Many hospitals which used to give CGHS rates , removed it citing government body issues. Supreme court judges are not advising correctly here.
Govt first need to correct the process. Then ask private hospital on common rates.
Moreover, government infrastructure is too shady and maintenance is low.
Private hospitals have more staffs and need to recover money for the manpower and infrastructure. Money is for the service and care which private hospitals provide better than govt hospital. Hence no question on common rates should be raised by the Supreme court.
1 Like
My question is that will it be for ALL Treatments? Super speciality treatments are not available everywhere, if government put price caps, it will deteriorate quality of treatment from private hospitals at least, this will negatively serve the purpose.
Anyhow, Government can increase there quality with same fees and today’s capitalist world to tell companies to reduce rates will not give right signals to world.
Let us see how it unfolds.
D: Invested in Global Health and Yatharth
2 Likes
This isn’t entirely true. No one can beat the medical expertise of an AIIMS for example. That’s simply because the ingrained culture of medical exploration in govt hospitals. I come from a medico fam (parents have been profs at top medical institutes), so I’ve seen things in a bit upfront.
However, it helps GoI when pvt sector capex comes up since that reduces the stress on govt investments. It’s not that the patient is forced to visit private sector hospital, but for a lot of cases, routine stuff, pvt sector becomes the choice for people due to better facilities, etc.
This is a knee jerk move by SC and I’m pretty sure GoI won’t announce price ranges or price caps. They want to encouarge medical tourism and shunting out pvt sector for good isn’t the way to do that.
EDIT - thinking out loud, but this has significant 2nd order effects and perhaps suicidial. If pvt hospitals start earning less, doctor’s remuneration goes down (most docs earn on a per case basis). If that happens, incentive for medical education goes down. Mind you medicine education is a long-time investment (5 years MBBS + 3 years MD + 3 years super speciality) and you start as a junior doctor then! Pretty sure this won’t sail through.
D - Added Yatharth today.
9 Likes
Hospitals cannot run on CGHS rates alone. If all patients have to be treated on CGHS rates hospitals will go bankrupt. Moreover rates should ideally be revised yearly or at least once in three years to keep up with inflation. But CGHS rates aren’t revised that often.
The only way that is happening right now is the CGHS patients are being subsidised by government funds in government hospitals, student fees in medical college hospitals, and other paying patients in private hospitals.
Capping how much hospitals can charge is counterproductive. It will lead to cutting corners and avoiding investments in complex infrastructure and treatments altogether. A good example is the capping of stent prices, which essentially meant companies stopped selling better quality stents and even the people who could afford to pay for them couldn’t get it in India. Now imagine that scenario playing out in every speciality for every type of treatment. Expensive drugs won’t be available. Advanced equipment won’t be procured. Doctors won’t be incentivised to learn cutting edge therapies. We’ll just end up going back to the days when the elite travelled abroad for treatment, and the poor just had to let the disease run its course.
Also gone are the days when central institutes like AIIMS and PGI had the best doctors in every field. As things stand the best doctors may start their careers in these institutes but eventually move to work in corporate hospitals, simply because the pay is incomparable.
6 Likes
If the Supreme Court’s main concern is ensuring right to healthcare, that is a very complex issue that simply cannot be solved just by capping consultation fees and bed charges. The biggest hurdle in my opinion is the grossly skewed distribution of clinics, nursing homes and hospitals across rural and urban areas. Large swathes of the population in rural India have no access to even primary care. At the same time, big cities are swamped with more hospitals than the local population needs, leading to cut-throat competition and unethical practises just to survive. The reason for this is a big difference in the quality of life between these two places. Poor infrastructure, lack of good schools, employment opportunities for spouses, comfort amenities–all of these factors cause doctors to flock to the cities and grind it out rather than go to underserved areas where they will be not only be respected more, but earn more as well.
Solving discrepancy in healthcare access and availability is more than just making it cheap. It will require a general upliftment of the underserved regions. Capping charges is not going to do it.
