Kopran ltd ( bullish commentary ) -
Q1 FY 25 concall and results highlights -
Revenues - 139 vs 117 cr
EBITDA - 18 vs 6 cr ( margins @ 13 vs 5 pc )
PAT - 11 vs 3 cr
Segment wise revenues -
APIs - 90 cr vs 73 cr YoY ( Domestic : Export sales @ 44 cr : 46 cr ). Bulk of API sales come from - Carbapenems, Macrolides, Urological Antibiotics and Anti - Hypertensive therapeutic categories
Company has 02 API manufacturing facilities. Company is a major player in sterile Carbapenems and a leader in - Atenolol molecule category
Formulations - 49 cr vs 44 cr YoY ( all exports - to both regulated and unregulated markets ). Ratio of Penicillin : Non Penicillin based formulation sales @ 34 cr : 15 cr
Formulations plant is located @ Khopoli, Maharashtra - making dosage forms like - tablets, capsules, dry powder and suspensions
Q1 is generally a lean Qtr for company’s formulations business. From Q2 onwards, should do a formulations sale of 80-90 cr / Qtr
Have received environmental clearance to commence production at the Panoli plant ( new API facility ) from Central Govt. State Govt’s clearance is awaited shortly
Company is planning to put up a vial filling line for their sterile Penems like - Meropenem, Doripenem, Ertapenem. This will help them improve their margins
Company is guiding for a topline growth of 18-20 pc with an EBITDA of around 100 cr for FY 25 ( LY EBITDA was 74 cr )
In Q1, EBITDA margins in API segment were 14 pc and 11 pc in the formulations segment. As the formulations revenues pick up, their margins should improve because of operating leverage
This FY, company hopes to clock a full year EBITDA margins of 14-15 pc. In 3-4 yrs, the aim is to reach 20 pc EBITDA margins. Also, aim to achieve 1200-1300 cr of topline in 3-4 yrs
The new Panoli plant should start contributing meaningfully to top and bottomline wef FY 26
Over a 2-3 yrs period, the Panoli plant should add 200-300 cr to the topline ( ballpark estimates )
However, for the Panoli plant to get US FDA approval, it ll take a min of 3 yrs from now
All the KSM that the company is making and hopes to makes are for captive consumption ( to improve backward integration ) and should help them reduce their dependence on China
For FY 26, FY 27 - the API segment should grow by > 30 pc CAGR because of operationalisation of the Panoli plant
Formulations should grow @ 10-15 pc CAGR for next 2 yrs
For the Panoli plant, company shall be focusing on CNS, Cardio and Anti-Diabetic ( basically all chronic therapies ) therapies.
Capex guidance for next 3 yrs combined @ 100 cr ( includes the Vial-filling lines for the Penems )
Company’s top selling molecules are Meropenem and Atenolol - contributing to roughly 20 and 15 pc of sales respectively. The next three molecules combined contribute to another 20 pc of sales ( roughly )
Company is the second largest maker of atenolol in the World ( first is IPCA labs ). In Morepenem, company faces competition from Aurobindo, Sun, Hester, Rajasthan Antibiotics. However, they have been the largest producer of Morepenem in India in last 6 months
Teva ( a global - generics giant ) is the largest consumer of Atenolol. They have recently stopped producing this API. Kopran has already supplied validation batches to Teva. Expect, Teva’s entire business to be routed to Kopran over a period of time ( in about 1 yr or so )
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
