Ajanta Pharma


If this puts an end to the constant pledging, it might actually turn out to be a good thing in the long run.

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Very good revival in sales from Ajanta, however some part of this growth is one-time due to the flu season in US. They had massive margin pressure due to losses on currency hedges, higher freight costs due to air freighting and large increase in MR strength. Ajanta has increased their MR strength by 50% in International markets. Concall notes below

FY23Q3 concall

  • Sales grew at 16%, Gross margin 72%, EBITDA margins 21% (adjusting for forex derivative loss), PAT margins 14%
  • FY24 Guidance: COGS ~26% and EBITDA margins ~ 25-26%
  • Unrealized hedge losses are around 4% of sales. This along with higher air freight costs have contributed 6% to margin loss
  • Launched 30 new products across markets. Such a large product launch required a larger field force expansion
  • Employee cost increased by 18.5% (10% was due to increment and remainder was due to increase in team size). Have strengthened MR strength by 50% in international business (Asia and Africa), this has been the most aggressive field force expansion done so far by the company. MRs start performing in 2nd year and become really productive by 3rd year
  • Total MRs: 4400+ (2800 in India) vs 4200+ in last presentation
  • Expect mid-teens growth in branded generics
  • US:
    o 61% YOY growth
    o Filed 1 ANDA (9M: 4 ANDA), received 0 final approval (9M: 1 final + 1 tentative)
    o Have 22 ANDAs under approval and 4 tentative approvals
    o Benefitted from Flu season in Q3 (mostly Tamiflu). Do not see this benefit coming in Q4
    o Mid to high single digit price erosion
    o 16 cr. higher cost due to air freighting of some flu product
    o Will have 1 launch in Q4 and 4-5 product launches in FY24
  • Domestic:
    o 13% YOY growth , launched 21 new products in 9M (6 was first launch in India). 6% volume growth (vs flat for industry), price and new product introduction is at par with industry
    o Gained 1 rank in cardiology (to 16), 1 in pain management (to 27) and lost 1 rank in dermatology (to 15)
    o Trade generics: 38 cr. (vs 30 cr. in Q3FY22); 109 cr. in 9MFY23 (vs 87 cr. in 9MFY22)
  • Emerging market (branded generics)
    o Africa branded declined by (-13)%. 6% decline was due to INR appreciation vs Euro which has reversed now, so it should be better in Q4
    o Asia branded grew by 17%
    o Putting more thrust in Anglo Africa (especially Uganda and Kenya). Should start getting approvals from next year and launching products
  • Africa institution
    o Decline of (-15%) YOY
  • CAPEX of 114 cr. in 9M (full year planned capex of 150 cr.). Capacity utilization is 50-60% and should suffice for next 4 years growth
  • 70-80% of receivables are hedged
  • Other expenses normalized run rate (excluding forex) is 280-290 cr.
  • R&D stood at 6% of sales
  • About 50% of pledge will get removed from the funds raised by promoter entity

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


FY23Q4 concall

  • Q4FY23: Sales grew at 1%, Gross margin 72%, EBITDA margins ~ 17%, PAT margins ~ 14%
  • FY23: Sales grew at 12%, Gross margin 72%, EBITDA margins ~ 21%, PAT margins ~ 16%
  • Logistics costs contributed 2% to margin dip and have now normalized
  • FY24 growth: Branded will see mid-teens growth, US will see mid-single digit growth, Africa institution will be flattish
  • FY23 forex: 47 cr. net gain (adjusted for unrealized losses) vs 73 cr. net gain in FY22
  • Margins have bottomed out. Expect 2% margin revival in freight cost + 2% in gross margin in FY24 which should bring EBITDA margin to 25%
  • CAPEX of 160 cr. in FY23. FY24 maintenance capex + corporate office will be 200 cr.
  • Improvement in working capital resulted in 99% cashflow conversion
  • For 12 months, employee cost increased due to expansion in field force by 50% internationally. 27 cr. sales incentives (for FY23) were earlier reflected in SG&A and are now categorized in employee costs
  • Hope to recoup margins in years ahead
  • R&D stood at 6% of sales for FY23, absolute R&D will be same in FY24