3 Likes
Let’s understand what supreme court said:
The Court strongly criticised the Centre’s failure to enforce the 14-year-old Clinical Establishment (Central Government) Rules, which entail the notification of a standard rate for various medical treatments and procedures, in keeping with the living standards of different region.
Now what is above rule
Under this, all hospitals and clinical establishments must display rates charged for each type of service provided and facilities available for the benefit of patients at a conspicuous place in the vernacular as well as in the English language and charge rates for each type of procedure and service within the range of rates determined and issued by the Centre from time to time, in consultation with the state government," the plea stated.
In gujarat, CM at that time, who is PM now, tried to impose such rules to hospital. As per it hospital must list all the service provided by hospital along with charges.
See as a capalist or semi-capalist society, as a consumer we are not bothered by charges but transperancy must be there. As example some of us pay say 5 lakhs to specilist like Dr Devi shetty for cardiac operation, however hospital should mention this or inform patient about this prior in written. Most of time you get estimation like 3 lakhs but you don’t know what it includes in cost and mostly the final bill is higher than estimated amount.
One healthcare fund manager is saying that in hotel you know how much you will pay however in hospital, the hospital will decide how much you stay and pay.
In short it’s just implementation of old rules of 2010 nothing new. In long term it’s good for industries and for investors.
11 Likes
It says the same as I illustrated in my previous post.
Further to that, what I believe is that the matter is in supreme court, like new India we have new supreme court, who is not known to drag the matter under current CJI, example is ram mandir, electoral bond etc. So there won’t be an escape for hospitals & Government.
It seems CGHS rates won’t be applicable however there will be more transparency in rate and billing etc. This may impact profitability of hospitals for sure - is my loud thinking.
Disc: Holding a small portion of HCG, recently trimmed. Am pathetically wrong in the current bull run hence take this as ill advice.
3 Likes
Zydus Lifesciences ( Very Bullish commentary and important business developments ) -
Q3 results and concall highlights -
Sales - 4505 vs 4257 cr
Gross margins @ 67 vs 64 pc
EBITDA - 1102 vs 956 cr ( margins @ 24.5 vs 22.5 pc )
R&D expenses at 314 vs 344 cr ( @ 7 pc vs 8 pc of sales )
PAT - 789 vs 622 cr
Q3 Capex @ 213 cr. 9M FY 24 capex @ 650 cr
Region wise performance -
India -
Sales @ 1427 vs 1231 cr, up 16 pc
Branded India business and new Innovative portfolio grew strongly. Witnessed strong growth in Cardiac, Anti-Infective and Anti-Diabetic portfolio
Continue to maintain leadership in Nephrology
Company has 8 brands in top 300 brands in India. Also has a commercial portfolio of 13 Biosimilars in India. Has 09 more biosimilar molecules in pipeline
Company has also commercialised 03 NCEs in India - Saroglitazar ( for NAFLD ), Twinrab ( a biologic drug used for treatment in Rabies ) and Desidustat ( for Anemia )
India - FMCG segment -
Sales @ 397 vs 412 cr
FMCG segment witnessed weak demand scenario
Everyouth, Nycil - witnessed strong growth
Sugarfree, Nycil, Glucon D, Everyouth (peel-off) maintained their market leadership positions
US formulations -
Sales @ 1842 vs 1925 cr
Base business saw strong volume growth. Launched 11 new products including - ZITUVIA ( a 505(b)(2) product )
Emerging Markets -
Sales @ 493 vs 378 cr
Witnessed strong growth in Asia Pacific, Africa and Europe
Innovation -
Commenced phase II trials for ZYIL 1 for Parkinson’s. Phase II trials are also on for this molecule in India for ALS ( a rare neurodegenerative disease )
Completed phase II trials in India for ZY9489, an anti-malarial drug
NCE - Saroglitazar Magnesium ( already approved in India for non-alcoholic fatty lever disease ) - commenced recruitment of patients for Phase II trials in US
Completed asset transfer of CUTX - 101, a Copper Histidinate product for treatment of Menkes Disease. Rolling out NDA application for the same in US
Company is presently in the process of adding 700 MRs in India to accelerate the formulations business. Full effects should be visible by Q1 FY 25
Acquisition of LiqMeds ( a UK based company ) specialising in Oral Liquid formulations - Zydus Life acquired LiqMeds in Oct 23 for 700 cr plus yearly payouts till FY 26 on achievement of certain performance liked milestones. It’s already a profitable business. Most of their products are based on 505(b)(2) opportunities. The business is expected to scale up over next 1-2 yrs
All three NCEs launched in India are doing really well. Company expects, Saroglitazar to become its biggest brand in times to come !!!
