Ranvir's Portfolio

Q&A: Questions & Answers Portfolio Q&A
934

Glenmark Pharma -

H1 and Q2 FY 24 highlights -

Adjusted financials ( adjusted for Glenmark Life’s slump sale ) -

Consolidated Sales @ 3207 cr, up 6.3 pc ( growth drivers - Europe, RoW business which were up 58, 19 pc YoY )

EBITDA - 505 cr ( adjusted for a forex life of 43 cr ), Margins @ 16 pc

R&D expenses @ 305 cr ( almost 10 pc of sales - a very promising indicator, out of this - aprox 195 cr spent towards NCE discovery program at Ichnos ( GPL’s subsidiary )

Geography wise sales breakup -

India - 1121 vs 1091 cr, up 3 pc ( however, the consumer care business was up 15 pc. Slowdown in acute therapies and divestment of some brands to Eris Life affected overall growth. Scalp and Candid continue to do really well ). Glenmark Pharma has a strong Respiratory and Derma portfolios in India
( ranked no-2 in both ). Company ranks no-5 in Cardiac market. IPM overall rank @ 14. Company has 9 brands in top 300 brands.

North America - 740 vs 753 cr, down 2 pc ( sales expected to pick up in Q3 as some important launches like - gTaytulla are lined up ). Currently, the company has a product portfolio of 165 generics in US

Europe - 599 vs 378 cr, up 58 pc ( key brands like - RYALTRIS - nasal spray , Salmex - anti asthma inhaler - continue to do well )

RoW - 732 vs 615 cr, up 19 pc ( GPL - ranks no 8 in Derma, No-2 in expectorants (cough medicines ) in Russia. Launched RIYALTRIS in Malaysia, Saudi Arabia - receiving great response. Also witnesses strong growth in Brazil, Mexico

Brand RIYALTRIS -

Currently being marketed in over 70 countries. Enjoys double digit mkt share in a lot of countries like - Czech, Poland, Australia, RSA, Italy

Glenmark’s commercial parter for RIYALTRIS is US is Hikma ( British major ). Seeing strong demand in US

Brand has completed phase-3 trials in China. NDA application to be submitted by Dec 23

Other comments -

Intend to strike at least one out licensing deal wrt the Ichnos portfolio

Intend to further enhance cash generation to reach debt free status

Entered into an agreement with Nirma Pvt Ltd to sell 75 stake in GLS ( will continue to retain 7.5 pc stake ) for a total consideration of Rs 5600 cr. Company currently has a gross debt of around 4700 cr and a net debt of around 3300 cr

GLS sale likely to be reflected in the Q3 numbers

GPL expects operating leverage to kick in across LatAm and Europe by next FY leading to expansion in EBITDA margins. Also expecting reduced intensity of R&D going forward

India business expected to pick up from Q3 onwards. In Oct, India business grew 20 pc YoY

In Q3, three injectable products are lined up for launch in US. US business should pick up pace in Q3

Aim to hit and maintain EBITDA margins in the 18-19 pc range wef H2 FY 24

Continue to see price erosion in mid single digits in US business

Company is buoyant on the branded and OTC India business going forward. Company remains on a very strong footing in Respiratory, Derma and Cardiac space. Diabetic portfolio is also doing well. Should be able to grow the topline at 12-14 pc for next 3 odd years

Company’s Muroe facility in US should go live by next year. This should also aid margins going forward

Europe business’s margins have reached corporate avg with scope for further improvement. LatAm should reach there in next 1-2 yrs. RoW is already there

My Take ( biased ) - company can report a revenue of aprox 14000 cr and EBITDA of aprox 2500 cr next year. PAT may come in the range of 1300 - 1400 cr. That may lead to significant value unlocking for the company’s stock

Disc: holding, biased, may add more, not SEBI registered

1 Like
935

SUN PHARMA’s Speciality business -

Gross sales for Sun Pharma in FY 23 - 43,278 cr
Out of these - aprox 16 pc of sales ( to the tune of 7000 cr ) come from high margin, high entry barrier speciality products that are growing at > 20 pc CAGR. The same is likely to sustain in future as well