  • 19% in FY23 (17% in Q4) (1 new launch in FY23; 40 launched products)
  • Mid-single digit growth for FY24
  • Expect to launch 5 products in FY24 (including gChantix)
  • gVimovo will be launched in Q1FY24
  • gChantix: target action date is Q2FY24, will launch in Q3FY24 if get approval
  • Filed 1 ANDA in Q4 (5 in FY23) and plans to file 6-8 ANDAs during FY24
  • High single digit price erosion
  • Want to keep US contribution at similar levels (20-22% of sales)
  • Flu product was $10mn in Q3, that is not present this quarter. Base revenue run rate has increased from 180 cr. to 200 cr.


  • 20% in FY23 (17% for Q4), launched 23 new products (6 is first launch in India). New brand launches will be lower than in last couple of years
  • FY23 growth breakup: 8% volume, 6% price, 3% new product launch
  • Trade generics: 42 cr. (vs 30 cr. in Q3FY22); 151 cr. in FY23 (vs 117 cr. in FY22). Expect low double digit growth (more chronic focused vs largely acute for the industry)
  • FY24: expect low double digit growth (vs 8-9% industry growth).
  • IPM rank 27 (gained 2 ranks in FY23), 4 brands are in top 500 of IPM
  • In MetXL, NLEM reduction was 18% and they have been able to gain back 11.3% from WPI based inflation price increase
  • MRs: 2800

Emerging market (branded generics)

  • Africa branded de-grew by (-26)% this quarter due to pension strikes in France. Shipments first happen to France and then go to Franco Africa. (-5%) de-growth in FY23 due to INR depreciation. 8 new products launched. Hoping for mid to high teens growth in FY24
  • Asia branded grew by 18% in FY23 (de-growth of -9% in Q4). Launched 38 products
  • Asia + Africa MR: 1300

Africa institution

  • De-growth of (-8%) in FY23 (and -1% for Q4)

Disclosure: Invested (position size here, sold few shares through participation in buyback in last-30 days)


FY23 annual report notes

Product launches:

  • Launched 23 (vs 16 in FY22) products in India out of which 6 (vs 4 in FY22) were first to market. Have a basket of 500+ products (vs 300+ in FY21) with 50% being 1st to market
  • One unique product launched in India was Alcarex (Alcaftadine) in ophthalmology where the previous product would give relief in 15 minutes. With the launch of Ajanta’s product, patients got relief in just 3 minutes and the effect of dose lasted for 24 hours. These improved patient compliance and convenience
  • Launched 38 new products in branded generics in branded generic markets in Asia (except India)
  • 1 launch in USA
  • Developed 11 APIs (vs 14 in FY22)

Branded Generics (72% of revenues; grew @13% to 2’690 cr.):

  • Indian branded generics (1174 cr.) grew at 20% (IQVIA reported Ajanta growth of 16% vs 8% for IPM). IPM rank improved from 29 to 27 in FY23. Ranked 4th in covered market with 65% chronic contribution and 2.5 lakh doctor coverage
  • Key brands in India
  • India ophthalmology: Growth of 16% vs industry growth of 16% (IPM rank maintained at 2)
  • India cardiology: Growth of 13% vs industry growth of 9% (IPM rank improved from 18 in FY22 to 16 in FY23)
  • India dermatology: Growth of 26% vs industry growth of 6% (IPM rank maintained at 15)
  • India pain management: Growth of 23% vs industry growth of 12% (IPM rank improved from 32 in FY22 to 27 in FY23)
  • Asia (957 cr.) grew at 18%. Philippines and the Middle East are key markets in Asia
  • Africa (559 cr.) declined by (-5%). Indian Rupee’s appreciation against Euro and logistics challenges experienced during last quarter caused a 5% dip in Africa branded business
  • 4500 field force (2800 MRs in India)

Generics and Institutional (27% of revenues; grew @13% to 1018 cr.):

  • Africa anti-malaria institutional business (190 cr., 5% of revenues) de-grew at (–8%)
  • US generics business (828 cr., 22% of revenues) grew at 19%. Filed 5 ANDAs (vs 8 in FY22) vs target of 10-12 ANDAs, received 4 final and 1 tentative approval, and launched 1 new product
  • US generics experienced severe price erosion which is stabilizing in mid-to-high-single digits
  • Have 21 ANDAs awaiting approval from US FDA
  • Growth in USA came from intense flu season, during which oral suspension medication played a crucial role in saving numerous children’s lives.


