Ranvir's Portfolio

[ranvir]

ORCHID PHARMA -

Q3, FY 24 highlights -

Revenues- 221 vs 160 cr ( growth driven by - geographical and customer expansion )
EBITDA- 35 vs 14 cr ( margins @ 16 vs 9 pc )
PAT- 29 vs 8 cr

Enmetazobactum has received EU’s approval for a commercial launch. Expecting an approval from US’s regulators in Feb 24

Company commissioned its sterile Cephalosporin blocks in Q3 ( Nov 23 ). Expect to reach 50 pc capacity utilisation in Q4 and 100 pc in next 6-9 months

Don’t expect any major Capex requirements in next 2-3 yrs. Despite that, company should be able to grow its base business by 20-25 pc CAGR via de-bottlenecking of capacities

Like - Cefiderocol, company is exploring partnerships for some other products as well

Dhanuka labs has done a revenue of 400 cr in 9M FY 24. Dhanuka labs - Orchid Pharma merger is about to be consummated

The 7 ACA - KSM manufacturing plant that the company is setting up at Jammu is eligible for a lot of benefits like - PLI, Electricity and Interest rate subventions, GST benefits. Company should be able to make 10 pc EBITDA plus these benefits should add to their margins

Going to launch 02 more products - both Cephalosporins. DMF for one of them has already been filed. DMF for the second one shall be filed by end of this calendar year

Enmetazobactum ( if granted waivers by Indian regulators for clinical trials ) should get an India approval within 6 months. Otherwise, by Q1 FY 26. Company estimates to do a sales of 200 odd cr of this product in India ( 4 pc kind of share of total anti-microbial injectable mkt )

A 20 pc kind of revenue CAGR is doable for next couple of years

Expect Enmetazobactum launch in EU, US in q1 FY 25. Initial growth post launch should be strong

The sales royalty on the sale of Enmetazobactum remains @ 6-8 pc of sales for EU, China, US mkts

Domestic:Export revenues break up @ 18:82 pc ( roughly )

Orchid Pharma is allowed to make 25 kind of PBT margins ( by the innovator - Shionogi - Japan ) on the sales of Cefiderocol in the LMIC Mkts

Disc : holding from lower levels, biased, not SEBI registered

[ranvir]

ALKEM LABS -

Q3 FY 24 concall highlights -

Revenues - 3323 vs 3040 cr, up 9 pc
Gross margins @ 61 vs 59 pc YoY
EBITDA - 707 vs 599 cr, up 18 pc ( margins improved 160 bps to 21.3 pc )
PAT - 604 vs 460 cr, up 30 pc

R&D expenses @ 111 cr, 3.3 pc of sales ( on the lower side - imho )

India sales @ 2232 cr, up 12 pc
International sales @ 1024 cr, up 3 pc

Domestic business grew strongly led by GI, Anti-Diabetic, Vit-Minerals segments. Trade generics also grew strongly

Company’s rank in various therapeutic areas-

Anti-Infectives - 1st
Vit-Minerals - 2nd
GI - 3rd
Pain/Analgesics - 3rd

Company is an emerging player in Diabetic, Neuro, Derma, Cardiac segments

US sales @ 683 vs 761 cr, down 10 pc due very strong base in the previous FY. 9M US sales are up 12 pc

Non-US international ( Australia, EU, LATAM ) sales @ 340 vs 230 cr, up 47 pc !!!

Company has launched 7 biologics in the domestic market via its subsidiary - Enzene ( doing sales of around 200 cr/yr )

Company holding a cash surplus of around 3500 cr

Chronic sales as a percentage of India sales @ 17 pc ( still quite low for the company ). Should be able to take it to above 20 pc in 3 yrs or so

LATAM growth continues to be strong - plus its a healthy EBITDA margin business

Guiding for a full year EBITDA margins of around 17 pc as Q4 is a weak Qtr for Alkem Labs

Looking at deploying cash on balance sheet for growth - ie - acquisitions, organic projects

Anti-Diabetic, Respiratory are strong focus areas for the company in IPM

Enzene ( Biosimilars - subsidiary ) likely to break even this FY

As the Chronic sales in India, RoW sales pick up - margins should improve ( beyond the current annual run rate of 17 odd pc at EBITDA level )

Going fwd - Intend to spend 100-150 cr / yr on R&D related to Biosimilars

Acute portfolio on an avg has 10-15 pc lower Gross Margins vs the Chronic portfolio

Remain bullish on RoW mkts. Should continue to grow well in LATAM, EU

Aim to keep increasing EBITDA margins by 100 bps / yr for the foreseable future

Expecting tax rates of 10-12 pc for next 2-3 yrs for the company. Tax rates will go into the 20s range post FY 27

Around 30 pc of company’s portfolio falls under NLEM

Expecting Q4 EBITDA margins @ 12 pc or better

US business’s economics is now far better vs previous 2-3 yrs

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

[ranvir]

Usha Martin -

Q3 FY 24 concall highlights -

Revenues - 797 vs 834 cr
EBITDA - 157 vs 127 cr ( margins @ 20 vs 15 pc )
PAT - 108 vs 84 cr ( margins @ 13 vs 10 pc )

Segmental revenues -

Wire Ropes - 561 vs 562 cr ( despite YoY reduction in volumes and RM prices. Enhanced realisations and value added products supported the revenues )

Wire and Strand - 74 vs 83 cr
LRPC - 92 vs 118 cr

Geography wise revenue break up -

India - 45 pc
EU - 24 pc
Asia Pacific - 15 pc
Middle East - 10 pc
Americas - 6 pc

EBITDA/Ton for the company @ Rs 34018 vs Rs 25526 YoY

Net Debt @ 110 vs 191 cr YoY

Wave 1 Capex - poised for commissioning is a testament to company’s commitment to expand in high end value added products across their business verticals

