Indoco Remedies Con Call Q2FY22 Notes:
Business:
• Revenues increased by 15.6%: Rs.372 crores in Q2FY22 vs Rs.322 crores in Q2FY21.
• EBITDA increased by 43.4%: Rs.86 crores in Q2FY22 vs Rs.60 crores in Q2FY21.
• EBIT increased by 65.7%: Rs.85 crores in Q2FY22 vs Rs.51 crores in Q2FY21.
• PAT increased by 65.6%: Rs.41 crores in Q2FY22 vs Rs.25 crores in Q2FY21
• Indian Pharma Industry (IPM) has shown normalcy in sales in June 2021. The sales registered for Q2FY22 is Rs.43,064 crores (growth of 14.6%).
• Most of the therapies have shown strong growth: Anti-infectives, gastrointestinal. & respiratory segments.
• In September 2021, the company’s rank jumped to 25th from 29th in the IPM with a market share of 0.75%.
• Revenues from Domestic Formulation Business grew by 22.3% : Rs.214 crores in Q2FY22 vs Rs.175 crores in Q2FY21. Major Therapeutic segments: Anti-infectives, Gastrointestinal, Vitamins, Minerals & Nutrients and Ophthalmics performed well during the quarter.
• During the quarter two new products were launched: Renofin Plus Tablets (Paracetamol) under Pain & Analgesics Segment. Noxacream (Molecule: Ozenoxacin) under Derma segment.
• New products stand at 4 for the period
• Revenues from International Formulation Business increased by 11.6%: Rs.136 crores in Q2FY22 vs Rs.121 crores in Q2FY21.
• Revenues for US Business increased by 10.2%: Rs.48 crores in Q2FY22 vs Rs.43 crores in Q2FY21.
• Revenues from Europe increased by 6.3%: Rs.60 crores in Q2FY22 vs Rs.56 Crores in Q2FY21
• Revenues from South Africa, Australia & New Zealand increased by 114%: Rs.3.8 crores in Q2FY22 vs 1.8 crores in Q2FY21.
• Revenues from emerging markets increased by 20.6%: Rs.24 crores in Q2FY22 vs Rs.20 crores in Q2FY21.
• Revenues from API business declined by 13.6%: Rs.20 crores in Q2FY22. The degrowth is due to higher captive consumption which is around 60% of the total API dispatches.
• Revenues from CRO & Analytical Services increased by 6%: Rs.3.7 crores in Q2FY22 vs Rs.3.5 Crores in Q2FY21.
• Aloja & Aloja M has been launched in the market and expect this molecule to get good sales. Indoco is the only player in the market.
• Indoco has 2,300 MR’s and with managers around 2,800.
• MR productivity stands at 2.6 lakhs
• 1 Tender won in Germany and 2 more products are being planned for FY23. Appointed a distribution company to distribute the products all over the country. Indoco pays them for the distribution costs and some profit.
Management:
• MD: Ms.Aditi Panandikar, Joint MD: Mr. Sundeep Bambolkar, CFO: Mandar Borkar
• US order book is very healthy and we will recover in Q3 & Q4.
• There has been close to 90-95% growth in Anti-infectives alone. Respiratory also helped this quarter.
• Chronic has been muted and it is not our area of strength.
• Dental divisions have done decently.
• The biggest gainer has been the Ophthalmics business and seeing an excellent upside on this basket.
• We are selling 12 products in the US. We plan to launch 3-4 products in the Ophthalmics basket.
• There have been major issues in terms of the availability of the containers.
• Most of the legacy brands across our divisions are doing well.
• Expect Anti-infectives to do well going forward.
• The end of Q3 would be the right time talk about the numbers for the future.
• Going forward we expect the Dental-Gynaecological, Ophthalmics and Cardio-diabetics and even for the acute division to grow well.
• In Q3 & Q4 we will have a good amount of launches.
• The revenues from Brinzolamide will come in phases.
• Consuming most of the API that we are making right now.
• Capex guidance stands at Rs.80 crores.
Risks:
• Certain challenges in dispatches. Container availability and API raw material availability challenges.
•There is a rise in input prices. There is no impact as of now but going forward in Q3, the impact would be more significant.