  • Developed Extended-Release/Delayed-Release oral solid dosage form products using Matrix technology (repeat of FY22 AR)
  • Developed products based on solid dispersion technology similar to innovator products (repeat of FY22 AR)
  • Development of Nanotechnology based ophthalmic products to enhance the ocular permeation with lower side effects and better treatment for patients
  • Development of tablets for conversion from non aqueous to aqueous coating and its successful launch
  • Filed 3 patents and received one for improved process for preparation of ‘Efonidipine’ by the Indian Patent Office as IN 406001
  • 850+ scientists (vs 750+ in FY22)
  • Total R&D expenses was 6% (vs 6% in FY22) of revenue (255 cr. vs 204 cr. in FY22); capital expenditure: 18 cr.

Financial Performance:

  • Consolidated revenue grew by 12% to 3’743 cr.
  • EBITDA margin reduced to 21% (vs 28% in FY22). Margins were impacted from higher raw material prices, higher freight costs and US price erosion. It will climb back to about 25% in FY24
  • PAT de-grew by (-18%) to 588 cr.
  • Cash ~ 841 cr. (vs 334 cr. in FY21), Paid back 479 cr. (vs 436 cr. in FY22) (buyback + dividend) and generated free cashflow of 463 cr. (vs 453 cr. in FY22)
  • Gross margins compressed from 75% to 72% due to higher API prices resulting from the conflict and uncertain world scenario, higher price erosion in the US, and a few one-time inventory write-offs. Expect this to improve by 200 basis points in FY24.
  • ROCE was down from 28% in FY22 to 22% in FY23
  • Employee cost increased from 19% to 21% of sales because of expansion in international field force by 50% and small addition in production and R&D
  • Other expenses increased from 28% to 31% of sales because of higher freight costs impacting by 200 basis points and forex derivative loss impacting by about 100 basis points


  • Enhanced capital allocation to branded generics business with accelerated product filing and enhanced ground presence. Increased product filings by three times and enhance team size by 50% in the rest of Asia and Africa market
  • US: Decided to reduce capital allocation due to increased uncertainty and continuous price erosion

Share issuances:

  • ESOP: During the year, 1’000 shares were issued against options exercised (vs 4’000 in FY22)
  • Bought back 2’210’500 shares at 1’425 price (vs 1’120’000 shares at 2’550 price in FY22)

Other Points:

  • Spent 160 cr. on maintenance CAPEX (vs 154 cr. in FY22). FY24 capex will be ~200 cr.
  • Receivable days reduced to 104 days (vs 113 days in FY22) due to higher branded contribution
  • Inventory days reduced to 80 days (vs 88 days in FY22) due to supply chain normalization
  • Trade payable increased to 79 days (vs 70 in FY22)
  • Auditor remuneration at 1.07 cr. (vs 1.1 cr. in FY22)
  • Hedging policy: company generally does currency hedging up for 6 to 18 months and up to the extent of 50% to 75% (vs 50% to 150% in FY22) of its net foreign exchange earnings
  • No major contingent liability (~5 cr. vs 7 cr. in FY22)
  • Employee count: 7’713 (vs 7‘234 in FY22) (median salary increase: 11%)
  • Managerial remuneration reduced (-0.8%) mainly on account of reduction in quantum of commission due to reduction in net profit
  • CSR: Spent 16.37 cr. vs obligation of 15.54 cr.
  • Share price high: 1427.5, low: 790.66
  • Number of shareholders: 84’973 (vs 62’139 in FY22)
  • Won “Best Managed Companies for 2022” award from Deloitte
  • Solar energy currently fulfills 11% of total energy requirement and is expected to increase to 32% in short term and to 50% in next two years
  • Digitization: Two of our facilities are highly digitized. We can now warehouse all the data of all the manufacturing equipment and quality-control equipment in a central platform, and utilize it for data analytics. This helps us to do predictive analytics of any equipment breakdowns and variabilities
  • Had 83 customers (vs 75 in FY22) that owed them >0.5 cr. and accounted for 91% and 93% of total outstanding as of FY23 and FY22
  • Sales return and rebates

