The 2019/20 annual report already says that Rivaroxaban was already commercialised in the year March-2019 to March-2020 - see letter to shareholders. So I think its revenue is already baked in and I don’t think there will be more growth to come unless volumes increase substantially.
For a product that has already been commercialised for close to 1 year I don’t expect volumes to grow even more, so we cannot expect more growth due to this product.
This probably does not change the whole thesis though but does have an impact on growth driver.
Annual report was published on 14th aug-2020, so I would expect it to be commercialised for maybe 6 - 8 months now. Best case scenario is Q2 had the first impact of this commercialisation and Q3 will be ramp up of volumes?
Very difficult to say, unless we have someone from the market who has any idea of this or better still, easier to just ask management.
I sent an email to Ms Rekha Singh - company secretary but no response yet - also on the pollution issue.
I think at 15x earnings this is probably correctly values considering the plant closure risk etc. However if rivaraxoban is not yet come through then maybe its slightly undervalued.
Usually share prices jump higher on earning surprises, for the moment everyone is expecting no surprises.
If Q2 has first or second impact it will be a huge surprise
already seeing pull back from 270 levels. Given that it has been 3 weeks since plant closure it feels like its not a straight forward reopening. Maybe closed for 6 months like last time.
You won’t get much time to accumulate this
Today the pending buy orders were several magnitude higher than sell orders
Markets are weak but after results we might be back to all time high
The inspection by government regulators is successfully over so any moment, probably before results
Last time it rallied 15% on environment issue being satisfactory resolved
If you look at fredun pharma, the pe there is so high for non novel pharma products
It’s only a matter of time this will regret
The order volume says a lot of what’s happening behind the scene
Looks like a decent set of results, no large increase in revenue so we can safely assume that rivaroxaban is all baked in now. So only capacity expansion related revenue increase is awaited.
One good news is we got confirmation that TN pollution board have inspected the facility and management expect revocation of order.
Someone had mentioned that revenues didn’t fall last time when plant was closed as they had inventory ,looking at balance sheet they still have 38 cr worth of inventory compared to 45 cr in sales so next quarter results should not drop by much .
Any idea when the plant might reopen again will it take 6 months like last time ?
The order to allow plant to function again can come at any time now
I was told last Monday that they were expecting it then
They probably were dissatisfied but anyway gave an update that the checks were satisfactory by pollution board
Government offices usually take a lot of time for these things
Also I noticed cash on hand is built up allowing them to finish capitalisation and double capacity as promised in the annual report
Looks like everything is lined up
The Company has received Revocation of Temporary Closure Order from Telangana State Pollution Control Board (‘TSPCB’) on 11.02.2021 as against Factory Temporary Closure Order dated 22.12.2020
Rating agency gave same rating despite having plant shut down.
Promoters buying from open market but in very small lots.Everest Organics Limited.PDF (405.8 KB)
I am told rivaroxaban Is not easy to commercial, the new plant is not going to be ready as soon as I expected
Given the above, I don’t have much faith that the company will do exceedingly well from here onwards hence I have decided to exit all my holdings
Dear EdwardLobo- Where you got the information about rivaroxaban. In the last AR they clearly mentioned that it is commercialised.
Plant shut down may not be a significant affect on this quarter as they had inventory to meet the requirements.
With thanks
If they have commercialised it’s not generated the revenue I was expecting
You are right the ongoing revenue won’t be affected however my preference is growth stocks and while Everest fundamentals are still great and the environmental issue is a minor blip, I dont think a big growth is coming until their new plant is live
The new plant will take some time as the annual report said the cost is roughly 10cr and the capital WIP where you track the progress of the new plant in the last financial is hardly encouraging