Contribution from high margin Wire Ropes segment up at 70 pc vs 67 pc LY

Have set up another subsidiary in Saudi Arabia to take advantage of high growth Saudi Mkt. Operations to start in Q1 FY 25. This should eventually be a large and fast growing market

Have acquired remaining 50 pc in their JV company in Thailand from the Japanese partner

Planing to enter Synthetic slings Mkt through their UK subsidiary

The ongoing capex ( Wave 1 ) should be complete by q4. Sales from this capex may start flowing in from Q1 next FY. Full ramp up may take some more time

Have supplied to a number of premium customers in US, EU over last 1-2 yrs. Expecting order flows from them to flow through for the company as we go forward

Company intends to get into value added LRPC segment like - plasticised / galvanised / PVC coated LRPC etc as the plain vanilla LRPC is a commodity / low margin kind of business

Expect descent volume growth in the high margin Wire Rope segment in next FY as the new Capex goes on-stream

Aim to maintain the high margins seen in Q3 in the next FY as well. This should be possible as the share of value added sales is steadily improving

Company’s subsidiary in the Gulf is the only meaningful company in the wire rope segment in that geography. Plus the Govt’s there are encouraging local companies. However, expect competition from Japan, Europe, Korea etc to join in the party as the business picks up

Red Sea issue is a short term headwind for the company. This may also lead to increased travel time for export deliveries and hence higher working capital requirements

Company’s foray into Synthetic Slings is an exiting, high end, high value added area. May bear descent returns in 2-3 yrs time

Wave - 2 capex completion should take another 18 months from now. Capacity addition should be around 50k Tons ( wave - 1 and 2 combined ). Current capacity is around 200k tons. So the total capacity would expand by 25 odd pc for the wire ropes segment

India growth continues to be strong. Company has aprox 60 pc Mkt share in India. Govt’s focus on setting up new Wire-Rope connected destinations should act as a further tailwind

Disc: holding, added more recently, biased, not SEBI registered, not an investment advice

[ranvir]

LANDMARK CARS -

Q3 FY 24 highlights -

Brand wise dealerships -

Mercedes - 23
Honda - 21
Jeep - 19
VW - 25
Renault - 15
BYD - 7
MG - 10
Mahindra - 3
Ashok Leyland - 4

10 outlets out of the a/m outlets are slated to open in Q4 + Q1 ( FY 25 )

Out of these, only 02 outlets are owned. Rest are on lease. 25 pc of all outlets have been acquired

Avg selling price for Q3 FY 24 @ 19.33 lakh / car

Q3 financial outcomes -

Sales - 959 vs 876 cr
EBITDA - 65 vs 65 cr ( margins 8 vs 7 pc )
PAT - 18 vs 26 cr ( due increased depreciation costs )

After sales service is a high margin segment for the company. Have been growing @ 20 pc CAGR for last 9 yrs with 40 pc GMs, 18 pc EBITDA margins

Company started selling used cars about a year back. Sold cars worth 75 cr in 9M FY 24 ( a total of 641 cars ). Avg selling price / car @ 11.63 lakh

Segment wise revenues -

New car sales - 732 vs 684 cr ( could ve been higher if there were no supply issues at Mercedes Ltd. Mercedes growth should pick up in next FY )
EBITDA - 21 vs 27 cr

After sales service - 227 vs 191 cr
EBITDA - 43 vs 37 cr

Avg value / per servicing @ 25k vs 22.6k YoY

BYD - Seal, a popular model is about to be launched

Company has front loaded salary and depreciation expenses in Q3. Should bear fruits going fwd

Mercedes to launch 12 new models in India in FY 25. Should help their sales

BYD has applied for homologation so that the cap on total sales of 2400 cars / yr on CKD kits. Once approved, this cap of 2400 cars / yr goes away ( however the import duties remain )

In order to reduce their cost of operations, company is allocating half of current Jeep Showroom space to brands like Renault so that they are able to extract more sales volumes per sq ft

As MG and Mahindra numbers ramp up, sales volumes should rise rapidly and company should be able to better absorb increased employee expenses, depreciation

In Q3, luxury cars mkt grew by 20 pc but Mercedes could only grow by 9 pc due to severe supply shortages. This should get corrected in FY 25. The OEM is hard at work

Renualt India is committed to help out Landmark Ltd ( as in compensate the losses ) till they launch new models in calendar year 2025

Company planing to open outlets to sell car care products as well - wef FY 25. This again can be a descent business opportunity

Order book for Mercedes is really strong. Its just a matter of car availability for sales to materialise

Company sold 5400 new cars in Q3

Disc: holding, added recently- post Q3, biased, not SEBI registered, not an investment advice

[ranvir]

Glenmark Pharma - Exiting management commentary -

Q3 FY 24 highlights -

Sales - 2507 vs 3100 cr
EBITDA - (-) 209 vs 474 cr
PAT - (-) 331 vs 291 cr

Consolidated revenues fell 19 pc due to one time impact on India business

India revenues fell 75 pc @ 262 cr !!! Adjusted for that, revenues would have grown 9 pc YoY

EU business grew 29 pc @ 635 cr. Key brands like Riyaltris and Asthmex continue to grow strongly

RoW business grew 10 pc @ 725 cr. Company continues to witness strong sales momentum in the Respiratory and Derma segments

North America business de-grew 9 pc @ 762 cr ( due lack of new launches. Have launched 07 new products ) Over last few Qtrs, company has launched 05 new Injectable products in the US Mkts. Company hopes that these products may start to gain descent traction wef Q4 FY 24. Also awaiting approvals for 02 generic nasal sprays in the respiratory segment ( both these are big launches )

API business grew 10 pc @ 412 cr

India business impacted due - extensive changes in company’s distribution model through consolidation of stock points