Other expenses

Management Remuneration

Global trends:



Foreign currency exposure

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


Posting on behalf of @harsh.beria93 as he can not post more than 3 consecutive messages

FY24Q1 concall

  • Q1FY24: Sales grew at 7%, Gross margin 75%, EBITDA margins ~ 26%, PAT margins ~ 20%

  • Gross margin improvement was due to softening of API prices and recovery in EURO/INR. Reduction in freight costs was 2.5% of export sales

  • Will maintain 25±1% EBITDA margin in FY24

  • FY24: expect mid teen growth

  • US:

o 19% growth in Q1 (1 new launch; 41 launched products; plan to launch 4-5 products in remainder FY24)

o Filed 3 ANDA in Q1 and received 3 approvals; plans to file 6-8 ANDAs during FY24

o Expect quarterly revenues to remain at similar levels (213 cr.)

o Price erosion has stabilized, expect high single digit price erosion

o gVimovo has been commercialized

o gChantix: waiting for approval, hoping to launch in Q4FY24 or Q1FY25

  • Domestic:

o 14% growth in Q1, launched 3 new products (1 is first launch in India)

o Trade generics: 36 cr. (vs 33 cr. in Q1FY23). Expecting 10-12% growth

o IPM rank 26 (gained 1 rank)

o In MetXL, have been able to nullify impact of price cuts by growth in volume

o MRs: 2800

  • Emerging market (branded generics)

o Africa branded de-grew by (-5)%. Expect mid teen growth in FY24

o France disruption ended in mid May and has normalized since June

o Asia branded grew by 6% in Q1. Expect mid teen growth in FY24

o Launched 2 products in Q1

  • Africa institution

o De-growth of (-16%) in Q1

  • CAPEX of 26 cr. in Q1. FY24 maintenance capex + corporate office will be 200 cr.

  • R&D stood at 5% of sales


Ajanta Pharma Q1 highlights -

Breakdown of business revenues -

Branded business -

India - 32 pc
Asia - 26 pc
Africa - 15 pc
Total branded business - 73 pc

Generic business -

Africa Institutional - 5 pc
US - 22 pc

Total generic business - 27 pc

Total MRs across geographies - 4500 +
Presence in 30+ countries
Total products- 500 +

India business -

Cardiac- 39 pc
Opthal- 31 pc
Derma- 21 pc
Pain- 9 pc

Total - 10 brands with sales > 25 cr, 52 pc business from top 10 brands. 03 launches in Q1, 01 launch was first to Mkt

Last 4 yr’s India sales CAGR @ 14 pc. Only behind - JB Chen, Dr Reddy, Eris, Ipca, Aristo

Asia + Africa branded business -

Major presence in - Philippines, Middle East & CIS countries, Kenya, Tanzania, West Africa

4 Yr sales CAGR in Asia-12 pc
4 Yr sales CAGR in Africa-16 pc
Africa Institutional business FY 23 sales @ 190 cr, down @ 8 pc CAGR in last 4 yrs

US Generics-

52 ANDAs approved
6-8 filings/ yr
Last 4 yr sales CAGR @ 17 pc


FY 23 spend at 237cr
Employing 850 scientists

Q1 financial outcomes-

Branded business sales @ 732 vs 688 cr

Generics sales @ 278 vs 258 cr

Total sales - 1010 vs 944 cr, up 7 pc
EBITDA - 271 vs 222 cr, up 22 pc
PAT - 208 vs 175 cr, up 20 pc

Announced a special dividend of Rs 25/share as it was company’s 50th yr since inception

Ajanta out-grew India Mkt by 400 bps in Q1

Gross margins in Q1 improved by 200 bps to 75 pc

Guiding for 25+/- 1 pc EBITDA margin guidance for FY 24. Also guiding for Mid teen sales growth

Capex guidance for FY 24 @ 200 cr ( including maintenance capex and new corporate building )

Capex to remain muted in FY 25-26

Don’t see any addition in Indian field force in near future

Expect significant ramp up in Africa branded sales wef Q2

A back of the Envelope calculation suggests an EBITDA of around 1050 cr and PAT of around 750 cr for FY 24 - Rough estimate

Disc: plan to take up a tracking position

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Company came up with a good set of nos in Q2, with sales growing by 10% and EPS by 25%. Its good to see come back to their normal EBITDA margins of 25-30% after a gap of a few quarters. A very interesting piece of commentary was their US generics business, where they are seeing much more opportunities and lower pricing erosion, leading to 20%+ growth. Concall notes below.