Going forward, this speciality drugs portfolio can grow to become really large with fat margins and high return ratios. Sun Pharma is not only investing heavily in R&D to churn out new Speciality drugs, they also have a big enough war chest for acquisitions and in-licensing

Lets go through some of these products that have been commercialised and the ones that are in pipeline -

Commercial products -

  1. Illumya - used against moderate-severe plaque psoriasis. Clinical trials are in Phase -3 for usage against Psoriatic Arthritis. Illumya is currently sold in US, Australia, Japan, Canada, Europe. Out licensed for China, North Africa Mkts

  2. Winlevi - topical treatment for acne vulgaris. Currently being sold in US, Canada

  3. Levulan - used to treat actinic keratoses of face/scalp and upper extremities

  4. Absorica - used to treat severe recalcitrant nodular acne. Current mkt - US

  5. Odomzo - used to treat locally advanced basal cell carcinoma ( a form of Skin Cancer ). Current Mkts - US, Canada, Germany, France, Denmark, Switzerland, Spain, Italy, Australia and Israel

  6. Cequa - used to treat dry eye syndrome. Current mkts - US, Canada. Out licensed for Chinese mkts

  7. BromSite - used to prevent ocular pain and post operation inflammation undergoing a Cataract Surgery. Current Mkt - US

  8. Xelpros - used for reduction of elevated intraocular pressure in patients with open angle glaucoma. Current Mkt - US

  9. Yonsa - used to treat patients with metastatic castration resistant prostate cancer. Current Mkt - US

  10. Sezaby - only product approved in US to treat seizures in Neonatal patients

Speciality / NCE pipeline -

CTP -543 - for Alopecia areata - completed phase - 3 trials

Illumya - for Psoriatic Arthritis - undergoing phase 3 trials

Nidlegy - for skin cancer - undergoing phase 3 trials

MM-II - to treat pain in Osteoarthritis - Completed phase 2 trials

SCD - 044 - for Atopic Dermatitis - undergoing phase -2 trials

GL0034 - injectable for type -2 diabetes - completed phase - I trials

Summary - Sun Pharma may well be on its way to becoming a speciality giant cum Innovator. It appears - it should only be a matter of time !!!

Disc - holding, biased, not SEBI registered

1 Like
936

ZYDUS LIFESCIENCES -

Q2, FY 24 updates -

Sales - 4368 cr, up 9 pc

Gross Margins @ 66 pc

EBITDA - 1146 cr, up 41 pc ( margins @ 26 pc vs 21 pc YoY )

NP - 800 cr, up 53 pc

R&D expenses - 322 cr @ 7.2 pc of revenue (healthy rate)

Capex for the Qtr at 216 cr

3 US FDA inspections happened in Q2 @ oral solid facilities I and III at Ahmedabad SEZ, Biologics fill-finish facility at Zydus Biotech park - all received EIR

Geography wise sales breakup -

India branded formulations - 32 pc - grew by 5 pc YoY despite delayed monsoons and hence the delay in acute season . Maintained leadership in Nephrology space. Grew strongly in Oncology space. Company’s biggest segments - Cardio, Respiratory, Anti-Infectives. Company has 08 brands among top 300 brands in India

India consumer wellness - 10 pc - grew by 3 pc YoY. Own some category leading brands - Everyouth, SugarFree, Glucon D, Nycil. Also own - Complain ( no 3 in its category )

US business - 44 pc. Grew 9 pc YoY. Filed 4 new ANDAs. Launched Indomethacin suppository in Q2 - granted 180 days exclusivity

EM + EU - 10 pc. Grew 17 pc YoY in Q2

APIs - 3 pc

Alliances - 1 pc

Other comments -

Company has already launched 13 Biosimilars in India

Acquired UK based LiqMeds group - for a total consideration of 690 cr. LiqMeds specialises in Oral Liquid dosage forms mostly targeted at geriatric and pediatric patients