Company expects a slow pickup for ZITUVIA in US. It’s an important launch for the company. Should add significant value in FY 25
Company continues to enjoy exclusivity for Asacol ( used to treat inflammatory bowel diseases ) in US mkts
Company reported strong numbers and healthy margins even without Revlimid sales in Q3. Revlimid sales are expected to be recorded in Q4 and Q1 FY 25
Have a good pipeline of exiting launches in US till FY 27
EM business momentum is likely to sustain going fwd. Likely to keep growing in double digits
Company has launched a bunch of transdermal products in US in FY 24. Over next 2-3 yrs, these can generate 400 - 500 cr topline for the company
Disc: holding, inclined to add more, biased, not SEBI registered
5 Likes
Dr Reddy -
Q3 concall and results highlights -
Revenues -7237 vs 6790 cr
Gross Margins @ 58.5 vs 59.2 pc
EBITDA -2023 vs 1939 cr ( margins @ 28 vs 29 pc )
PAT -1381 vs 1244 cr
R&D spends @ 556 cr ( @ 7 pc of sales, up 15 pc YoY )
Cash on books @ 5900 cr
Region wise sales performance -
North America - 3349 vs 3056 cr, up 7 pc
Europe - 497 vs 430 cr, up 15 pc
India - 1180 vs 1127 cr, up 5 pc
Emerging Mkts - 1283 vs 1309 cr, down 2 pc
APIs + Pharma Services - 783 vs 775 cr, up 1 pc
Acquired the branded portfolio of MenoLabs in US. Its focussed on women health ( basically - health supplements ). The portfolio consists of 07 brands mainly targeting the symptoms of menopause and pre-menopause
Entered into exclusive collaboration with Coya Therapeutics for development and commercialisation of COYA 302 ( a biologic ) - for treatment of Lateral Sclerosis
Hoping for a double digit growth in India business in Q4. Focussing on in-licensing and collaborations to bring innovative products to Indian Mkts. Company is investing significantly behind this initiative
Also launched the innovative - Wearable Medical Device - Nerivio in India in Q3. It’s used for treatment of Migraine. The device is worn on the arm and works on Remote Neuromodulation principles to alleviate migraine symptoms. The device transmits electrical pulses to achieve Neuromodulation. Its a USFDA approved treatment
Generics pricing declines in US are mild to moderate
Company has received 09 product approvals in the China Mkt. 03 of them were received in Q3
Company had earlier acquired Premama Wellness ( in 2022 ) in the US mkts - also focussed on Women’s health. The recent acquisition of MenoLabs adds to company’s presence in Women’s health in the OTC space. That’s where the company intends to expand even more
OTC sales in US already contribute to 10 pc of company’s US sales
Company has a product launch pipeline of 26-27 products to be launched in US over next 2 yrs. This pipeline consists of a healthy mix of ‘tough to make’ and ‘tough to develop’ products
Company intends to launch 06 biosimilars in US by FY 30. First biosimilar launch is planned in FY 27. Company also has a pipeline of additional biosimilars to be launched till FY 35
Dr Reddy’s acquired the US generics business of Australia based Mayne Pharma in Q4 FY 23 for $ 105 million. Company is happy with the acquired portfolio’s performance in US mkts
Company is investing behind building capacities in its CDMO business - which is small right now. But they are seeing good demand trends in the CDMO space
