Gufic BioSciences Ltd

Gufic receives approval from NMPA, China for Prilocaine API

ff6466b7-fa92-48d5-afd7-e4337d33fb39.pdf (291.9 KB)


Hi all,
I was trying to analyse this company. It looks like the company does not gives segment wise results, they just publish a pie-chart. How do you analyze the segment wise numbers, any particular way or just a rough estimations?

Manufacturing Facility
Unit-1 (Navsari) Botulinum Toxin Facility, Lyophilized/Powder Injectables Facility, Natural Products (Topical/Liquid), API Facility
Product Capacity
Lyophilized 18 mn vials p.a
Ampoule 12mn p.a
Ointment 6mn tubes p.a
Lotion 6mn bottles p.a
Syrup 6mn bottles p.a.
PFS 2.8mn PFS p.a.
Unit-2 (Navsari) Lyophilized Injectables Facility, Capability to manufacture Liposomal Amphotericin B and Depot Injections (This is EU approved)
Product Capacity
Lyophilized 30mn vials p.a.
PFS 30mn PFS p.a.
Belgaum Facility Natural Products Facility
Product Capacity
Capsule 60 mn p.a.
Powder 3.6 mn p.a.
Unit-3 (Indore) Lyophilized/Powder Injectables Facility, Capability to cater to regulated
markets such as US & EU
Product Capacity
Lyophilized 36 mn vials p.a.
PFS 15mn PFS p.a.
Liquid Injections 60mn units p.a
Penem Block (Navsari) Dedicated facility for Penem Carbapenems (Lyophilized / Dry Powder Inj / Oral Solids / Dual Chamber Bags)
Product Capacity
Lyophilized 3mn vials p.a.
Dual Chamber Bags 24 mn IV bags
Dry Powder Inj 30 mn Vials

Penem Block in Navsari commercialised in the recent quarter, and the Indore plant is expected to commercialise operations by Q2FY24.

Disclosure: Invested


You seem to have research this very well ( especially how well versed you seem to be with names of the formulations). A few questions:

  1. Why are exports are only 15% for a company that has been betting on exports for couple of years?
  2. It seems spread out over many products, but are the market sizes of each of those big enough? I saw on Volza total import value of Dalbavancin API was 2.2 million dollars.
  3. What are the Key Metrics (AND WHY?) you are tracking and what is your investment thesis?
  4. My perception was that botox is very difficult to handle and this is one of the few companies that does so great opportunity. Now I saw that’s a 120cr market but ofc people chasing beauty shall surely rise along with opportunity for people like us:)
  5. Any great resource you’d recommend to understand this market and company? PPFAS does amazing deep dives into sectors, something similar?
1 Like

The best question Common Stocks and Uncommon Profits ( one of the all-time-great investment books) asks companies:

What are you doing that your competitors aren’t, yet ?

For Gufic, it was lyophilised injectables at one time where the industry seems to now moving. In the future what do you think that it could be?

They spend 8-10% of revenue in R&D but judging future R&D is perhaps too difficult for a lay investor. (Scuttlebutt HELP!). What factors does this community think it could be for Gufic to give better growth than the industry?


