Granules India Ltd

(Vilas D'Souza) #763

I would trust the management 50pc. Each quarter, the debt climbs by 100 cr and the company maintains that they don’t want more debt.

2020 is a far cry. For me, profit growth without balance sheet growth n cash flows doesn’t mean much And that alone drives valuations.

I’m happy with the turnaround but remain unsure if the stock will bounce back above 130.

(mrai74) #764

Although Q2 results were positive, the disappointment was the lack of sequential gross margin improvement.

The reasons for this dismal show include:

  1. The mix during the quarter in the API business for new capacity coming on stream being more skewed toward developing markets where the margins tend to be lower. In addition, our company trimmed down some volumes in India for Metformin due to competitive pricing. Overall this resulted in the gross margin benefit from expanding US revenues being offset by unfavorable geographic mix within the APIs.

  2. Raw material cost inflation continues to be an issue. Given the lag with which price increases are coming through, the pass-through is still not reflecting in gross margins. crude cooling down is a major positive on this aspect.

  3. Our management is confident that after the completion of the last round of major expansions (Oncology API and FDF), steady deleveraging can be expected from the next year. The current gross debt of Rs 1120 Cr should decline to Rs 900 Cr over next two years.

  4. 2HFY19 is expected to be stronger as the impact of additional asset utilization plays out. The margin impact, however, would be fully captured only in FY20.

In the next 2-3 years, the focus will be on higher capacity utilization. During FY18-21, the company expects a ramp-up in capacity utilization across its key molecules, including Paracetamol with expanded capacities of 6000tpa with validations for higher-margin developed markets, and Metformin, for which demand growth is expected to remain strong in the developed markets.

(Vilas D'Souza) #765

Did anyone attend the concall? Was there any talk of impact on USD loans due to appreciating dollar? And what ia the jump in the intangibles?

(mrai74) #766

@vagator10 Please read my earlier replies on ForEx

(Vilas D'Souza) #767

I did see it. The question is: is the debt being used and paid back outside of India? That way conversion to INR doesn’t happen

(mrai74) #768

The mutual funds have shown some interest mainly Kotak, DHFL, BNP, Invesco & Reliance during October’18

The MF Holding is inching towards previous high…

(mrai74) #769

Is it slowly & steadily… good to see someone from promoter group buying at current levels… I know the numbers are TOO small to make any impact but certainly confidence booster for investors

(mrai74) #770

ANDA approvals for Methylphenidate Hydrochloride Extended-Release Tablets USP, 10 mg and 20 mg.

(mrai74) #771

Are we really ready to turn around

(mrai74) #772

Domestic pharma industry contributes to over 4 per cent to the gross domestic product, against the global average of 9 per cent. This makes India a country with one of the lowest medicine spends.

Although no one would be interested personally in spending more on medicines, but as a owner of pharma industry contributor, the growth projected provides nice outlook for upcoming future.

However, spend on medicines is projected to grow by 9-12% in the next five years compared to China’s 5-8%, which will thrust India forward to reach the list of top 10 countries. There are close to half a million people directly, and over a million people indirectly, employed in the domestic pharmaceutical industry. This makes India the second highest skilled biotech workforce.

(mrai74) #773

(amolk) #774

Just FYI…Promoter has released 75 Lakhs shares which were pledged,

(mak2569) #775

Pardon me for my lack of knowledge.
Released, as in?

(mrai74) #776

ANDA approval trend is encouraging although the report says that it will increase the competition & companies will observe pricing pressure. Let us see how it impacts our company

(mrai74) #777

Pledge release notification of 75L shares by KPC, balance pledge still remains 5.33 Cr shares.

A40357C0_599A_4088_B8B4_D8881AFF7BB3_145436.pdf (371.3 KB)

(Vilas D'Souza) #778

In the past, release of pledge is followed by creation of additional pledge and that too for more shares. So let’s wait and watch

(MHS) #779

(Sunday) #780

Could someone post the key notes for today’s call with management. I had planned to attend as usual, but could not because of unavoidable reasons…

(Parag) #781

(mrai74) #782

Few key notes from concall

  1. Pledge is down from 60% to 53% & further reduction planned in current quarter, expect better figures by Q4 results

  2. The debt to EBITDA ratio reduced from 2.6 at the end of Q2 to 2.3 at the end of Q3

  3. Management wants to have debt to EBITDA at least 1.5 & they don’t wish to be zero debt company rather they may explore further CAPEX for next level of growth after 2-3 years, obviously once they are able to utilize current facilities

GranulesIndiaLimited.pdf (334.7 KB)