LiqMeds has 05 - 505 b(2) approved products in US to be commercialised in future. Also has 16 approved products in UK - yet to launch most of them

Zydus has a 505 b(2) approval for Sitaglaptin. The company has exclusivity for the foreseeable future. However, since it’s not a substitutable product, it will take time for the company to ramp it up. Since it is not a generic approval, don’t see any pricing pressure

Speciality products in US / Europe - company focussing on rare/orphan disease and other unmet needs. Company already has approval for 01 product - NULIBERY - an injectable used to prevent mortality in a rare paediatric disorder. Another asset/product is awaiting approval. Aim to acquire at least 2 more products ( late stage / awaiting commercialisation ) going forward. Aim to scale this speciality business to $ 100 million kind of annual sales run rate in medium term (next 3 yrs). Also have 02 more products under own development

Revlimid sales shall accrue to the company only in Q1, Q4 every year till FY 26. Gross margins in Q2 were strong despite NIL sales from Revlimid

Company is building in one competitor for this FY and one more competitor by next FY for its product - ASOCOL in US

Very likely to clock double digit growth in US business in this FY

Company has 6500 MRs in India. Likely to add more in next FY

Lower RM costs have helped company’s Gross Margins

Launching 02 transdermal products in US in this FY. Likely to add 02 more in the next FY. Also expected to launch 01 exclusive product/yr for FY 25,26,27 subject to approvals, litigations etc

Disc: hold a small tracking position. Will add only if there are triggers like successful speciality / exclusive launches. Biased. Not SEBI registered

2 Likes
937

Aditya Vision -

H1 and Q2- FY 24 highlights -

H1 financials -

Sales - 954 vs 698 cr, up 37 pc
EBITDA - 86 vs 68 cr, up 27 pc
PBT - 62 vs 48 cr, up 29 pc
PAT - 47 vs 38 cr, up 24 pc

Same store growth @ 19 pc
Total billing - 4.1 vs 3.2 lakh
Avg selling price - Rs 22.5 vs 22.2 k

Store count on 30 Sep 23 vs 30 Sep 22 - @ 130 vs 88 , up 48 pc

Largest white goods retailer in Bihar, Jharkhand

Gross and PAT margins have moved up from 16 to 10 pc and 1 to 5 pc from FY 19 end to end of FY 23

State wise store count -

UP - 13
Bihar - 97
Jharkhand - 20

Zero store closure since inception

Own App - AdityaSeva for customer care solutions, AdityaSuraksha for extended warranty

Q1 and Q3 drive 30 and 28 pc of revenues. Q2 and Q4 are relatively slower @ 18 and 24 pc of revenues

Aiming to grow @ 20-25 pc CAGR for next 3-5 yrs

Aiming to expand to neighbouring Hindi heartland states

Electricity consumption in UP, Bihar, Jharkhand has gone up by 2X in last 8 yrs !!!

Entire festive season shifted to Q3 this yr vs its start in Q2 in last FY.Still, the company grew its topline from 260 to 313 cr

Conducted loan melas at 125+ locations across the 3 states which helped garner popularity for the Retail chain - Aditya Vision

Aim to open another 10-15 stores in H2 to take the total store count to 140-145 by end of Mar 24

At present, 30 of company stores are < 6 months old. As they ramp up / mature, there shall be a jump in profitability

Company intends to dominate UP mkt (in future) as it is dominating the Bihar mkt. This can be a huge development if it materialises

Q3 is likely to be robust. Oct demand has been very good. Nov is likely to be even better

Marquee investors like HDFC AMC have entered the company’s shareholders list. Some other Mrs have also entered

Benaras, Prayagraj stores doing very well right from inception

Company likely to stick to Hindi heartland due - under-penetration and blue sky kind of growth potential that’s avlb there

Blended borrowing cost for the company at around 8.5 pc

Company is likely to list on NSE in next

No plans to get into a private label selling / building own brand name

Disc: invested, may add on dips, biased, not SEBI registered

3 Likes
938

Time Technoplast -

H1 andQ2 updates -

A leading manufacturer of Polymer and Composite materials based storage and other products ( like HDPE pipes, auto components etc )