India consumer division with brands like - Candid, La Shield, Scalp - grew 20 pc

Riyaltris - already launched in 31 countries. Has been approved for 18 more markets and will be launched there in next 3-6 months. China launch is expected in Mid-2025

Glenmark Pharma is ranked 2nd in both Derma and Respiratory segments in Indian Mkt. Company ranks 5th in the Cardiac segment. Company has 9 brands in top 300 brands in India

Glenmark is the first company to launch the bio-similar Liraglutide in India in Jan 24

R&D spends for Q3 @ 308 cr which is > 10 pc of sales

Gross and Net Debt @ end Q3 stands at 4900 and 3500 cr respectively. Likely to be paid off once the company receives the proceeds from the stake sale in GLS

India business restructuring done to correct the inefficiencies in the product distribution, help reduce working capital. In Q4, company should be back to > 1000 cr/Qtr India business. Post restructuring, company’s working capital need should reduce by Rs 500 cr

India business should be able to sustain 10-12 pc growth CAGR from hereon

R&D costs should almost half going into 2025. All this additional savings ( about 250 - 300 cr / yr ) should flow through to the bottomline )

Company’s Monroe plant in US is ready for inspection post all the remediation work. Expect to commercialise 02 products in FY 25 from this facility. From FY 26 onwards, expect this number to scale up meaningfully. As the plant goes commercial, expect a lot of operating leverage for the company’s US business to flow in

Going fwd, company is going to lay greater focus on the Injectables and Respiratory business in the US. Derma business should continue its steady trajectory

Riyaltris is expected to clock sales of $ 80 million for GPL. Once it is launched in the remaining mkts, the peak Riyaltris sales should further ramp up meaningfully. Plus this is a high margin product

The Chinese drug ( Envafolimab - an immuno-onco product ) that company has in-licensed can potentially be a big molecule going forward. Company believes, it would be the next Riyaltris for them

India business should clock > 1100 cr / yr sales from FY 25 onwards

Company expects to be debt free by end of Mar 24. Guiding for > 18 pc kind of EBITDA margins for FY 25

Assuming a topline of 12k cr, EBITDA for next year may be around 2200 cr with little or no interest outgo !!!

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

[ranvir]

Eris Lifesciences -

Q3 FY 24 concall highlights -

Current rank in IPM @ 21st vs 29th in Mar 18

Make share in Diabetes @ 5 pc, in Vit/Minerals @ 2.5 pc

Last 6 yrs avg GMs > 80 pc, EBITDA margins > 35 pc

Therapy wise sales breakdown -

Diabetes - 28 pc

Cardio - 19 pc

Vit/Min - 16 pc

Derma - 14 pc

CNS - 6 pc

Women’s health -5 pc

Nephro - 3 pc

Others - 8 pc

Q3 financial outcomes -

Sales - 486 vs 423 cr

EBITDA - 176 vs 137 cr ( margins @ 36 vs 32 pc )

PAT - 116 vs 107 cr ( due higher amortisation, interest costs )

Vision 2029 - to hit a annual revenue run rate of Rs 5000 cr / yr

Acquired SWISS PARENTERALS in Q3. Its a dossier driven - generic and speciality Injectables business focussed on RoW Mkts ( Africa, LATAM, ME, Asia Pacific ). They own 02 manufacturing plants in Gujarat. Swiss Parenterals currently does a topline of 250 cr with 25 pc PAT margins. Eris has bought 51 pc stake for 637 cr in the company. An additional 19 pc stake shall be acquired separately by Eris promoter group for 237 cr

It also offers Eris an ideal platform to launch India focussed Sterile - Injectables portfolio

Company’s 100 cr/yr brands -

GlimiSave ( anti-diabetic ) - 300 cr

Eritel ( Telmisartan - anti-hypertensive ) - 170 cr

ReNerve ( Gabapentin + Methylcobalamin - CNS drug ) - 160 cr

Zomelis ( anti-diabetic ) - 105 cr

Company’s 50 cr/yr brands -

Tayo ( Calcium + Vit D supplement ) - 80 cr

Gluxit ( anti- diabetic ) - 75 cr

Remylin ( folic acid supplement ) - 70 cr

Company plans to launch Glargine and Liraglutide in Q4 ( both are biosimilars )

The Derma companies and brands acquired by the company in FY 22 have seen an EBITDA margin improvement from 10 pc to 35 pc inside 2 yrs !!!

Both the injectable plants acquired by Eris are currently running on single shift basis offering significant operating leverage opportunity to the company

Eris intends to do a business of 100 cr in the domestic mkts from year-1 iro the newly acquired Injectable facilities

Looking at Swiss Parenteral’s RoW focus ( basically branded and unregulated mkts ), wide product portfolio ( they make a lot of injectable antibiotics ) , R&D focus and juicy EBITDA margins - its a sweet sweet deal for Eris

Swiss Parenteral currently operates on distributors led front end in the RoW mkts. After partnership with Eris and Eris’s brand name, the front end distribution challenge in the Indian Mkt is virtually gone for Swiss. Hence, its a win win for both

Eris had acquired the derma and nephro brands of Biocon Biologics for 366 cr in Mid Nov 23. This business is doing a Gross Margins of around 70 pc vs 50 pc at the time of acquisition !!! This portfolio is likely to do a revenue of 10 cr or so / month from next FY onwards

Eris intends to put up another Injectables plant under the guidance of Swiss Parenteral. It may need a capex of 40-60 cr

Company is on track to achieve 2000 cr topline, 700 cr EBITDA, 400 cr PAT for FY 24

Disc: holding, a core holding, biased, added more recently, not SEBI registered, not an investment advice

[ranvir]

Emami Ltd -

Q3 FY 24 highlights -

Sales - 996 vs 983 cr
EBITDA - 314 vs 294 cr ( margins @ 32 vs 30 pc )
PAT - 261 vs 233 cr

