crs as against 17.4 crs y-o-y but dropped from 28.4 cr in previous quarter. Margin also dropped to 9.2% from 11.5% q-o-q. EBITDA per tonne dropped to 14000 per tonne from 17500 per tonne. This drop was because of drop in pvc prices.
Company is targeting 20000 EBITDA per tonne in next two years. 3. Growth looks robust y-o-y basis because of low base last year but weak sequentially because
of massive correction in PVC prices. This created uncertainty among channel partners who went into destocking mode.
1. Total revenue registered a y-o-y growth of 23% to Rs. 1,190 Cr from Rs. 965 Cr, but down
25% q-o-q from 1595 cr.
2. Degrowth in EBITDA was 40% to 126cr in Q1 23 from 210 cr in Q1 22. Margins also dropped
to 11% from 22%. Reasons for fall in EBITDA were because of Weak agri demand and
inventory losses due to fall in PVC prices.
3. PVC Pipes & Fittings volume grew 29% y-o-y to 71,960 MT and for PVC Resin volume registered a y-o-y growth of 25% to 62,746 MT. Volume for CPVC was 3600 MT with revenue of about 150 crores.
1. Q1 23 Revenues 88.4 Cr vs Q1 22 106.8 Cr - Decline of 17%
2. EBITDA 15.2 Cr Q1 23 vs 26.3 Cr - Decline of 42%
3. EBITDA margins 17% for Q1 23 vs 25%
Forex loss of 4.9 Cr.
Actual EBITDA = 20.17 Cr. EBITDA margins 23%
4. Geopolitical issues, covid lockdowns in china and semiconductor shortages affected the companyβs performance as SDAs demand gone down.
Expecting Good revival from Q3 FY 23 for SDA
5. SDA have highest margins compared the other products manufactured by Tatva Chintan
#Syngene announced a 10 year agreement with Zoetis to manufacture the biological entity for Librela(bedinvetmab). It is the first monoclonal antibody for the treatment of osteoarthritis in dogs
1. About the drug
Currently, the product is only approved for sale in Europe but management has indicated that US approval is expected by the end of 2022. Zoetis launched the product in the second quarter of 2021 in Europe.
Sales for the product were $15 million in both Q3 and Q4 of 2021 and $20 million in Q1 of 2022. Zoetis management has said that the product will be a blockbuster by the end of 2022 bringing in $100 million from the EU alone. (Blockbuster product in animal health is products with