Strong presence in Asia, MENA regions

Marquee clients include - DuPont, IOL, Gulf Oil, ExxonMobil, Bayer, BASF, Huntsman, GE, L&T etc

Product basket includes -

Polymer based - drums and containers, Jerry cans, Energy storage devices, auto components

HDPE pipes

Composite material based - IBCs (intermediate bilk containers), Composite cylinders, MoX films

H1 financial performance -

Sales- 2274 cr, up 16 pc. Volume growth @ 18 pc
EBITDA- 315 cr, up 22 pc (margins @ 13.9 vs 13.1 pc)
PAT- 126 cr, up 34 pc
Cash Profit - 219, up 23 pc

Share of value added products has gone up from 23 pc (last yr) to 25 pc this yr

Sales for IBCs and composite cylinders grew by 110 pc in H1 vs LY

Segmental performance -

Polymer product sales - 1481 vs 1306 cr, up 13 pc
Composite products sale - 792 vs 661 cr, up 20 pc

H1 capex @ 100 cr. out of this, 40 cr spent towards legacy products. Additional 60 cr spent towards IBCs and Composite cylinders

Other comments -

Demand for HDPE pipes being mainly led by Govt schemes like Har Ghar Jal, Swachh Bharat, Infra spending

Demand for IBCs led by private capex - both brownfield and greenfield. Exports to emerging economies are also doing well

Composite cylinders (LPG) demand being fuelled by PM Ujjwala, orders from IOCL etc

Company receiving overwhelming demand for CNG composite cylinders. These can also be used to store liquid Hydrogen. Fresh Capex initiated for CNG composite cylinders

Composite CNG/LPG cylinders can be a 2000-2500 cr business in 3 yrs time !!! Company commands a mkt share of 75 odd pc in India

IBC business should grow at rates > 15 pc for next couple of years

Aim to reduce Debt by 150 cr via internal accruals (not factoring in the sale of International assets ). Company likely to sell its non core overseas assets this FY. Money received shall be used to further reduce debt and other business purposes. Expected to receive around 1000 cr from the same

Share of value added products to cross 35 pc in next 3 yrs. Once this happens, EBITDA margins should cross 15 pc

Total business likely to cross Rs 5000 cr this FY as second half is always stronger

Disc: holding, Biased, not SEBI registered

3 Likes
939

GARWARE HITECH FILMS -

Q2 and H1 FY 24 highlights -

Financial outcomes in Q2-

Revenues - 397 vs 395 cr
EBITDA - 65 vs 67 cr ( margins @ 16 vs 17 pc )
PAT - 46 vs 48 cr

SunControl, PaintProtection businesses - did well. Industrial products division witnessed some decline

Value Added sales @ 90 pc of total sales - very positive for long term. Commodity products sales now @ 10 of the total

Consumer Products division - ( includes sun control, paint protection films ) grew by 53 pc !!!

Industrial products division reported a decline of 32 pc in revenues

Paint protection film revenues doubled in Q2 vs Q1 FY 24 !!! This happened due robust demand from US and Indian distributors

Company has tied up with over 500 OEM car retailers for installation of PP films. Aim to tie up with over 900 dealers by next yr

Sun Control films grew by 8 pc vs Q1 FY 24

Expanding into architectural and decorative sun control films - should have a bright future going forward

Industrial Products business (IPD) de-grew sharply in Q2 due strategic focus on Consumer products division (CPD) and headwinds in IPD business. Seeing some recovery in IPD business in Q3

Company’s Gross Debt at - NIL
Cash Balance @ 350 - indicating strong financial position

Company has ramped up its marketing expenses wrt to both SCF and PPF business. This capped the EBITDA margin expansion in Q2. CPD is an invest to grow business with higher margins. That’s why the higher initial spends

Currently, the company is receiving overwhelming response in the CPD division

For SCF,PPF, Shrink films etc - company is the only fully backward integrated player in the world