Domestic business was flat on a YoY basis - mainly impacted by delayed onset of winter. Non winter products grew 5 pc, Winter products de-grew by 9 pc

International business grew 8 pc

Gross and EBITDA margins expanded by 290 bps and 170 bps YoY due reduced RM inflation

Brand wise performance -

Navratna range - grew by 7 pc

Zandu / Emami pain management - grew by 3 pc

Zandu Healthcare - flat ( because of the weakness in the winter dependent Chavanprash category )

Boroplus range - degrew by 9 pc

Kesh King - degrew by 13 pc

7 in 1 oil - degrew 5 pc

Fair and Handsome + He Deodorants - degrew by 6 pc

The Man Company + Brillaire ( strategic investments ) - grew by 80 pc

New product launches - Mahabrigraj hair Oil, Dantveer Toothpaste, 7 in 1 oil in international Mkts

Company believes that they have a winner on their hands wrt Dantveer because of its unique formulation

Company believes that Kesh King’s de-growth is a one off and it should be back on growth path from Q4

The Man Company is now an EBITDA positive category for the company. In Brillaire, the EBITDA margins are now at minus 20 pc vs minus 40 pc YoY. Both these improvements have happened due to increased scale iro these brands

RM prices continue to be benign

Company continues to be bullish on their Healthcare business

Company is sitting on a cash balance of 400 cr

Disc: hold a small tracking position, biased, inclined to buy more once the volume growth picks up, not SEBI registered

[ranvir]

Mayur Uniquoters -

Q3 FY 24 highlights -

Sales - 175 vs 170 cr

EBITDA - 38 vs 33 cr

PAT - 29 vs 26 cr

Total sales volume was 70.55 lakh meters. Out of this Poly Urethane sales volume was 2.07 lakh meters

Segment wise sales breakdown -

Exports -

Export general - 18 cr

Export OEMs - 35 cr

Domestic -

Auto OEMs - 42 cr

Auto Replacement - 38 cr

Footwear - 34 cr

Furnishings - 6 cr

Expect BMW export volumes to go up 10 X from current levels wef Apr 24 ( ie the ramp up will start wef Apr 24 )

Decline in exports in Q3 is partly attributed to strike at Ford’s plant in US. The same now stands resolved

Expect the slowdown in Auto Replacement segment to continue in Q4, Q1 FY 25 as well because of new regulations wrt compulsory airbags for the rear seats

Company has significantly increased order books from Ford, Mercedes, BMW (for exports) at Hand. The ramp up will start wef Q1. Full impact shall however be visible in FY 26 only

Zara has visited company’s facilities on 04 occasions. Expect to get orders in next FY

Company has been very cautious in not chasing low margin business. Because of this extreme focus on profitability, it is taking time to break through and obtain new business

Furnishing business is gradually picking up. Company is able to sell 20k meters / month. It’s a consumer-facing, high margin business. Once it ramps up fully ( say 2-3 yrs in order to get to > 1 lakh meters / month ), should add significantly to the bottomline

Company is already selling furnishing materials to 500 dealers. Company is onboarding 15-20 dealers / month

Disc: hold a small tracking position, waiting for company’s export volumes to pick up before adding more, biased, not SEBI registered

[ranvir]

GSK Pharma -

Q3 FY 24 concall highlights -

Revenues - 805 vs 802 cr
EBITDA - 218 vs 229 cr ( margins @ 27 vs 28 pc )
PAT - 46 vs 165 cr ( due an exceptional provision of 163 cr wherein company laid off some employees as a part of its restructuring efforts, hence had to pay for the VRS. Company has laid off 12 pc of its MRs )

Company has a large presence in vaccines and general medicine segments

New focus areas in India - Adult Vaccines
(starting with Shingrix - a vaccine for adults to prevent Shingles) and new Respiratory products

Q3 of LY was a very good Qtr. Hence, the growth this yr looks tepid because of the base effect. Vaccines portfolio grew 10 pc in Q3. Shingrix continues to ramp up well

Company commands 24 pc mkt share in Paediatric vaccines in India in the private - self pay segment

Key brands like - Calpol, T-Bact ( antibacterial ointment ) grew strongly in Q3. Company had to cope up with a minus 8 pc impact on its sales because of the NLEM. Still managed to keep the topline flat

Vaccines form 18 pc of company’s total India business. EBITDA margins are lower in Vaccines as these are imported and the company effectively trades them

Despite severe pricing pressures from NLEM regulations in last 5-6 yrs, company has still improved its EBITDA margins by around 700 BPS over that period

Company is aggressively growing its new and innovative respiratory assets - Trelegy and Nucala ( both for asthma ). These brands are growing at a very healthy rate. Trelegy is big brand for GSK in the international mkts clocking sales > 16000 cr / yr

Company intends to launch new and innovative Onco, Respiratory products in India in next 2-3 yrs. Most of these are big brands in developed Mkts

The layoff of MRs in q3 should aid margins in Q4. MR count now stands at around 2500-2600

Nucala is a monoclonal antibody. Has been showing extremely positive results. Company is adding an avg of 1000 patients/yr. It’s an expensive treatment. Costs aprox 70k / month

Trelegy is also growing very strongly. Treatment with Trelegy also costs > 50k / month

Shingrix is doing a sale of 7-8 k injections / month. It was launched in May last year. Each injection costs > Rs 9k

MR productivity at around 85-90 lakh/ MR

Trials are on for GSK’s global asset Bepirovirsen before it can be launched in India. It’s used to treat chronic Hep-B. It can potentially be a really large molecule

Company’s 40 pc portfolio is under NLEM

Calpol and its brand extensions continues to be No.1 prescribed brand in India

Company has 03 major Oncology brands in the international Mkts. Will introduce them in India at some point in time ( maybe 2-3 yrs )

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

[ranvir]