Company has invested a lot in the API and Formulation capacities for GLP-1 products ( these are peptide based medicines ). Intend to launch them across the world mkts ( depending on patent situations - country to country )
Disc: holding, biased, not SEBI registered
SUN PHARMA -
Q3 results and concall highlights -
Sales - 12381 vs 11241 cr, up 9 pc
EBITDA - 3477 vs 3004 cr ( up 15 pc, margins @ 28 vs 27 pc )
PAT - 2561 vs 2181 cr, up 19 pc
Region wise sales break up -
India Formulations - 3778 vs 3391 cr, up 11 pc
US Formulations - 3973 vs 3465 cr, up 13 pc
EM Formulations - 2094 vs 2115 cr, down 2 pc
RoW Formulations - 1779 vs 1556 cr, up 13 pc
API sales - 466 vs 515 cr, down 9 pc
EMs include - Romania, Russia, RSA, Brazil, Mexico
RoW Mkts include - Western Europe, Japan, Canada, Israel, NZL, Australia
R&D expenses @ 824 cr, @ 7 pc of sales
Company is ranked No-1 in India with 8.5 pc Mkt share and 32 brands in top 300 brands. Top 10 brands contribute to 18 pc of India sales
Total manufacturing facilities @ 43. Formulations facilities @ 29, API facilities @ 14
Company’s speciality products contribute to 17 pc of company’s topline ( mostly coming from US ) and are growing at rates faster than company growth rates. Currently, the company has a basket of 26 speciality products
Speciality products include -
Illumya
Winlevi
Levulan
Absorica
Odomzo
Cequa
Bromsite
Xelpros
Yonsa
Sezaby
Kapspargo Sprinkle
Speciality products Pipeline -
Deuroxolitinib ( phase -3 completed )
Illumya for Psoriatic Arthritis ( phase - 3 )
Nidlegy ( phase - 3 )
MM- II ( phase -2 completed )
SCD-044 ( phase - 2 )
GL0034 ( phase - 2 )
Net cash on books @ Rs 8200 cr ( Ex - Taro ). Net cash including Taro @ 18,300 cr !!!
Launched 28 new products in India in Q3. Seeing good traction in the in-licensed products portfolio in India
Illumya, Cequa and Levulan grew strongly in Q3. Growth in US was partially offset by ongoing USFDA related compliance issues at Mohali, Halol plants. Launched 03 generic products in US in Q3
Brazil and Romania business grew strongly in Q3
Global Speciality sales grew 26 pc in Q3 to reach 2100 cr in Q3. This represents 17 pc of company’s topline
Generic Revlimid sales in Q3 in US were muted
Supplies from Mohali plant likely to ramp up over next few months. At sub-optimal levels currently
Nidlegy’s ( for Skin Cancer ) Phase - 3 data in Europe is very encouraging. It should be a significant product for the company going forward
In Q3 in India, company’s volume growth was around 7 pc which is far higher than IPM
Looking to in-license products in the GLP-1 category for India Mkts. GLP-1s should be important products going forward in India. GLP-1 products like Ozempic, Wegogy are global blockbusters
Disc : holding, biased, not SEBI registered
1 Like
Innova Captab ( new listing ) -
Company overview and Q3 FY 24 performance -
Company operates in 4 business segments -
Contract manufacturer for domestic formulators
Branded domestic formulations
Branded international formulations
Sharon Bio business ( acquired last yr )
Manufacturing base -
02 plants at Baddi - both for formulations. Capable of making - capsules, tablets, ointments, dry powder injections, dry syrups, liquid orals. Overall capacity utilisation @ 50 pc
01 plant at Dehradun - acquired with Sharon Bio - its a formulations facility - can produce tablets and capsules.