Have spent additional 8 cr towards pushing the CPD in Q2. Likely to continue this kind of spending in Q3, Q4 and then revise it in FY 25

IPD business demand from North America was subdued in Q2 which led to business decline and a hit on margins. Hence, despite clocking much higher CPD sales, overall margins remained at similar levels as LY

Expecting North American IPD business to see some recovery in Q3

Have got commercial approvals from M&M for PPF coatings on XUV-700. Expecting approval from another 3-4 OEMs going forward. This should lead to more than decent volume uptick in domestic PPF volumes

Company still maintains a sales guidance of Rs 2500 cr for FY 26 - company is confident of achieving the same !!!

For FY 25, Architectural and Paint protection films should be the primary growth drivers

The new SCF lines are fungible and can be used to produce PPF products as well. Can be used in accordance with demand from these two segments. De-Bottlenecking can be resorted to further expand capacities

Company sees structural improvement in Gross Margins 18-20 months down the line

PPF sales in Q2 @ 120 cr ie 30 pc of topline. This percentage should further improve going forward

Sales from SCF @ 36 pc of topline in Q2. Business momentum in SCFs is also strong

In 2-3 yrs, expect 80 pc of business to come from SCF + PPF ( 40 pc each ). Expect remaining 20 pc of business to come from IPD

PPF penetration in Indian Auto Mkt is about 0.5 pc of total Cars. In China, US the penetration is > 10 pc. Company aims to take Indian penetration to around 2 odd pc of the cars

Disc: holding, biased, may add more if performance improves, not SEBI registered

5 Likes
940

GSK PHARMA - Broad overview -

No 1 in India in - vaccines, anti-infectives derma therapies

Has 4 brands in top 50 branded generics in India. These are - Calpol (PCM), Augumentin (amoxycillin), T-Bact ( topical cream for bacterial skin infections ) and Ceftum ( Cefuroxime - a second Gen Cephalosporin ). Company launched brand extensions of two of these brands - Calpol 650+ and Augmentin ES in 2023. Eltroxin( for hyperthyroidism ), CCM ( Vit D supplement ), Neosporin ( topical cream for bacterial skin infections ), Betnovate ( anti-inflammatory skin cream ) are other popular brands from GSK

05 of GSK’s vaccines are ranked among top 15 vaccines brands in India. Have launched an adult vaccine in India to prevent - Shingles - in FY 23

In 2024, GSK will complete 100 yrs in India

Company also owns 02 popular speciality brands in India - Nucala ( only biologic treatment for eosinophilic asthma ) and Trelegy ( to treat obstructive pulmonary disease )

FY 23 financials -

Sales - 3216 vs 3218 cr

EBITDA - 800 vs 755 cr (margins @ 25 vs 23 pc)

PAT - 605 vs 552 cr

Current Size of IPM @ $52 billion. Expected to cross $ 100 billion by 2030

Company’s formulations facility is located at Maharashtra. Company has 22 Contract manufacturing partners in India

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

941

ABBOTT INDIA - COMPANY OVERVIEW -

Key brands -

Udiliv ( chronic lever disease )

Influvac ( prevention of Influenza )

Pankreoflat ( indigestion )

Cremaffin ( constipation )

Arachitol ( Vit D deficiency )

Zolfresh ( Insomania )

Heptral ( liver disease )

Duphaston ( miscarriage, IVF )

Digene ( antacid )

Prothiaden ( depression )

Librax ( irritable bowel syndrome )

Brufen ( analgesic )

Duphalac ( constipation )

Thyronorm ( hypothyroidism )

Duvadilan ( pre-term labour )

Vertin ( vertigo )

New brand Launches -

Cremagel ( anal fissures )

Brufen P ( pain and fever )

Solfe ( anemia )

Total product portfolio of 125 products. 10 new products launched in FY 22-23

15 of company’s brands are ranked-1 in their respective categories and account for 80 pc of company’s revenues