Kopran Ltd -

Q3 FY 24 results and concall highlights -

Company’s business verticals -

API’s - Company has a product portfolio of 26 successfully commercialised APIs

Major APIs / segments where company is present -

Atenolol ( anti-hypertensive ) - company is one of the leaders in this molecule

Sterile Carbapenems

Sterile and Non- Sterile Cephalosporins

Macrolides

Others

Formulations - Company is only into exports of fixed dose formulations

(tablets, capsules, powders and suspensions) -

Penicillin based FDFs

Macrolides

Anti Hypertensives

Cardiovascular

Others

9M FY 24 API wise sales -

Carbapenems - 107 cr

Macrolides - 32 cr

Sterile Cephalosporins - 15 cr

Anti-Hypertensives - 32 cr

Urology antibiotics - 27 cr

Neuromodulators - 14 cr

Others - rest of API sales

Out of these, export : domestic API sales breakdown- 97 cr : 140 cr

9M FY 24 Formulation sales breakup - country wise -

South Africa - 96 cr

Africa - 53 cr

SE Asia - 20 cr

UK - 14 cr

Others - rest of formulation sales

Q3 FY 24 financial outcomes -

Revenues - 161 vs 160 cr

EBITDA - 25 vs 14 cr (huge margin expansion)

PAT - 16 vs 7 cr

Net Debt / Equity @ 0.19 pc

Margin expansion due better product mix due introduction of new products, lower RM costs, cost control initiatives. Expecting margin expansion to sustain in coming Qtrs

Company intends to get into manufacturing of KSMs to achieve better backward integration and to lower import dependence

Also intend to improve their share of sales to regulated mkts by adhering to better compliance standards

Company has invested heavily in Capex in last few years ( aprox 100 cr ). Expect Capex intensity to reduce going forward

Expect company’s new API plant at Panoli to go live in Q1 FY 25

Wrt new products, company intends to focus on anti-diabetic and cardiology products - both for regulated and unregulated markets

Company is already into contract manufacturing of APIs. This segment should expand going fwd

Once company starts making KSMs, EBITDA margins should end up touching 20 pc !!!

Company looking to clock 25-30 pc CAGR for next 2-3 yrs !!! Initially, most of this growth will be driven by semi / unregulated Mkts before the growth in regulated Mkts pick up after 2-3 yrs

Seeing very good demand outlook for Carbapenems from Domestic, Africa and LATAM mkts

Aiming to hit 1000 cr topline in 3 yrs. Additional 200-300 cr shall come from the new Panoli site. Rest from the existing facilities

These days, LATAM mkts are tightening their regulatory requirements in a meaningful way

As company improves its backward integration, aims to improve GMs beyond 40 pc for APIs and 35-40 pc for formulations

Disc: hold a small tracking position, looking to add more, biased, not SEBI registered

[ranvir]

Surya Roshni -

Q3 FY 24 results and concall highlights -

Sales - 1938 vs 2021 cr
EBITDA - 158 vs 164 cr
PAT - 90 vs 90 cr

Dip in sales due - slowdown in demand of value added products in Steel pipes business and flattish growth in lighting and consumer durables segments

The margins in lighting and consumer durables business saw significant improvement. Professional lighting segment witnessed high teen growth

Gross debt reduced by 168 cr in 9M FY24. Debt/Equity now stands at 0.12. Company aims to be debt free by Q1 FY 25 - one year ahead of its target

Lighting and Consumer durables segment is now debt free

Segment wise Sales / EBITDA / PBT -

Steel Pipes and Strips- 1536 cr / 121 / 92 cr
Lighting and durables- 402 cr / 37 cr / 30 cr

Despite a domestic slowdown in Steel Pipes business, exports grew by a healthy 23 pc

EBITDA / ton also improved to Rs 6156 vs Rs 5104 ( QoQ )

Steel pipes and strips division -

Company’s 04 manufacturing plants are located in - Haryana, MP, Gujarat and AP

Products include - Structural, GI, ERW, Spiral, Black pipes and CR strips. Company is the largest exporter of ERW pipes from India

Lighting and FMEG division -

No 2 consumer lighting brand in India
Emerging brand in Fans, Home appliances
Lighting division saw an EBITDA margin expansion of 250 Bps in Q3

The high value add segment in the steel pipes business include - ERW pipes and Spiral pipes. In Q3, ERW pipes witnessed a modest volume growth but the Spiral pipes division saw a sharp decline of 38 pc

Exports form about 20 pc of company’s steel pipes business. EBITDA / Ton is better in export markets. It is generally in the range of Rs 9000 - 10000 / Ton. In Q3, exports grew by 25 pc

Company is guiding for EBITDA / Ton for Q4 to be better than Q3 with a volume growth of 10 pc

Volume growth guidance for FY 25 @ 15 pc for both Steel and Lighting division

Board will give due consideration to the possibility of a demerger of Lighting business. The board admitted that the company is clearly undervalued considering their superior EBITDA / Ton vs industry peers and an almost debt free status. Demerger can lead to significant value unlocking for shareholders

Company is a big exporter of Pipes to ME, Canada, Europe and Australia/NZ. Infra / construction boom in ME is a nice tail wind for the company

Company has lined up a brownfield capex spend of 150 cr for the next FY. Also likely to announce another Greenfield capex of around 300 cr in the next board meeting. It is likely to be in the Western India. This shall greatly help the country save logistics costs while selling in Maharashtra, AP, Telangana etc

Company does significantly better EBITDA/Ton vs APL Apollo in the ERW segment

Company is guiding for an EBITDA of Rs 600 cr with a topline of 7800 to 8000 cr for FY24 with a 15 pc growth potential for FY25

Lighting industry has had tough 3-4 yrs. Things should only get better from here. This yr, company hopes to clock an EBITDA of around 9 pc for full FY. Should be able to clock double digit EBITDA margins for next FY

Disc: bought again after Q3 results, a small position, biased, not SEBI registered

[ranvir]

DODLA DAIRY -

Q3 FY 24 results and concall highlights -

Revenues - 746 vs 675 cr ( up 12 pc )
Gross profits - 224 vs 171 ( margins @ 30 vs 25 pc )
EBITDA - 82 vs 53 cr ( margins @ 11 vs 8 pc )
PAT - 41 vs 35 cr ( margins @ 5.5 vs 5.2 pc )

Avg daily milk production @ 17.5 lakh liter per day ( LLPD ), up 36 pc YoY !!!