Q1-FY2024 call notes

  • Indian first then world - better magins
  • Criticare and exports growth this year - will drive 15-20% EBITDA growth
  • Capacity in navasari will be finished by end of 2024
  • Healthcare mkt is 2.1Lcr and will grow to 7-8L cr in 9 years . Even if international market goes for a toss, Domestic market will have enough demand for us.
  • Capex and running cost most imp for any plant
  • Expertise and exp in lyophilised is will allow us to handle the HUGE capacity inc
  • 35% cap utilisation in Penem block
  • Interest costs on capex have pulled down margins
  • R&D focus: Biologics in vaccine and new botulinum drug delivery systems
  • Criticare:
    • made a comeback
    • Handling all New age infectives
    • Microcare - secondary line of oncology therapy
    • Primacare- rural
    • Increasing addressable mkt by new products^
    • RM sensitive products (Sparsh too). Growth therefore should be judged by volumes not profits. Last year prices were really volatile
    • 10-15% growth in value due to eventual erosion of prices and 30% growth in volumes
  • Penem advantage
    • Capacity is 40% of indian need (UNSURE if I heard that right)
    • Lots of players produce powder penems but Gufic is unique as we have dual chamber bag, lyophilisation and powder filling machines. So offering is unique.
    • Dedicated block at navsari unlike others.
    • Will do backward integration to make bags as well for dual chamber bag
  • R&D thought process: 4-5 core competencies in therapeutic, data analytics and medical experts forcast disruptive cahnge in 5-10 years. Info is international mkt. Try to create USPs like drug delivery systems . Back it up with with other factors: see what projects go off patents, new disruption, price pain points. Infra, marketing, sales must offer support to new products.
  • In 3-5 years we bring down the cost to make the product affordable. Scale brings in financial viability.
  • Indore will be the only major capex in next 2-3 years.
  • 1024 docs have used Stunnox since launch 24 months ago
  • GC margin in CMO: 30%
  • GC 55% own business margin
  • While one who controls API rules but Pricing in API is eroding so we are evaluating whether to drive deeper there or be happy with what we have.

Personal comment:
CEO Pranav is well versed with the pharma knowledge, strategy, and qualitative aspects of opportunities they are chasing. He refers Mr Rongta (CFO perhaps) for all questions that involve quantitative aspects. (No comments or judgement. Just an observation)


FY23 annual report notes

Long term aim

  • Become global leader in the parenteral domain with a portfolio including nanoparticles, liposomes, microspheres, suspensions, and emulsions
  • Invest in vaccine platform, innovative aesthetic and neurological solutions, and novel immunotherapies for cancer treatment

New product development, launches & R&D

  • Launched 20 generic products in FY23 with 10 more to be commercialized soon
  • 22 new products are in development phase
  • Received DCGI approval for manufacturing and marketing of Biapenem Dual Chamber IV Bag
  • Launched Ceftazidime + Avibactam – received good response
  • Launched Dydrogesterone - was very successful. Working on Sustained Release Tablet form of Dydrogesterone
  • Launched new Zinc based multivitamin & multimineral formulation to augment mass market division
  • Will launch novel Oral form of Isavuconazole for treatment of invasive aspergillosis
  • Will launch novel analgesic - Polmacoxib (Stellar division) for osteoarthritic pain. Also plan to launch combinations of Polmacoxib with a muscle relaxant
  • Will launch moisturizing agents, anti-aging, Hyperpigmentation, Sunscreen agents in Aesthaderm
  • Will launch a novel once-a-week anti-infective – Dalbavancin for 1st time in India (received marketing authorization from DCGI)
  • Initiated registration for a range of Hyaluronic Acid based Dermal fillers to complement and augment product basket in aesthaderm
  • Received approval for Anaesthetic product Prilocaine for supply to China
  • On verge of a break-through in development of an innovative topical formulation of Botulinum Toxin which will be launched very soon
  • Initiated trial of a new product made from an Indian gum resin by a standardized extraction process for use asthma management. Clinical trial will be completed in FY24
  • Looking to expand market penetration for Enoxaparin within the infertility segment
  • Imported technology: Penem in dual chamber and super purified menotropin
  • R&D: 7.3 cr. (vs 7.1 cr. in FY22). Capital expenditure of 2.1 cr. (vs 2.6 cr. in FY22) & revenue expenditure of 5.2 cr. (vs 4.4 cr. in FY22)
  • Installed high-capacity lyophilizers to increase batch sizes, reduce processing times in lyophilization cycles and extend shelf life of products
  • Lyophilized products span therapeutic areas, including Antibiotics, Antifungals, Cardiac, Infertility treatments, Antiviral solutions and proton-pump inhibitors (PPIs)

