Ajanta Pharma

Stock Opportunities Not-so-Hidden Gems
997

Ajanta came up with another good set of nos, with sales growing by 20% and EPS by 69%. Management seemed confident of maintaining (and potentially improving) their EBITDA margins in FY25. They have been very disciplined with their capital return program and have announced another buyback at 2770. This makes it their 5th buyback since 2019. Concall notes below.

FY24Q4 concall

  • Sales grew at 20%, Gross margin 75%, EBITDA margins ~ 26%, PAT margins ~ 19%

  • Expect low teens sales growth in FY25 with branded generics growing in mid-teens and 28% EBITDA margins

  • Buyback of 285 cr. at Rs.2770/share

  • US :

    • 32% YOY growth (FY24 growth of 16%) (0 new launches)

    • Target to file 8-12 products in FY25 and growth of low double-digit

    • FY25: Expect 6 launches (1 launch in Q1, Q2, and remaining in Q3/Q4)

    • 8-10% price erosion, shortages have gone up, market is favorable

  • Domestic :

    • 14% YOY growth (FY24 growth of 11%), launched 2 new products (0 first launch in India). In FY24, launched 15 new products (4 first launch in India)

    • MAT March 2024 : Volume 1.3% (vs 0.7% IPM), Price: 4% (vs 4% IPM), New product: 4.1% (vs 2.9% IPM)

    • Cardiac MAT growth of 4% in March 2024 (vs 10% for IPM). Ex MetXL, growth was 11%. Q4 growth was 14% as price impact of MetXL got nullified

    • Trade generics : 41 cr. (vs 42 cr. in Q4FY23), 161 cr. (vs 151 cr. in FY24)

    • Added 200+ MRs in India (MRs increased to 3000+ vs 2800+ in Q3FY24)

  • Emerging market (branded generics)

    • Africa branded grew by 13% (FY24 growth of 5%) (launched 9 new products in Africa in FY24)

    • Asia branded grew by 18% (FY24 growth of 10%) (launched 18 new products in Asia in FY24). 75-80% of portfolio is chronic

    • Launched 7 new products in emerging markets (27 in FY24)

  • Africa institution

    • Growth of 23% YOY (FY24 growth of 31%)

  • FY24 CAPEX: 160 cr. (expect 175-200 cr. capex + maintenance in FY25). Don’t need to add capacity for next 2 years

  • R&D stood at 5% of sales (expect it to be at 5% going ahead)

  • Global MR count is 4,800+ (vs 4,500+ in Q3FY24). Indian MRs increased to 3,000+ (vs 2,800+ in Q3FY24). Majority of global MRs are in Africa

Disclosure: Invested (position size here, no transactions in last-30 days)

8 Likes