Revenues from value added products @ 186 cr, up 22 pc in Q3 - a huge positive and a key matrix to track. For 9M FY 24, sale from VAPs now at 28 pc of company sales

Curd sales grew by 12 pc YoY @ 132 cr
( included in VAP sales )

Company has expanded its cattle feed capacity by 6 times from 80 MTPD to 480 MTPD. Went live in Jan ( done via its subsidiary - Orgafeed )

Also commissioned a new Dairy plant in Kenya in Q2 FY 24 with a capacity of 1 lakh LPD

Intend to set up a Greenfield dairy plant in Maharashtra. Details shall be shared when the plan is finalised. May end up spending 150-200 cr of cash for the same. Company has > 200 cr of cash on books

Intend to double Orgafeed’s revenues to 200 cr by end of FY 25

The procurement prices in Q4 are holding up at similar levels as Q3 ( usually they are higher vs Q3 )

In Q4, the sales volumes are gradually picking up vs Q3

Company is procuring far higher Qty of milk/day vs its daily milk sales. This helps the company to convert excess milk to Skimmed Milk powder, Ghee and Butter. Earlier, company had to resort to being SMP and butter from third parties to sell it in the Mkt. This should further aid the margins

Confident of achieving 15 pc topline growth for FY 25 as clocking additional 100 cr revenues from animal feed and 100 cr from Kenya is a high probability event

Company aims to maintain advertisement spends at 0.5-0.7 pc of sales

Both Butter and SMP have a shelf live of 18 months under storage conditions. Therefore, its not risky to hold additional inventory of these items

Disc: holding, biased, not SEBI registered

[ranvir]

Dhanuka Agritech -

Q3 FY 24 results and concall highlights -

Revenues @ 403 vs 393 cr { volume growth @ 8.5 pc, price growth at (-) 6 pc }

Gross profit @ 155 vs 130 cr ( margins @ 38 vs 33 pc )

EBITDA @ 62 vs 51 cr ( margins @ 15 vs 13 pc yoy )

PAT @ 45 vs 47 cr ( due steep jump in Depreciation cost @ 13 vs 4 cr YoY - on account of the new Dahej facility )

Company operates via 03 manufacturing plants, 41 warehouses, 6500 distributors and over 1000 strong field force

Product wise sales break up (YoY) -

Insecticides - 32 vs 29 pc
Fungicides - 21 vs 20 pc
Herbicides - 35 vs 39 pc
Others ( Plant growth Regulators ) - 12 vs 12 pc

Geography wise sales break up ( YoY ) -

North - 22 vs 22 pc
South - 39 vs 38 pc
East - 12 vs 11 pc
West - 27 vs 29 pc

Company signed a LoI with a Spanish biotech - Kimitec to set up a JV in India to commercialise biological crop protection products. Kimitec operates the largest Biotech Lab for Agro products in EU

Invested in a startup - KissanKonnect - it delivers farm produce directly to consumers through it mobile app and stores network

Significant Gross Margin expansion is due to improved sales from speciality vs generic products

Expecting a high single digit volume growth in Q4 as well

There r 3 types of Biological agro products that the company is working on - Bio Nutrients, Bio Stimulants, Bio Regulators. Some of Kimitech’s products are already approved in India. Company intends to start rolling out these products in the next Kharif season. The Mkt for Bio products is growing very fast @ 15-16 pc CAGR in India. Margins in these products are > company level Gross Margins

For FY 25, a lot of exiting launches are lined up in the Herbicides, Insecticides categories. This should help the company clock double digit revenues with improved margins in FY 25 ( that would be a bumper outcome … IMHO )

Company launched an innovative Japanese product - Decide used against the sucking pests for the chilli crop ( a few years back ). It ended up being a huge hit. Has scaled up well. Another product - Zanet - a fungicide for Tomato crop has been doing very well. On similar lines, company is going to introduce a new Herbicide for the Ground nuts and Soyabeans crops

Company had earlier guided for 80-100 cr of topline from the Dahej pant for FY 25. However, due to a slowdown in the AI mkts ( globally ), company is likely to revise this guidance lower. Still expect Dahej plant to be EBITDA positive inside next 2 yrs. This yr, Dahej plant has clocked an EBITDA loss of around 10 cr for 9M FY 24

Management remains extremely exited about the new and innovative product launches in next FY

Disc: holding, biased, not SEBI registered

[ranvir]

Devyani International -

Q3 FY 24 results and concall highlights -

Revenues- 843 vs 790 cr
Gross margins @ 70.6 vs 70.8 pc
EBITDA - 146 vs 173 cr (margins @ 17.4 vs 22 pc)
PAT - 5 vs 71 cr ( due materially higher interest and depreciation costs, Devaluation of Nigerian currency and subsequent hit of 12 cr against the same )

Brand - New Stores addition in Q3 - Grand Total

India -

KFC - opened 50 stores - total @ 590
Pizza Hut - opened 30 stores - total @ 565
Costa Coffee - opened 8 stores - total @ 154
Vaango - opened 1 store - total @ 54
Others - did not open any stores - total @ 24