Company developments

  • Maintained leadership position in lyophilized injectable products in Anti-fungal and Anti-bacterial segments
  • Hospital reach: 1500+, field force: 1000+
  • Surveyed 8000+ hospitals and started supplies in few of these
  • Regained business in infertility segment that was lost during COVID-19. Focus is on building brands within Hormonal category (HMG, HCG including most potent form of HMG which reduces chance of failures of IVF cycles) and offer newer drugs and newer drug delivery systems with PFS (Pre-filled Syringes) and DCS (Dual Chamber Syringes)
  • Stunnox gained momentum to reach amongst top 2 brands
  • Completed a split face clinical trial between Stunnox and Botox
  • Gufic’s brand of Boswellia Serrata continues to retain leadership through brand Sallaki
  • Arisia completed training of 50+ Gynaecologists in cosmetic gynaecology using toxin, fillers and FDA approved energy based devices. Arisia also trained 20+ Dermatologists and 10+ Neurologists in advanced techniques of using botulinum toxin injections in various aesthetic and neurological indications
  • Auto-loading and unloading technology for lyophilized products ensured no human intervention during manufacturing process at Navsari
  • APIs will largely be used captively

Capex (187.6 cr. vs 87.45 cr. in FY22)

  • Validation of Indore facility will be completed by H2FY24
  • Operational launch of Indore facility is scheduled in October 2023, with revenue contribution from Q3FY24
  • Capital advances: 55.87 cr. (vs 34.32 cr. in FY22)

Geographical segment & financials

  • Exports to 20+ countries, 190+ products with 150+ products under pipeline in 40+ countries

  • Received 4 new international approvals from Columbia, Uganda and Ecuador

  • Key markets: India, Germany, Switzerland, South Africa, Russia, Canada, Brazil, Europe

  • Sales returns: 110.2 cr. (vs 68.95 cr. in FY22)

  • Sales return provision: 6.4 cr. (vs 7.6 cr. in FY22)

  • Geographical breakup

  • No Single Customer accounted for 10%+ of revenues in FY22 and FY23


  • Income: 86 cr. (vs 73.2 cr. in FY22)
  • Expense: 271.6 cr. (vs 230 cr. in FY22)

Trade receivables (huge red flag): impairment of 69 cr. (vs 39 cr. in FY22)

Credit risk increase: In FY23, they had 10 customers (same as FY22) that owed them 100 cr. (vs 111 cr. in FY22) and accounted for 48.71 % and 73.25 % respectively


  • Employees: 1628 (vs 1382 in FY22)
  • Average percentile increase in remuneration for employees other than managerial personnel was 12.32%, increase in managerial remuneration was 1.99%
  • ESOP 2023 program: authorized 5 lakh stock options
  • Very high employee churn (40% turnover in permanent employees)
  • Equity investment of 77.68 lakhs in Selvax Pty (13.07 lakh shares ~ 2.67% equity)
  • Share price: 177.1 (low), 290 (high)
  • Shareholders: 39’563
  • Auditor remuneration: 36.93 lakhs (vs 32.8 lakhs in FY22)
  • Number of customer complaints: 23 (vs 38 in FY22)
  • Is in the process of implementing SAP to enhance and fortify internal control mechanism
  • Bankers: The Saraswat Co-operative Bank, UCO Bank, SBI, Axis, HDFC Bank. Bank loan rates was ~8% (except 11.4% for a 4 cr. property loan from others)

General trends

  • India’s drug pricing authority sanctioned 12.1% price increase for scheduled drugs

  • Over 60% of APIs are procured from foreign sources, with certain APIs exhibiting import dependency rates of 80% to 90%

  • 500 Indian API manufacturers contributing about 8% in global API Industry

  • India supplies 20% of generics globally

  • Indian Pharma Industry had growth of 7% in 2022 with market size of Rs. 1.94 cr. Chronic therapies grew by 9% and acute therapies by 5%

  • IPM has grown at a CAGR of ~11% in domestic and ~16% in exports over last 2 decades

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


Need to see credit impairment with these two data points . ECL has not gone up much & Need to get clarity from management but receivables are still in considered good bracket .there is a increase of 6 cr in dues past 6 months vs past year .