01 plant at Taloja - acquired with Sharon Bio - Its an API manufacturing facility. Combined capacity utilisation at 50 pc for Taloja + Dehradun plants
01 Greenfield multipurpose plant is under construction at Jammu. Company is spending 350 cr for the same. Expected to go live in H1 FY 25. Full capacities to ramp up over a period of 2-3 yrs. Its a formulations plant mainly focussed on - Cephalosporins, Penicillin, Carbapenems product families. To make dosage forms like - tablets, capsules, dry powder injectables, dry syrup and respiratory respules
01 R&D facility at Baddi. Setting up another facility in Panchkula
14 out of top 15 Indian Pharma companies are Innova’s clients
FY 23 - segment wise business breakup -
Contract manufacturing - 680 cr
Domestic branded formulations - 166 cr
International branded formulations - 81 cr
Sharon Bio - 192 cr
Q3 FY 24 performance ( includes the benefits of Sharon Bio’s consolidation ) -
Revenues - 302 vs 242 cr, up 25 pc
EBITDA - 47 vs 37 cr, up 27 pc
PAT - 25 vs 19 cr ( up 28 pc )
Q3 FY 24 Concall highlights -
Company is the third largest contract manufacturer of formulations in India
Acquisition of Sharon Bio has given company an entry into regulated mkts like Canada, UK, Australia, EU
9M revenues of contract manufacturing services in FY 24 has been flat in FY 24. This is because of price deflation in API prices that the company had to pass to its clients
Sharon Bio is currently doing an avg annual revenue run rate of 180 odd cr. Without any further capex, Sharon Bio’s facilities can generate another 90-100 cr of annual sales which can increase further with not so capital intensive de-bottlenecking exercise
A large chunk of money raised via IPO has been used for debt repayment. It ll lead of annual interest savings of aprox 20 cr. The only debt that the company is now carrying is 235 cr for Jammu project. Company is eligible to receive interest rate subvention on the same from the Govt of J&K. Effective interest rate on this loan is as low as 2.5 pc
The Jammu facility is expected to be commercialised towards the end of Q1 FY 25. Expect good ramp up from that facility only by Q3 FY 25
Jammu facility has a peak revenue potential of > 1500 cr / yr. Likely to be achieved within 5 yrs. Expect to do > 300 cr sales from this plant in FY 26
Expect the company level margins to improve going forward as the capacity utilisation from existing facilities improve. The Jammu facility is eligible for GST refunds from the Govt. That should also help the blended margins when Jammu facility starts contributing meaningfully
As the regulations fro Govt wrt Quality controls, good manufacturing practises keep tightening, its advantage organised / large contract manufacturers like Innova Captab
Disc: not holding, not SEBI registered, may buy in future ( on dips )
2 Likes
CIPLA Ltd -
Q4 FY 24 results and concall highlights -
Revenues - 6163 vs 5739 cr, up 10 pc YoY
EBITDA - 1316 vs 1174 cr ( up 13 pc YoY, margins @ 21 vs 20 cr )
PAT - 932 vs 522 cr
R&D spends @ 444 cr, @ 7.2 pc of sales
Segment Wise revenue break up -
India - 2417 cr, up 7 pc
North America - 1876 cr, up 11 pc
South Africa - 560 cr, up 26 pc
EMs - 830 cr, up 5 pc
APIs - 190 cr, up 40 pc
Total Debt @ 560 cr
Cash on books @ 8270 cr. Company is open to inorganic growth initiatives
Investments made in FY 24 -
Acquired Actor Pharma in South Africa for 400 cr. It has a portfolio of branded generics and OTC brands in SA
Got into a marketing and distribution partnership with SANOFI to distribute 06 of their CNS brands in India
Acquired OTC brand portfolio of IVIA beauty and Astaberry in India for 130 cr