Last 5 Yr CAGR -

Revenue - 9 pc

EBITDA - 16 pc

PAT - 17 pc

Book Value growth - 15 pc

Expanding aggressively into - Nepal, Bhutan, SriLanka and Maldives

Udiliv and Thyronorm are a part of top 15 India Pharma brands

With a strong portfolio of - Cremaffin, Duphalac, Cremaffin Plus - company commands a 38 pc mkt share in Laxative category

Therapy wise performance for FY 23 -

Women’s health -

Degrew by 8 pc due increased generic competition in Dydrogestrone mkt (company’s brand is Duphaston). This has been a pain point for the company for quite some time now. Launched a slew of new products to augment the women’s health portfolio - Femoston (post-menopausal symptoms), Solfe (anaemia) and Cetropro (IVF)

GI -

Grew @ healthy 11 pc. Cremaffin, Duphalac, Udiliv and Creon (pancreatic exocrine insufficiency) did very well. Librax and Ganaton (GI dismotility) continued their steady growth rates. New launches in the GI space included - Digeraft (gastroesophaegal reflux) and Cremagel

CNS -

Grew by 4 pc led by Vertin (to treat vertigo)

Metabolics -

Grew by a strong 15 pc led by Thyronorm. Also launched India’s first Liothyronine molecule - Linorma T-3 in FY 23. Combirorm (probiotics capsules) continues to gather momentum for treatment of bacterial vagenosis

Multi-Speciality -

Grew by 5 pc led by - Duvadilan, Zolfresh, Brufen. Aim to grow these into mega brands for the company. Brufen-P was launched this yr

Vaccines -

Grew by 6 pc led by - Influvac, Rotassure, Enteroshield (typhoid) and Havshield (Hepatitis A)

Future growth drivers -

Accelerate pillar brands
Multi-Channel doctor engagement
New launches to improve portfolio depth

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

6 Likes
942

I hold Abbott India. My concern is, its sales been not upto the mark and most important is its Key people are getting replaced very frequently. CFO, Company secretary or currently its 2 CEO changed within i think 2 years…I am losing the conviction to hold it. I bought it 2 years back with intention that its a sort of Pharma FMCG type company with Consistent compounder.

943

ORCHID PHARMA -

Company overview and Q2 FY 24 updates -

Company manufactures widest range of Oral and Sterile Cephalosporins APIs with a product portfolio of > 35 products spread across 6 generations of Cephalosporins

Company is the inventor of Enmetazobactum - likely to start sales in China, US, Europe in FY 25. This molecule is out licensed to Allecra Therapeutics and Orchid is entitled to receive royalties on its sale

Orchid Pharma was acquired by Dhanuka group in FY 22

Cephalosporins form about 30 pc of anti-biotic mkts. Other families of antibiotics include - Penicillin, Macrolides, Carbapenems, Fluoroquinolones

Manufacturing blocks -

Sterile APIs - 6 Blocks ( 05 crystalline and 01 Lyophilised blocks )
Oral APIs - 07 blocks
Intermediates - 05 blocks

Have approvals from - USFDA, PMDA, EUGMP

Company exports directly/indirectly to over 60 countries

Company’s strengths -

Complex chemistry of Cephalosporins
Sterile manufacturing requirements
Cross - Contamination is a big problem and acts as a natural entry barrier
High upfront capex
Low cost of operations

Company’s long term debt has come down from 427 cr to Nil post the takeover in 2021

Q2 highlights -

Sales - 199 vs 165 cr
EBITDA - 31 vs 20 cr
PAT - 20 vs (-) 5 cr

Company working very hard on cost optimisations and reducing wasteful expenses to engineer a turnaround

Company is setting up a plant for manufacturing of an important KSM -
7-ACA used for synthesis of most Cephalosporins. Earlier, it was being imported from China. Company shall receive PLI benefits for manufacturing this product

Also setting up a front end for sale of formulations directly to hospital chains, large standalone hospitals. To launch this business in Q1 - FY 25

Orchid has been selected (a big deal) as the contract manufacturer of a patented molecule - Cefiderocol, patented by Shionogi - Japan - for its sale into LMIC countries (135 of them ). Technology for this product shall be directly transferred by Shionogi to Orchid

It’s a completely new antibiotic - works well against resistant bacterial infections. Likely to save many lives

Cefiderocol - FDF plant would require an investment of Rs 80 odd cr. Expected launch in second half of FY 26

For next 3 yrs, expect revenue growth in the range of 20-25 pc CAGR !!!