FY24Q2 concall

  • Sales grew at 10%, Gross margin 75%, EBITDA margins ~ 28%, PAT margins ~ 19%
  • Expect low teen sales growth and 26% EBITDA margins in FY24
  • US:
    o 28% YOY growth (1 new launch, 42 launched products, plan to launch 3-4 products in remainder)
    o Growth was due to lower price erosion, market share gains in existing products and a couple of very successful new product launches
    o Filed 2 ANDAs and plans to file 6-8 ANDAs during FY23
    o High single digit price erosion
    o Market landscape is changing, price erosion is coming down, its looking quite positive now
    o Working capital requirements has not increased, instead consolidated inventory has come down to 71 days
  • Domestic:
    o 13% YOY growth, launched 7 new products (3 was first launch in India)
    o Volume growth was 6% (vs 2% for industry), Price increase: 5%, New product: 3% (Price and new product introduction was in-line with industry)
    o In Q2, launched a new triple combination drug in cardiology (first time introduction) for which they undertook clinical trials. Pace of launches of such products have reduced in recent times due to tighter regulations
    o Higher volume growth is due to better MR productivity and not due to geographical expansion
    o Cardiac MAT growth of 9% in September 2023 (vs 11% for IPM). Growth for Ajanta was softer only in last 6-months because metXL was impacted due to NLEM price reduction
    o Trade generics: 45 cr. (vs 38 cr. in Q2), 81 (vs 71 cr. in H1 FY24)
    o Third fastest growing company in top 25 cos in IPM
    o SGLT2 and DPP4 are being launched, along with different combinations. Since Ajanta had a late start in anti-diabetes, had some disadvantage
  • Emerging market (branded generics)
    o Africa branded grew by 8%. Expect low to mid-teens growth in FY24
    o Saw slowdown in Africa in past 4-5 months, but growth has come back recently
    o Asia branded de-grew by (-8%). Saw some spillover of orders from Q2 to Q3. Expect low teen growth in FY24
    o Have managed forex quite well, policy is to keep at least 50% of receivables hedged
    o Launched 8 products in Q2
    o Building business in countries in Central Asia, focus is changing from acute to chronic
  • Africa institution
    o Growth of 14% YOY
  • CAPEX of 46 cr. in H1FY24 (full year planned capex of 150 cr. including corporate office). 60-65% capacity utilization currently. No major capex for next 18-24 months
  • R&D stood at 5% of sales (scientists came down from 850+ to 800+)
  • Tax rate will be 25% in FY24
  • Global MR count is 4,500+ (2,800+ MRs in India)

Disclosure: Invested (position size here, sold shares in last-30 days)


Ajanta came up with a good set of nos in Q3, with sales growing by 14% and EPS by 59%. They have increase their EBITDA margin guidance to 28% EBITDA for FY24 and subsequently to 30%+ in the next few years. Concall notes below.

FY24Q3 concall

  • Sales grew at 13%, Gross margin 73%, EBITDA margins ~ 28%, PAT margins ~ 19%

  • Paid dividends of 642 cr. in 9MFY24 (51/share)

  • Expect significant increase in logistics cost in Q4 due to Red sea crisis (7% QoQ increase in other expenses over Q3), EBITDA margin will be lower in Q4 vs 9MFY24. Expect 27±1% EBITDA margins for FY24

  • Will see some increase in inventory due to transit time increase

  • US:

    • (-5)% YOY decline (2 new launches, 44 launched products, plan to launch 1 products in Q4). Decline in sales was because of higher flu season last year

    • Filed 1 ANDA (22 under approval), will file 8 ANDAs in FY24

    • Plan to file 8-12 ANDAs in FY25

    • High single digit price erosion, market is favorable

  • Domestic:

