Ins’t these work on Cost + Profit basis, No significant Pricing Power, No B2C Sales.
If the Drug becomes successful then volumes increase with steady revenues.
So how come Traffis effect these in the Longterm, definitely in the Short term, till the Next price negotiations. Raw Material price changes itself are part of these businesses price negotiations, then why not these tariffs, CDMO are not final sellers, these are B2B. Ultimately the final consumer will bear this.
Trump has reiterated his intentions to tariff Pharma, and stocks have corrected as a result.
I think people are only taking his statement at face value without trying to understand the multi-order implications.
US-China trade relations seems very threatened, and drugs are a critical import that US cares about more than cheap clothes or shoes.
In the long-term, US may attempt to localize manufacturing, purely out of national interest, but it is not feasible in the short-term.
Trump intends to tariff Pharma, but China will be a much bigger loser. A lot of the heat will be directed towards China to reduce reliance on them. In the short and medium-term, this demand will have to be satisfied and India comes out as a clear winner due to strong relations with the US. Customers will also see Chinese reliance as a threat, purely due to increasing tensions between the two countries, and may even pay a premium for Indian supply.
very Good Anti Thesis Point for Neuland,But its difficult to comment without knowiing the potential of molecules in pipeline,Agree with point that mass market drug has better economics but Lot of molecules in phase 3 does mean high optionality,Whether they are mass market or not,whether Neuland will be the sole supplier we don’t know,But they should have learned from past experiences and new capexes kind of Indication of that Invested and Biased (Bought at low valuation)
I think the concall was today at 5 pm. I missed to join it. I can not see the recording/transcript uploaded yet. Did anyone listen to the concall? what is management saying on the revenue drops (QoQ as well as YoY. Annual revenue is also down compared to FY24). the OPM is also down.
Concal : Very insightful commentary by the management.
Share may fall as per market mood but Q4 seems to be the base from which performance is expected to pickup. The growth opportunities are significant and management seems to have visibility for at least next 2 -3 years.
If you have horizon of 2-3 years, please listen to the concal twice before selling your holdings .
I Will summarise the concal once transcript is available.
Disclosure: Invested and will continue to hold for long term (5 years).
Sales dipped due to nature of their business. One reason is due to some products which contributed revenue in FY24 didn’t contribute in FY25 (product life cycle)
EBITDA margins dipped due to change in product mix and lower sales and profit margins.
A new production block at their Unit 3 plant is now complete and they expect a boost in revenue from the second half of FY26 from it’s products.
Dual strategy of focusing on high-profit specialty products and increasing volumes for their main Prime APIs
Filed their first US regulatory document for a peptide product called Difelikefalin
Potential challenges include individual product performance, currency fluctuations, and raw material price changes.
The 300 crore investment is designed to create very large-scale manufacturing capabilities for peptides that Neuland doesn’t have right now.
Expect tariff costs (if applied) to be passed on to their customers and eventually, to the end patients.
Prefer to compare FY26 growth to the FY24 base. CMS segment is expected to grow more, than GD due to lower base in FY25.
Margins are expected to improve significantly from FY25 levels however not as good as FY24 level which was an exceptional year.
Launching a high volume product in CMS Segment as the second supplier and is expected to be a steady business and would be among their top contributing product
Reason for revenue decline in GDS specialty molecules is because there are many low volume molecules in it which have uneven demand and bring lumpiness in the business.
Can any body advise which API they are referring to.
“So I think, obviously, won’t be able to reveal much about the new molecule that will get commercialized. But definitely, what I can share is that it is a commercially approved drug. It’s been out in the market for a few years now. The first source is non-Indian source and Neuland is getting added as a second source. In fact, Neuland has been added as a second source. It’s just that the timing of commercial supplies is set to start soon. And we are very excited.”