Company has 21 brands ( branded generics ) in top 300 brands in IPM. These brands have a turnover > 100 cr each
Company has a booming Speciality - InLicensing business with FY 24 sales @ 761 cr. Last 5 yr CAGR here has been @ 39 pc
In addition, company has 5 OTC brands with sales > 100 cr / yr. These are - Omnigel, Nicotex, Prolyte ORS, Cipladyne, Cofsils
North American product pipeline -
Respiratory pipeline - 05 assets filed assets in last 12 months. Going to file 02 more assets in next 12-15 months. Major launches expected in next 12-15 months
Peptides and Complex generics - 12 assets already filed. Going to file 08 more assets in next 1-2 yrs. Multiple launches expected over FY 25-27
505(b)(2) assets - have filed 02 assets. Launches expected in next 1-2 yrs
Company has reached no 1 spot in the prescriptions business in SA
In India, Chronic portfolio’s share is now at 61 pc. Chronic business has a far superior gross margin profile vs Acute business
Company has hit 20 pc mkt share in Lanreotide
( injectable peptide - a 505(b)(2) products )and 13 pc Mkt share in Albuterol ( complex generic - inhaler ) mkt
Guiding for an EBITDA margin band of 24-25 pc for FY 25
30 pc of company’s total revenues come from Respiratory products
Company has set up a manufacturing facility in China. Have got US FDA approval for the same. Have spent aprox 430 cr to set up that facility. Also looking to penetrate / expand into the Chinese market
Company is likely to see 2 more years of strong Revlimid sales ie FY 25, 26
Company’s Pitampur and Goa plants are yet to resolve their USFDA issues ( warning letters ). Once company resolves these regulatory issues, there could be significant bump up in the US business ( company expects Goa resolution and commencement of supplies only towards the end of FY 25 )
R&D expenses to continue to remain in the band of 6-7 pc of revenues
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
Does INDIA alliance coming to power affects this matter in anyway? Views please
As far as healthcare sector is concerned, most governments tend towards populist policies. I think that’s mainly because doctors are not a vote bank, and hospitals don’t have a very strong lobby. This means regulatory overhang will always be there, irrespective of who comes to power. Universal price control will be difficult to implement. It will effectively kill high end work in the country. But like it was done for stents in heart disease, specific therapy costs are definitely candidates for capping.
2 Likes
Concord Biotech -
Company overview -
Company has a portfolio of 25 Fermentation based APIs. Company enjoys 20 pc global mkt share in 05 of the molecules that it makes
Manufacturing facilities at 3 places - all in Gujarat. All three are zero liquid discharge facilities. All are USFDA approved
Total installed capacity @ 1250 Meter Cube
Most of the APIs produced by the company are backward integrated to KSM levels
API portfolio primarily comprises of - Immuno-supressants, Oncology, Anti-Infectives and Anti-Fungal APIs
Company ventured into the formulations segment in 2016. Enjoys the benefits of backward integration. Company mainly operates in B2B segment for exports and domestic mkts with some B2C component only in the domestic mkt. Currently the company is only into oral solids. Going to foray into Injectables in near future
9M FY 24 financial outcomes -
Sales - 698 vs 580 cr, up 20 pc ( API revenues @ 562 cr, up 7 pc. Formulation revenue @ 135 cr, up 135 pc )
EBITDA - 302 vs 218 cr, up 39 pc ( margins @ 43 vs 37 pc )
PAT - 213 vs 148 cr ( margins @ 30 vs 25 pc )
Q3 FY 24 financial outcomes -
Sales - 241 vs 241 cr
EBITDA - 106 vs 112 cr ( margins @ 44 pc 46 pc )
PAT - 75 vs 79 cr
Concall highlights -