Regulated vs Emerging mkt sales breakup for Orchid Pharma @ 40:60. Likely to continue in future too

Oral:Sterile revenue split @ 66:34

Revenue from US currently is negligible. Aim to scale it up meaningfully in the future

Company’s capex to set up a new Sterile manufacturing block is now complete. Not yet inspected by regulated market regulators

Orchid lost a number of customers in US, EU (pre-acquisition). In the process of winning back some of them

At present, top 3 products contribute to about 75 pc of company’s sales

H2 is generally better for the company vs H1

Disc: new entry, biased, not SEBI registered

4 Likes
944

@ranvir What will be the impact of RBI’s yesterday’s AIF decision on IIFL’s business?

945

I would say, I am ready to be patient for another 1-2 Qtrs wrt ABBOTT INDIA

With falling / low RM prices, I don’t think they can go horribly wrong

Just a personal opinion

946

Hi… @Rj_Arora -

Don’t know about the intricacies - to be very frank

However, IIFL’s lending book is largely retail and small business loans. Hence - this order should be irrelevant as far as IIFL is concerned

First thing - that came to my mind :point_up:

4 Likes
947

RACL Geartech -

Q2 FY 24 highlights -

Sales @ 103 vs 90 cr
EBITDA @ 25 vs 23 cr ( up 9 pc, Margins at healthy 23 pc )
PAT @ 10 vs 10 cr

Product range -

Transmission gears and Shafts, Sub assemblies
Precision Machined parts
Chasis parts
Industrial gears

Product applications -

2, 3 Wheelers, TVs, CVs, Agri eqpt and industrial gears

Manufacturing facilities - 02
Warehouses - 03 in Europe

Comments from Concall -

Expanding Noida facility with additional leasehold area of 26k sq ft. Commercial production to start from Q1, FY 24. Samples shall be produced in Q4 this yr

Nominated for supply for gearboxes and shafts for a German electric- bicycle player. To be made at the new expanded facility. These are premium bikes costing around 5-7k Euros. These kind of bikes are gaining huge popularity in Europe. The German customer has a patent protected technology for this bike.

Nominated for supply of wheel axle for KTM Austria for their 1300 cc super bike

Another customer of the company - MAN Trucks had some of its projects delayed in the current FY. Company supplies transmission gears and axle shafts to them. By Q4, supplies to MAN trucks should begin. Supplies to MAN should be a big growth driver in FY 25

For FY 24, growth guidance has been moderated to 15-20 pc from earlier guidance of 25 pc. Should go back to 25 pc kind of growth rates wef FY 25. Reason for the same is because the company could not get its hands on gear-grinding machinery ( very high end machinery ) due various supply bottlenecks and shortages in Europe and Japan from where they r imported. Most of the issues now stand resolved

In FY 24 - company is expected to spend 80 cr on Capex. FY 25’s capex plan has not yet been finalised

The newer orders that company is getting have greater degree of value add. Hence there is an upward bias in gross margins

Company’s supplies to BMW’s R-1200
( upgraded now to R-1250 Bikes ) is a high margin, high value addition business. Its likely to continue that way till 2033 !!!

