Another strong quarter.
FY22Q2 concall notes
- US:
o 26% YOY growth (gain in market share + 1 new launch)
o Filed 2 products in H1FY22, expect 10 ANDA filings in FY22. Should file 12+ ANDAs in FY23 (can go up to 15 ANDAs in FY23)
o US has been profitable since FY19
o Very strong customer connect - Domestic:
o 23% YOY growth (30 cr. trade generics vs 24 cr. in FY21Q2, 57 cr. in H1FY22)
o Launched 5 products (3 were first to market)
o Domestic growth has revived at ~18%
o In trade generics, covid specific products drove growth
o Not looking at adding new MRs
o Black fungus has not been the main reason for ophthalmology growth - Emerging market (branded generics)
o 19% YOY growth, Asia grew by 6% (slightly lower than expectation) and Africa grew by 39% (exceptionally high due to preponement of certain dispatches)
o Africa market has revived strongly, Asian market has not revived - Africa institution
o 29% YOY growth
o Impact of vaccine on anti-malaria business: Will probably take a lot of time for penetration. Do not expect any significant impact on anti-malarial business (on private or tender markets) for the next 3-5 years - Gross margin reduced to 74% (higher API prices + US price erosion + some bit of product mix). Gross margins should stay at 75±1%
- CAPEX of 65 cr. in H1FY22 (budget of 200 cr. for FY22: 100 cr. is maintenance + 100 cr. for new office construction)
- Other expense should be ~225 cr. (quarterly)
- Direct depend on Chinese sources is very low, however there is significant dependence of Indian API suppliers (to Ajanta) on China
- Don’t need any further capacity for next 3-5 year growth
- R&D expenses will stay at 6% of sales
- Guwahati tax benefits is until 2027
Disclosure: Invested (position size here)