Company insists that there can be Qtr-Qtr lumpiness in its business performance due frequent changes in Customer’s order uptakes. Hence, its much better to judge company’s performance on a YoY basis
Aim to introduce 8-10 new API products over the next 3-4 yrs in the Oncology and Anti-Infective spaces
The injectable formulations facility is likely to start commercial production wef Q1 FY 25. Should start contributing meaningfully wef FY 26
9M revenues of the company are up 20 pc. Continue to aim to grow @ 25 pc CAGR for next 5 yrs ( this should mean higher growth in Q4 !!! )
Aim to maintain the API:Formulations sale split at 80:20 in near future
Initially - planning to launch 8-10 backward integrated Injectable formulations ( backward integration in these injectables should be a significant advantage )
02 of company’s API facilities are operating at capacity utilisations of 36 and 18 pc respectively ( indicating significant scope for positive operating leverage )
Majority of company’s exports are Air-Shipped. Hence the Red Sea issue is not such a big concern
Company has invested around 200 cr in their Injectables plant. Should be able to do 400-500 cr of sales from this facility in 4-5 yrs
Disc: initiated a tracking position, biased, not SEBI registered, inclined to add only on dips as valuations may be rich
2 Likes
JB Chemicals and Pharma -
Q4 and FY 24 results and concall highlights -
Q4 financial outcomes -
Revenues - 862 vs 762 cr ( up 13 pc )
Gross profit @ 561 cr, Gross margins up 130 bps to 65.2 pc
EBITDA - 198 vs 164 cr ( up 16 pc, margins @ 24.4 vs 23.8 pc )
PAT - 126 vs 88 cr ( up 43 pc )
Breakdown of revenues -
Domestic formulations - 465 cr, ( up 22 pc - including the acquired opthal portfolio. Organic India growth @ 13 pc )
International formulations - 267 cr, up 4 pc
( lower growth in international business as the company has made a strategic choice to De-Focus on their South African tender business )
CMO ( of Lozenges for global companies ) - 109 cr
( CMO business 100 cr / qtr milestone for the first time )
APIs - 21 cr
Domestic : International sales breakup for Q4 @ 54 : 46
FY 24 financial outcomes -
Revenues- 3484 vs 3149 cr
EBITDA- 897 vs 696 cr ( margins @ 27 vs 24.4 pc )
PAT- 553 vs 410 cr ( up 25 pc )
Gross Debt on 31 Mar @ 357 vs 548 cr
Cash and Cash equivalents @ 464 vs 282 cr
( basically, the company is now net cash positive by 107 cr )
Capex for FY 24 stood @ 135 cr, due expansion of lozenges facility at Daman
Company had acquired 15 Ophthalmology brands from Novartis for 964 cr in Dec 23
JB Chemicals is now ranked 22nd in IPM
Company’s major brands and their annual sales -
Cilacar franchise - 600 cr +
Metrogyl franchise - 300 cr +
Sporolac franchise - 120 cr +
Rantac franchise - 400 cr +
Nicardia franchise - 200 cr +
Azmarda - 70 cr +
MR productivity @ Rs 7 lakh / MR / month
Company is now ranked No 8 in the cardiac mkt and is the fastest growing company in this segment
Company is guiding for an EBITDA margin band of 26-28 pc for FY 25 ( vs earlier guidance of 25-27 pc band )
CMO business should grow at > 13-15 pc for FY 25. Have recently commercialised Immunity booster lozenges in FY 24. Should commercialise Melatonin based Lozenges in FY 25
Brand - Razel ( generic name - rosuvastatin, acquired from Glenmark Pharma in 2022 ) is also growing at 20 pc plus rates
Company believes that the Ophthalmic brands acquired from Novartis were previously under invested and under leveraged. Company has increased the MR count for the Opthal portfolio from 75 to 105
For India business, company is guiding for mid to high teen growth in FY 25 ( including the Opthal portfolio )
