Gufic BioSciences Ltd

Gufic came with flattish nos, they are confident of growing at 15-20%. Concall notes below

FY23Q3

  • Navsari: 3 blocks (Unit I → legacy; Unit II → EU approved; Unit III → Penem block commissioned in Q2FY23) + API block. Will convert Unit I into recombinant + infertility product
  • On track to commercialize Indore facility, civil work for utility & R&D work is 90% complete. Have received both shipment of imported equipment (lyophilizers) and installation is underway. Indore capacity is 1.5x of current Gufic capacity taking total capacity to 2.5x. It will take time to operate at high utilization as they are also targeting regulated markets from Indore. Hoping to get all accreditations by 2024, it will be commercialized in 2023 and initially cater to domestic markets + CMO
  • Sparsh division: Completed primary and secondary research to potential hospitals. The molecules will give potential revenue of 500-600 cr. (to Gufic) with 20-25% market share in their target market segment
  • International division: Received approval for 3 products (Colombia, Kenya and Philippines). Exports are being led by Germany, Colombia and Sri Lanka
  • Quarterly revenue run rate in FY23 is 170 cr.
  • Critical care revenues were flat (20-22 cr. of stock returns)
  • Other expenses is higher this year as there has been more spends on biological R&D. All these investments should lead to 15-20% growth on a sustainable basis
  • Dual chamber bags for penems: NPPA has given only a 15-20% higher price realization which is not feasible. Are waiting for meropenem revised MRP and for permission to launch the product at a higher MRP. Hopefully it will get launched by Q1FY24
  • Receivable cycle has increased in the CMO business from 40-45 days to 70-90 days across the industry
  • Domestic market: 45 days receivables

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

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