KTM has expanded into China and is doing good business there as well. RACL remains their supplier even for the bikes to be sold in China. This should help RACL grow with KTM

Still aim to hit the Rs 500 cr topline by FY 25 end while maintaining the same margins

The China + 1 sentiment and the high inflation and energy prices in Europe have been a tailwind for the company and other Indian manufacturing companies too

Disc: holding, biased, not SEBI registered

2 Likes
948

Some interesting opportunities in an otherwise ’ not so cheap ’ market -

Bajaj Auto - Pulsars, 3-Wheelers, Chetak ( EV ), KTMs, Triumph JV - all doing well. Exports are holding steady. Company is likely to come out with revolutionary - CNG motorcycles in CY 25
Have cash on books > 26000 cr !!!
Have announced a stock buyback for an amount of Rs 4000 cr @ stock price of upto Rs 10,000 / share

ABSL AMC, UTI AMC - both are non capital intensive, cash rich businesses. With monthly SIPs showing no signs of a slowdown … these stocks can easily get re-rated upwards

Supriya Lifesciences - Have done well in H1, FY 24. Company is extremely positive wrt its sales outlook in Latin America as these countries are openly preferring India for incremental supplies of APIs over China. Likely to do a sales of around Rs 550 cr this yr. Confident of doubling their sales inside next 4 yrs

Disc - holding all, biased, not SEBI registered

6 Likes
949

Hello Ranvir sir. I have been following your thread for a long time now and deeply appreciate your insights. Thank you so much for sharing consistently!

I am curious you did not include Ami Organics in the above list of undervalue buys. My conviction went up more after seeing you commentary post Q3 concall and was hoping Ami Organics will make the cut in your above list. I look forward to understanding your thought process on this.

950

Hi…

Thanks for ur kind words

It’s just that I was reading about these 4 companies over last 2-3 days. Hence the post

I continue to like AMI Organics and I am holding it. Hoping for the triggers like the execution of Fermion contract etc to start playing out - sooner rather than later

Cheers !!!

3 Likes
951

UTI AMC Q2 FY 24 concall updates -

Company inaugurated 29 new UTI offices across the country on 29 Sep taking the total tally to 195 offices

Company focussed on driving its presence in B-30 cities ( ie tier -2,3 cities ). 135 of company’s branches / offices are in B-30 cities

Launched their mobile app in Q2 for their customers and distributors with state of the art technology

Total AUMs at 16.9 lakh cr, up 17 pc yoy

Domestic MF AUMs at 2.67 lakh cr, up 14 pc yoy. UTI’s mkt share in MF industry at 7.8 pc at the end of Q2

Equity AUM at 78k cr, up 9 pc

ETFs AUM at 98k cr, up 35 pc !!!

Total live MF folios at 1.22 cr

Avg SIP/month at aprox Rs 540 cr with avg SIP size of Rs 3150 / month

23 pc of UTI MFs AUM are contributed by B-30 cities vs the industry avg from B-30 cities at 17 pc

Launched 04 new NFOs in H1

Consol revenues @ 404 vs 435 cr

PAT @ 220 vs 262 cr

Company has got the permission from SEBI to start their US operations

Company was following the growth strategy in equity MFs whereas the Mkt has been rewarding the value strategy offlate. Hence there has been pressure on equity MF mkt share. Company is making course corrections ( a key matrix to track )

Company holding an investment book of around Rs 3900 cr

Company has increased its mkt share in the Hybrid schemes

Likely to lunch 3 more ETFs in H2, FY 24. Not launching any active equity schemes as of now

Effective tax rate for full FY to be around 21-22 pc

Disc: hold a small tracking position

952

Hi Ranvir, Curious why you call Bajaj Auto as cheap when its trading close to the highest EV/EBIDTA valuation since 2009! I feel Maruti in the 4 wheeler space seems to be a better pick in auto at current valuations…

1 Like
953

I understand ur thoughts … I think so :grimacing:… That’s because I like Maruti Suzuki too

Hold a small tracking position there as well

The Hybrid technology’s success demonstrated by Maruti with Grand Vitaraa is encouraging. Plus, they ll be out with a full fledged EV by next yr

But … Can’t be bearish on Bajaj Auto too. Chetak is a really good product. Their JV with Triumph should do really well. Should be a a really good competitor for RE. KTM, Husqvarna - where Bajaj is the majority shareholder is doing well across Europe. There r reasons to be upbeat on Bajaj Auto as well

2 Likes