For international business ( minus CDMO, company is guiding for 9-10 pc growth )
Company is open to both in-licensing and acquisitions of brands to further improve growth rates ( since the company is again net cash positive )
New organic launches contributed to 3 pc of sales in FY 24. Same should continue in FY 25 as well
Expect the Opthal business to clock revenues of 180-200 cr for FY 25
Acute business in FY 24 was subdued. Expect this to mean revert in FY 25
Company doesn’t face any Chinese CMO competition for their Lozenges business - that’s an added advantage
Taking a lot of initiatives to improve the operating matrices of the Russia + CIS business. Hopeful of seeing tangible improvements going forward
Other expenses in Q4 were higher due increased logistics cost due Red Sea issues and the Novartis brands - integration related costs
Aim to take the CDMO business to 800 cr/yr kind of annual run rate in 3-5 yrs
Disc : looking to add on dips as current valuations may be on the higher side, not SEBI registered, biased, not a buy/sell recommendation
3 Likes
Alembic Pharma -
Q4 and FY 24 concall and results highlights -
Q4 outcomes -
Revenues - 1517 vs 1406 cr, up 8 pc
EBITDA - 260 vs 204 cr ( up 29 pc, margins @ 17 vs 14 pc )
PAT - 178 vs 153 cr, up 17 pc
FY 24 outcomes -
Revenues - 6229 vs 5653 cr
EBITDA - 932 vs 682 cr ( margins @ 15 vs 12 pc YoY )
PAT - 616 vs 342 cr
FY 24 Sales breakup -
India branded - 35 pc - 2200 cr ( includes the Veterinary business ) - grew by 7 pc in FY 24
US generics - 28 pc - 1730 cr - grew by 10 pc in FY 24
RoW formulations - 17 pc - 1052 cr - grew by 23 pc in FY 24
APIs - 20 pc - 1246 cr - grew by 7 pc in FY 24
India business -
Has grown at 11.4 pc CAGR for last 4 yrs
15 pc is under NLEM
Company’s 4 brands have sales > 100 cr
Total MRs @ 5000 +
16 pc of India sales come from Veterinary segment and 30 pc from acute therapies
Alembic is 18th largest Pharma company in India
Veterinary business ( operating in livestock and poultry segment ) has grown at a CAGR of 25 pc for last 4 yrs - now @ 355 cr / yr
US business -
7 products launched in FY 24 taking the total products launched to 147
25+ product launches planned in FY 25
No major Capex planned in next few yrs
Company’s base US business is about $ 200 million. Aiming to build up on this base
RoW business -
Has grown @ 21 pc CAGR for last 4 yrs
Company exports to - Europe, Canada, Australia,Brazil and South Africa
Currently ramping up operations in Chile, Middle East
APIs -
Supplying APIs to 60+ countries globally
( however, main focus is on regulated markets )
Has grown @ 15 pc CAGR for last 4 yrs
Future capacity expansion is on track
R&D expenses for FY 24 @ 480 cr @ 7.6 pc of sales
Current manufacturing base -
5 facilities - Formulations
2 facilities - APIs
Gross Debt now at 430 cr vs 620 cr on 31 Mar 23. Cash on books @ 120 cr
Company’s domestic business growth was mainly led by - gynae, veterinary, opthal, metabolic, GI, Cardio segments
Growth in anti-infectives, respiratory were tepid in the domestic mkts - pulling down overall domestic growth for the company
Expecting good ramp up and operational efficiencies to kick in for the US business in FY 25
Expecting strong growth momentum to continue for RoW business ( ie > 20 pc growth or thereabouts )
Confident of outgrowing the IPM for FY 25
Capex plan for FY 25 @ 300 cr or so - mainly towards de-bottlenecking and maintenance
As US business ramps up, company level EBITDA margins may to go 20 pc kind of levels due better utilisation of facilities ( provided there is no steep price erosions in US )
Disc : looking for dips in the stock price to start accumulating, biased, not SEBI registered, not a buy/sell recommendation
2 Likes