    • 5% YOY growth, launched 3 new products (0 first launch in India)

    • MAT December 2023: Volume 4% (vs 2.6% IPM), Price: 3.9% (vs 4.3% IPM), New product: 3.7% (vs 3% IPM). Price growth is lower for Ajanta due to NLEM impact in MetXL

    • Cardiac MAT growth of 6% in December 2023 (vs 10% for IPM). MetXL NLEM price impact was in December 2022

    • Competitive intensity has increased dramatically in cardio division (have seen some market share loss in statin combinations)

    • Looking to regain market share through more doctor outreach activities. This is the current focus

    • In ophthalmology division, have been #1 in generating prescriptions for quite sometime

    • Covered market IPM rank: 4

    • Trade generics: 38 cr. (vs 38 cr. in Q3FY23)

  • Emerging market (branded generics)

    • Africa branded grew by 7%. Growth was lower this year because of rationalization of inventory to distributors. Confident of regaining growth momentum in FY25 (launched 5 new products in Africa in 9MFY24)

    • Asia branded grew by 28% (launched 15 new products in Asia in 9MFY24)

    • Launched 10 new products in emerging markets

  • Africa institution

    • Growth of 179% YOY (9M growth of 33%). Preponement of few supplies from Q4 led to higher growth

    • Anti-malaria vaccine rollout has been very slow in Africa and its efficacy is also lower (GSK + 1 other company has rolled out). Don’t expect meaningful impact in next 3-5 years

  • CAPEX of 80 cr. in 9MFY24 (full year planned capex of 125 cr., revised from 150 cr. earlier)

  • R&D stood at 5% of sales

Disclosure: Invested (position size here, sold shares in last-30 days)


**Ajanta Pharma - **

Q3 concall highlights -

Revenues @ 1105 vs 972 cr, up 14 pc
EBITDA @ 314 vs 170 cr, up 85 pc !!!
PAT @ 210 vs 135 cr, up 56 pc !!!

Geography wise sales performance -

India branded - 308 cr, up 5 pc ( led by strong growth in Ophthalmology segment @ 15, Cardiology segment growth at 6 pc. Launched 14 new products in India in FY 24 including 4 new to Mkt products ). India business operates in 4 main areas - Cardio, Derma, Opthal, Pain management

Asia branded - 292 cr, up 28 pc ( launched 15 new products in FY 24 in Asia AoR )

Africa branded - 155 cr, up 7 pc ( launched 5 new products in FY 24 in Africa AoR )

US Generics - 252 cr, down 5 pc ( launched 4 new products in US in FY 24 )

Africa institutional generics - 86 cr, up 180 pc ( basically anti-malarial products )

Money spent on R&D @ 86 cr for Q3 @ 5 pc of sales

Expect logistics costs to go up in Q4 due ongoing red-sea issues

EBITDA margin guidance for full FY 24 @ 27 +/- 1 pc. Margins should inch up further for next 2-3 yrs !!!

Capex for entire FY 24 expected @ 125 cr ( including maintenance capex, Rs 80 cr already spent )

Company expanded its number of MRs for its Asia, Africa branded business over the last few Qtrs. Hope to see increased MR productivity and mid to low teen top line growth in these geographies over next 2 yrs

Company is open for inorganic growth in the domestic mkts as they r generating healthy cash flows

If they r not able to identify acquisition tgts, they ll keep paying hefty dividends

Price erosion in US Mkts is abating, general mkt conditions turning favourable

On malarial vaccines having an impact on their Africa institutional business - vaccine efficacy isn’t very good. Plus the roll outs have been very slow. Don’t see a major impact on their business in next 3-5 yrs

Likely to file 8-12 ANDAs in US in next FY vs 6-8 ANDAs this FY. Hence the R&D costs should be higher

Company’s rank in the covered Mkts -

Opthal - 02

Cardio - 10

Derma - 05

Pain Management - 10

Company aspires to grow by 15 pc on topline in Q4

Disc : hold a tracking position, biased, not SEBI registered


This growth for q4 is qoq or yoy?

They r guiding for 15 pc YoY growth for Q4