Nepal -

KFC - opened 3 stores - total @ 25 stores

Nigeria -

KFC - opened 2 stores - total @ 40 stores

Thailand -

Acquired Restraunts Development ltd in Q3 - operating 283 KFC stores in Thailand. Deal completed in Jan 24

Brand wise performance -

KFC -

Avg Daily sales per store @ 1.04 vs 1.16 lakh
Total sales @ 524 vs 459 cr
Gross Margins @ 69 pc vs 68 pc

Pizza Hut -

Avg Daily sales per store @ 37 vs 43 thousand
Total sales @ 179 vs 183 cr
Gross margins @ 76 vs 74 pc

Costa Coffee -

Avg Daily sales per store @ 35 vs 37 thousand
Total sales @ 40 vs 29 cr
Gross margins @ 77 vs 78 pc

Company is present in > 250 cities in India

Q3 saw subdued consumer sentiment. Weakening in Nigerian currency also continued in Q3. As the consumer sentiment changes, company’s performance should turn around

Company is likely to Hit a total of 2000 stores by Dec 24 - 2 yrs ahead of time, helped by the Thai acquisition

The performance of KFCs acquired in Thailand will get reflected in the consolidated results of Q4 FY 24. Company intends to introduce other brands in Thailand

Company estimates that the Nigerian business may continue to need support for next 1-2 yrs as well

The operating margins of the Thai business are 3-4 pc lower than the Indian KFC business. Company intends to improve these margins to bring them at par with India KFC margins

Total consideration for the Thai Acquisition is 1060 cr. DIL shall invest aprox 340 cr upfront out of that. Temasek will invest another 340 cr. DIL and Temasek will invest the remaining amount after obtaining bank funding. DIL shall hold 51 pc and Temasek shall hold 49 pc in the acquired entity

Despite the slowdown in consumer sentiment, the company’s store expansion remains strong ( except Pizza Hut - where the company is not being so aggressive ) This is due to their belief that the consumer sentiment should turn around at some point in time

Thai business won’t require any fresh cash infusion. Its a self funded business

Pizza Hut is facing a lot of completion from the local players. At the same time, these local players are helping Pizza category become the biggest QSR category in India

**Broad store opening tgt for FY 25 - **

KFC @ 130-140 stores, Pizza Hut @ 60-70 stores, Costa Coffee @ 50-60 stores

Disc: hold a small tracking position, will add only if the performance improves, biased, not SEBI registered

[ranvir]

Piramal Pharma -

Q3 FY 24 results and concall highlights -

Revenues - 1959 vs 1716 cr, up 14 pc
EBITDA - 576 vs 514 cr, up 94 pc ( margins @ 17 vs 10 pc - huge improvement )
PAT ( before exceptional item ) - 35 vs (-) 90 cr

EBITDA margin expansion led by better operating leverage, lower RM prices, cost optimisation initiatives

Segment wise revenues -

CDMO - 1134 vs 1010 cr
Complex Hospital Generics (CHG) - 567 vs 514 cr
India Consuer Health (ICH ) - 252 vs 226 cr

Company seeing good traction in CHG business even in Mkts outside US

All of company’s recently inspected CDMO facilities received EIRs from USFDA

Company seeing good demand traction for innovation related and on-patent work in its CDMO division ( specially for the molecules in the commercial stages )

Company launched 03 new generic injectable products in US and EU in Q3. Have a product pipeline of 25 more generic injectables in various stages of development

Maintained media and advertisement spends at 13 pc for their ICH business ( these r unusually high levels - should reduce going fwd )

Power brands ( in ICH ) - I-Range, Littles, Tetmosol, LactoCalamine, Polycrol grew by 12 pc and contributed to 41 of ICH sales

E-Commerce contribute 17 pc of ICH sales

Company received first oder for Anti-Body drug conjugates involving monoclonal antibodies

Company is maintaining its Mkt leadership in Intrathecal Baclofen ( 78 pc mkt share ) and Sevoflurane ( 44 pc mkt share ) in US mkt

Q4 is generally the strongest Qtr. Same is likely to continue for this FY as well

At present, 35 molecules are in Phase -III in the company’s CDMO pipeline

Steady state gross margins for the company are in the range of about 65 pc

As the scale of operations increase, company expects further improvement in EBITDA margins

Expect capex intensity to reduce going fwd vs last 2 yrs

The OnPatent: Generic split in the company’s CDMO business is at 45:55 with a tendency towards increase in the OnPatent work with every passing year

CHG business in US is witnessing moderate pricing declines. Company is launching new products, improving backward integration and selling greater volumes to counter the same

Current Debt/EBITDA at around 3.5. Aim to bring it down to below 3 in short term

Current asset turns achieved by the company are around 1-1.2. Aim to take it to above 2 in next 2-3 yrs

Company aims to close FY 24 with a high teens kind of topline growth ( that means - Q4 should be bumper )

Disc: holding, biased, inclined to add more, not SEBI registered

[ranvir]

Some companies that reported strong Q3 results, pointed at continued strength in business over next 1-2 yrs, are still avlb at not so expensive valuations ( IMHO ) are as undermentioned -

Time Technoplast
Piramal Pharma
Kopran Ltd
Eris Lifesciences
RPG Lifesciences
Kamat Hotels
Dhanuka Agritech
Akzo Nobel Ltd
Dodla Dairy
Alembic Pharma
FDC Ltd
Nippon AMC
Usha Martin

Disc : I am holding shares in all of these, biased, not SEBI registered, not an investment advice, one is requested to do his own due diligence

[ranvir]

Senco Gold -

Q3 FY 24 results and concall highlights -

Revenues - 1652 vs 1339 cr ( up 23 pc. Out of this, 920 cr of sales were clocked in a single day on Dhanteras )

EBITDA - 181 vs 162 cr ( up 11 pc, noteworthy margin compression due higher employee and other expenses - due higher investments in newer stores )

