Indoco remedies

Indoco Remedies Q2 concall summary -

Sales - 482 vs 433 cr
EBITDA - 72 vs 88 cr (margin@ 16 vs 21 pc)
PAT - 35 vs 50 cr

Sales break up -

Domestic formulation @ 228 cr, up 9.5 pc. Ophthalmology and Stomatology did well in Q1. Due late rains, season for Anti- Infectives, Respiratory therapies has been pushed into Q3

International formulations @ 195 cr, up 12 pc. Regulated markets revenues @ 147 cr, rest from emerging markets. Emerging mkts revenues grew by 72 pc @ Rs 47 cr

APIs @ 36 cr, up 95 pc

Contract research and analytics @ 6 cr, up 74 pc

Goa formulations plant inspected by US FDA in 3rd week of Oct. Plant has received 04 observations

Indoco’s rank in IPM @ 32nd position with Mkt share of 0.65 pc

Management is guiding for H2 growth of min 15 pc in Domestic formulations business

There was some overstocking of a few of company’s products in Europe due to COVID. The inventory has now normalised. Expecting good growth from Europe in Q3, Q4. Guiding for 400 cr kind of annual sales from Europe in FY 24

Expect descent margin recovery ( 2-3 percentage points, min ) in H2. Had one time expenses wrt remedial actions at Goa, Site -2 in the second Qtr

Company’s product portfolio in India has a very heavy acute therapy bias

Focussing more on therapies like Opthalmology, Stomatology to reduce dependence on Respiratory and Anti-Infectives

Have realised some profit share on the sale of Brinzolamide ( used to treat high pressure inside the eyes ) in US. Same is likely to continue in Q2 as well. Company makes its API in-house at its API facility

Full FY R&D guidance at 5-5.5 pc of sales

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

Hoping for a descent turn around in H2. That should be a nice tail wind for the stock price