Beta Drugs Limited

Stock Opportunities Untested - but worth a good look
91

They are in SME category and hence there is minimum purchase size

92

Hey everyone! I had purchased 800 qty of Beta Drugs shares very early on when it was only 53 rupees. I was very deep into equity research back then and I had gotten hold of their annual reports by emailing the investor relations. I got a prompt reply back right the next day with very detailed info (I guess simple things like these was one of the reasons I made my decision to invest early on) It has definitely paid off!

I am out of touch in equity research now as I am fully invested into my own startup (time and money) and I have not kept up with recent updates.

I want to thank you all for sharing your perspective here, I will read them closely as I hold on to Beta Drugs and as their narrtive evolves. I still don not have all the information or find any negatives to make any sell decisions.

4 Likes
93

National Cancer Grid

The initiative to bulk-buy drugs is led by the country’s largest cancer centre, Tata Memorial Hospital (TMH) in Mumbai. The initial list had 40 common off-patent generic drugs, covering 80% of their pharmacy costs, saving the group $170m.

The success of the scheme has attracted interest from hospitals and state governments across the country.

The next round will expand to over 100 drugs, while broader cancer care purchases like supplies, diagnostics and equipment are also being considered. However, more expensive patented treatments are currently not part of the plan.

“I think what pharmaceutical companies need to understand is in a market like India, unless you bring costs down, you’re not going to get the volumes and it’s a chicken and the egg phenomenon,” according to Dr C S Pramesh, Director of TMH and the Convenor of National Cancer Grid.

Disc: invested

4 Likes
94

I had written an in-depth report on Beta Drugs a few days ago. As per research company remains strong fundamentally with immense growth opportunity.
Beta Drugs - Utkarsh Batra.pdf (1.7 MB)

Do take a look at it.

14 Likes
95

Hi Utkarsh,
Thanks for the report and it is very helpful.
Curious to know if you are anyways related to Promotors of the company. Asking this because your surname is same as the Promotors and most of the info is from Annual reports published by the company.

Thanks,
Suresh

96

Hello Suresh Ji,

I’m glad you liked the report.

Fortunately or Unfortunately, I am not related to the promoters or even part of the company in any way, not even as a shareholder because it is an SME stock, and each lot costs upwards of 1,20,000. I am just a student with a lot of passion for the market and trying to learn and perform my limited investment activities as a professional/corporate.

Yes, most of the information is taken from the Annual Report and past concalls, because it is a really small company, information and data are not very readily available for Beta Drugs like companies with Market cap >10,000 cr. I have tried my hardest to get data from various sources to make it comprehensive and detailed but at the same time very crisp.

11 Likes
98

Just looking at the metrics interms of ROCE (>25% over 7 years), NPM (10-12% over 7 years) and operating margins reaching 18-19%. It seems like there is something special that BDL is doing as these numbers are being sustained over a 7 year period are very above average. It seems to be very difficult to identify the moat in BDL. Is it purely the sales team’s expertise? or is it the distribution network with multipe hospitals thats creating a very sticky business for BDL?
Whatever BDL is doing is different from the pack.
Any thoughts?

99

Secondly a bit concerning is how much remuneration the directors are getting paid. In 2022 and 2023 the two directors Varun and Vinod batra have taken salaries of 1.7Cr and 2.4Cr respectively which amounts to close to 7% of the NPM. Doesn’t this seem a little too high?

100

There are Multiple things they are doing right.

  • Choosing the right drug
  • Backward integration into 70% API’s of their Formulations
  • To some extent R&D
  • Focus on NDDS
  • Rightly said Hospital network and their sales team / MRs
4 Likes
101

great job.
Adding a point, it’s expecting 290cr+ revenue for FY24.

1 Like
102

And paying pennies to Rohit Parti and Manmohan Khanna. Just the sitting fees. Not sure why they are working for them and what other arrangements they have with them.

103

Great report. Can you try to find something on Beta UBK
International Pvt. Because its not operational and not much info about the same in annual report. I had seen 2 videos on youtube about the same but nothing more than that.

104

I have recently started tracking this stock, all the parameters looks great, however, even with these great set of numbers consistently for 7 years, why has Beta Drugs not migrated to main board? Shouldn’t it have been migrated within 3 years itself?

1 Like
105

GNlg9XbWoAABdIJ
GNlg9XbWoAABdIJ917×2048 272 KB

Fell down 8% today post Q4 results.

106

image
image1062×1600 160 KB

Revenue was on point as per the guidance, however there was a temporary decrease in margins as mentioned by the management below.
FY25 should be a good year for this stock, as the revenue will continue to grow at 25-30% and the EBITDA margins will return back to 24% - 26%

5 Likes
107

Q4FY24 Concall highlights:

  • Ebidta declined due to high RM cost (platin which is a gold n platinum derivative)
  • Platin cost comprises 14-15% sales
  • Platin can’t be manufactured in house.
  • Yearly sales breakup:
    - Branded: 89 Cr (margin 33-36%)
    - CDMO: 140 Cr (margin 15-17%)
    - Exports: 46 Cr (margin 28-32%)
    - API : 21 Cr (margin 22-23%)
    - Derma: 6.83 Cr
  • halfyearly sales breakup:
    - Branded: 41.5 Cr
    - CDMO: 68 Cr
    - Export: 30 Cr
    - API: 11 Cr
    - Derma: 3.3 Cr
  • Ebidta will try to bring to 26% in FY25
  • Cosmotology:
    - division posted net loss
    - guidance FY25 min sales 14-15 Cr
    - gross margin is 65%
    - plant setup initiate by Fy25-26 ( 30 - 35 Cr)
    - recently launched 5 products (haircare, sunscreen, moisturizer)
    - Will focus on hair product segment
    - Future target 35% of business
    - Dr prescribed medicine after Dr approves.
  • Cleared audit n received registration cert from Urasia
  • Cytotoxic syrup facility started
  • Own brand, injectable: Oral = 43 : 57
  • FY25 guidance 25-30% sales.
  • 70% Api in house manufactured.
  • 2-3 months will migrate to main board, process already initiated.
  • export business target 35% business in future.
6 Likes