PAT - 109 vs 103 cr ( up 6 pc due higher depreciation, interest costs )

Revenue growth led by - higher gold prices - up 15 pc, higher stud ratio and new store openings @ 19 additional stores vs LY ( out of these, 04 are franchisee stores )

Q3 volume growth @ 9 pc in gold and 27 pc in Diamond jewellery

Current number of showrooms - 155. Company operated stores @ 90, franchise stores @ 65

Stores present across 105 towns and cities

Last 3 yr - revenue CAGR @ 19 pc, ROCE @ 14.2 pc, ROE @ 19 pc

Dec 23 stud ratio at 11.6 pc vs 9 pc in FY 21

Avg transaction value @ 65k vs 57k in FY 21

Share of organised player in the Jewellery industry @ 40 pc vs 15 pc in 2001

Segment wise industry break up -

Bridal - 50-55 pc
Daily wear - 35-40 pc
Fashion - 5-10 pc

Geography wise industry break up -

Urban India - 40 pc
Rural India - 60 pc

As urbanisation improves, this may change

Company’s geographical spread -

WB + Kolkata - 90 + 21
North - 22
Central - 4
West - 7
South - 5

Almost all of franchise stores ( except 1 ) are in WB

About 33 pc of company’s revenues come from Franchise stores

Brand ambassadors - Kaira Advani, Vidya Balan, Saurav Ganguly, Madhumita Sarcar, Diptipriya Roy, Ishaa Saha

Company has strong digital presence by the name - Sencoverse to attract Gen Z customers

Company has launched new product ranges under the Sennes brand -

Laptop Bags
Backpacks
Men’s Wallets
Leather Bags
Other accessories

Company has enrolled itself on the ONDC platform as well

Aim to open 18-20 stores/yr for the foreseeable future

Company’s same store growth in Q3 is healthy @ 17 pc

Company seeing good demand trends in Q4 as well. Company guiding for 23-24 pc growth for full FY 24

Company seeing better growth rates and better stud ratios in the North. For the time being, North - including UP, Chandigarh, and NCR are focus areas for the company

Aiming to maintain full FY’s EBITDA margins at around 7 pc

South is a hyper competitive mkt for Jewellery. Hence the company’s focus remains to be North and East. Company will continue to be a niche player in South. Company’s stores in South are already profitable

On an avg, 60 pc of company’s buyers are repeat and 40 pc are new buyers

Capex plan for next FY at around 60 cr - mostly for new store openings

Company believes, it can open another 12-15 stores in WB in next 2-3 yrs in tier - 2,3 cities

Disc: holding, biased, not SEBI registered

[ranvir]

Shalby Ltd -

Q3 FY 24 results and concall highlights -

Revenues - 220 vs 207 cr, up 6 pc
EBITDA - 47 vs 38 cr, up 23 pc ( margins @ 21.2 vs 18.5 pc )
PAT - 19 vs 15.5 cr, up 25 pc

Standalone Revenues @ 200 cr, EBITDA @ 47 cr, PAT @ 25 cr ( all grew at very healthy rates )

Net Cash ( minus debt ) on books @ 61 cr

Company’s portfolio / businesses -

10 Multi Speciality hospitals across West, Central and North India. A leader in Joint replacement in the represented market

60 OPD domestic clinics + 16 international OPD clinics ( mainly in Africa )

06 Franchisee hospitals

US based Knee and Hip implants manufacturing facility

Total bed capacity @ 2150 + beds, present across 13 cities in India

Q3 operational matrices -

ARPOB @ 37.3 vs 36.3 k
Occupancy rate @ 47 vs 43 pc
Surgery count @ 6746 vs 6782

Hospitals business segmental revenue percentages -

Anthroplasty - 43 pc
Critical care - 9 pc
Cariac - 9 pc
Onco - 10 pc
Ortho - 10 pc
Neuro - 5 pc
Nephro - 4 pc
Others - 11 pc

Hospitals business payor mix -

Self pay - 35 pc
Insurance - 41 pc
Govt - 24 pc

Implants business sales mix -

India - 57 pc
US - 43 pc

Implants business financials -

Revenues @ 21 cr, up 46 pc
EBITDA @ 20 lakh
No. of constructs sold @ 2630 ( 70 : 30 - Knee : Hip )

Company invested 102 cr to acquire 87 pc stake in Sanar International hospital Gurugram. Its current bed capacity is 130, expandable to 180. This hospital caters mostly to international clients ( 68 pc of its revenues )

Still have the vision to grow the implants business to 800 cr / yr kind of sales in 5 yrs

Sanar International is likely to do a 30-35 cr / Qtr kind of topline for next yr. Also, the ARPOBs here are much higher - in the range of 1 lakh. However, current occupancies are low @ around 25 pc. Currently making EBITDA losses

Aiming to do high single digit EBITDA margins from the implants business by end of next yr

Mumbai - is a Greenfield project ( Hospital ) that’s lined up by the company. May take 3-4 yrs to go live

Aiming for 20-22 pc growth in EBITDA for next FY without accounting for the new facilities and inorganic opportunities like the Sanar hospital

Seeing pickup in no of surgeries in Jan, Feb 24. Confident of doing better business in Q4 vs Q3
Disc: holding, biased, not SEBI registered

[saurabhgupta]

Thank you so much sir for your continous knowledge sharing. I am a non finance guy who started investing just 1-2 years before ,just want to know how you do scuttlebuts?

[ranvir]

To sum up the whole process -

Learn - how to read a balance sheet, P&L statement, cash flow statement - elementary self help books are available on the subject

Read a few investment framework forming books. I would recommend -

One up on Wall Street
The Warren Buffett Way
Buffettology
Common stocks and uncommon profits

And … ur ready to go

After that - its all about reading Qtly investor presentations, concalls, general news on economy ( just to stay up to date - not very imp though )

That’s about it