The second picture is important.
140cr is less than 1% default probability. Overall he expects 2.1% to be bad debts out of total debtors of 209.84cr. And it says Undisputed Trade Receivables - Considered Good, in Considered Doubtful the section is blank.
It is scarily presented by writing the words “Credit Impaired”, because only 1.08cr of debtors seems to be impaired at 96% default probability.
Rest of “credit impaired” debtors seem to have a much lower default probability rate.
He had also said in one of the concalls 2-3 qtrs ago that the working capital increase which has impacted cash flow will reverse in the coming FY, we should see positive OCF again in 6 monthly statement. Nevertheless we should ask about this in next concall to have 100% clarity. Hope this helps.


Average expected loss rate has decreased as a trend, still doesn’t answer what you pointed out and should be clarified on call.

But, as receivables took a jump, this might show the current average expected loss rate lower

Just an Observation


Gufic Biosciences was founded in 1970 as an injectable manufacturer (lyophilisation) and then exited API & formulations business by selling its top 6 brands to Ranbaxy in 1997. It re-entered formulation in 2007. It is a R&D focused pharma company (8-10% of revenue) whose business is distributed as such

Domestic Branded segment: 50% revenue with Gross margins 55-60%. Engaged primarily in critical care (life-death operation), Infertility, among others.

Contract Manufacturing (30% revenue contribution at 30% margins) of lyophilised formulations for all top pharma cos of India (one time 170cr topline jump in FY22 earnings for Remdesivir)

Exports (15% revenue contribution) to mainly developing countries and few developed markets like Germany and Switzerland

API (5% revenue contribution) 50% is captive consumption reducing dependence on Chinese APIs.

My understanding is the company primarily runs CMO business along with branded segments as cash cows to fund extensive R&D expenditure. Both father-son duo and rest of the management are experienced & educated in pharma. Son (CEO) studied at John Hopkins (World rank 1 in biotech).

Moat: Pioneering new technologies (drugs and drug delivery systems)

They have consistently brought new technology to India. Lyophilisation is the process of freeze-drying liquid injectable formulation to powder form for easy transport. They were pioneers in this tech but it is now a commoditized market so they are investing in scale- one of the largest lyophilisation capacities in the world. Similarly they are the only Indian co to have got a licence to handle Botulinum Toxin and made a product as effective as Botox (Very toxic).

Key Thesis Pointers

Company just finished a huge capex, new lyophilsation factory will start in September. Operating leverage will begin to play out and management consistently tries to do backward integration (captive API production, CEO mulled making plastic bags for dual-bag chamber tech in the future in concall).

Apart from core business growth in CDMO and branded segment, technology advancements can give pleasant surprises as company regularly brings new technology to India. As the pharma sector picks up again, institutional buying will be the real driver of stock price as it is an established name with competent promoters and track record.

  • Just a 2500 cr company with 75% promoter holding. 23% holding with the public Few to no analysts tracking it.
  • EU, WHO etc certified manufacturing facilities and collaborations with leading scientists around the world with whom it brings tech to India ( eg Collaboration with Prime Bio in USA to launch Botox equivalent, first immuno-onco therapy with an Australian company etc)
  • New Indore facility that will make capacity 1.5x of present. It will come live this September. Company finished a Capex of 270cr with 170cr from internal accruals…
  • Strong presence in fast growing market segments - infertility, strong antibacterial meds, dermatology etc

Questions/Risks I’m evaluating

  1. They run the risk of slow market growth or success in new industries they are getting into (like botulinum applications in beauty/anti-aging which is only a 120cr market right now dominated by Botox which is a global brand). Therefore R&D not paying off.
  2. Company is difficult to track due to the wide range of products. Trying to Scuttlebutt with industry professionals find switching costs, image of the company. Doctors on Valuepikr forum have said good things.
  3. Return on capital invested in R&D and verifying strong track record of entering and dominating that market.

Disc: invested @270 (15% of portfolio)