Ranvir's Portfolio

Q&A: Questions & Answers Portfolio Q&A
1197

Dhanuka Agritech -

Q1 FY 25 concall and results highlights -

Revenues - 494 vs 369 cr, up 33 pc ( massive jump, volume growth was 39 pc !!! )
Gross Margins @ 35 vs 33 pc
EBITDA - 72 vs 44 cr, up 64 pc (margins @ 15 vs 12 pc)
PAT - 49 vs 33 pc, up 48 pc

Guiding for 20 pc topline growth for FY 25

Three of company’s newly launched products - Purge, Lanevo and Mycore - are doing exceedingly well in the marketplace and exceeding even the company’s expectations

Plan to launch two - 9(4) “me too” and two - 9(3) “exclusive” products in current FY

Product wise sales breakup -

Insecticides - 25 pc
Fungicides - 10 pc
Herbicides - 50 pc
Others - 15 pc

Rains have been much better than last year but still not as good as was expected. In July, the rains were erratic affecting the sales of herbicides. IMD forecasts for Aug,Sep are above avg

RM prices are largely stable

Company has approved a stock - buyback worth Rs 100 cr at a price not exceeding Rs 2000 / share

Because of erratic rains in July, expecting low double digit topline growth in Q2

Guiding for an EBITDA margin of 18 pc vs 19 pc in FY 24 ( LY, the margins were exceptionally good )

Currently, 9(3) kind of exclusive molecules ( launched in collaboration with Innovators ) contribute to 25 pc of company’s turnover

Company is working with some innovators to get CMO opportunities to make patented AIs. Nothing has been finalised yet

Currently, the Dahej plant ( making AIs ) is operating in negative EBITDA zone. To start making one more AI from Dahej before FY 25 end. Also exploring opportunities for CMO of patentented molecules from Dahej facility

In collaboration with Kimitech ( Spanish Company ) - should bring in few new Biological products in India by end of FY 25. Bio - agri inputs are a fast growing area and can potentially be a large mkt going fwd ( in long term )

Expect Dahej facility to start making money in FY 27

The patented products ( that the company in-licesnces ) from Innovators contribute to aprox 500 cr of company’s topline at present

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

1198

Glenmark Pharma -

Q1 FY 25 concall and results highlights -

Revenues - 3244 vs 3036 cr, up 7 pc
Gross margins @ 66 vs 61 pc
EBITDA - 588 vs 437 cr, up 35 pc ( margins @ 18 vs 14 pc )
PAT - 340 vs 173 cr, up 98 pc

R&D expenses @ 241 cr ( 7.4 pc of sales- very healthy )

Geography wise sales breakup -

India - 1196 vs 1069 cr, up 12 pc ( 37 pc of sales ) - Witnessed strong growth in Derma, Respiratory and Cardio segments in India. Entered into a partnership with Beigene for marketing and distribution of Tislelizumab ( to treat Eesophagal cancer ) and Zanubrutinib ( to treat blood and bone marrow cancers ) in India

India consumer care division ( having brands like - Candid, LaShield and Scalp ) grew by 12 pc

Glenmark Pharma is ranked 2nd in both Derma and Respiratory segments in Indian Mkt. Company ranks 5th in the Cardiac segment

North America - 780 vs 818 cr, down 5 pc ( 24 pc of sales ). Filed for gFlovent ( for treatment of Asthma ) in May 24. Aim to focus on Respiratory and Injectables business in US - going fwd

Europe - 695 vs 573 cr, up 21 pc ( 21 pc of sales ). All key mkts recorded double digit growths. Poland and Czech Republic grew > 20 pc. Branded respiratory portfolio ( including RIYALTRIS - anti-histamine nasal spray ) continues to do well. Awaiting approvals for 4 more respiratory products field in Q4 LY. Planning to launch WINLEVI ( Acne - cream, in-licensed by Glenmark Pharma ) in select mkts in Europe in FY 26

RoW - 570 vs 552 cr, up 7 pc ( 18 pc of sales ). RIYALTRIS got approval in Mexico. RIYALTRIS is doing well in RSA, Kenya and KSA

Brand Updates -

Riyaltris - commercialised across 40 mkts. Will be launched in 10 additional mkts in FY 25. Has been witnessing strong sales in US,EU, RSA

Envafolimab - company has In-Licensed this drug from China. It’s an Immuno-Onco drug. Company plans to file Envafolimab in more than 20 Mkts and expect to commence launches in FY 26 ( this drug can potentially be as big as Riyaltris )

WINLEVI - company has in-licensed it for 15 mkts in EU

FY 25 guidance - Sales > 13500 cr, EBITDA margins around 19 pc, PAT margins in double digits

Company feels that US business should see a recovery in US business in H2. They have filed a lot of respiratory products in the US. As and when they r approved and launched ( most probably in H2 ), business should pick up. The company’s Monroe’s facility is due for USFDA inspection ( currently under OAI status - since Nov 22 ). If the FDA observations are resolved, should further add to business momentum. Company’s Goa site is also awaiting re-inspection post receipt of OAI status in Dec 22

Generally, company’s H2 is better than H1 as their respiratory portfolio’s ( one of their strengths ) sales picks up

Company is looking to enter into some partnerships wrt their Novel molecules pipeline ( should happen by FY 26 )

Company’s four main sites for the US mkt are - Goa, Monroe, Aurangabad and Indore. Baddi site is not a major contributor to the US business

Company’s gross margin guidance @ 65-67 pc

Riyaltris sales for Q1 were around $ 20 million. On track for $ 80 million sales for FY 25. China launch of Riyaltris is still > 1 yr away - that should be another big mkt

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

3 Likes
1199

Sun Pharma -

Q1 FY25 concall and results highlights -

Revenues - 12653 vs 11941 cr, up 6 pc
EBITDA - 3608 vs 3332 cr, up 8 pc ( margins @ 29 vs 28 pc )
PAT - 2861 vs 2006 cr ( due exceptional loss of 323 cr in the base Qtr )

R&D spends @ 794 vs 679 cr YoY

Geography wise breakdown of sales -

India - 4144 vs 3560 cr, up 16 pc
US - 3889 vs 3870 cr, flat
EMs - 2369 vs 2145 cr, up 9 pc
RoW - 1581 vs 1604 cr, down 3 pc

Major milestones for Sun Pharma in Q1 -

Speciality portfolio clocking global sales of 2207 cr, up 15 pc YoY

Approval of Leqselvi in US ( for treatment of Alopecia Areata )

Filing of Nidlegy in Europe for approval ( for treatment of skin cancer ). Sun Pharma will have the rights to sell this drug in EU and ANZ

Completion of acquisition of minority shareholding of Taro Pharmaceuticals

Sun Pharma continues to be ranked No 1 in Indian Pharma mkt with mkt share of 8.3 pc. Launched 6 new products in India in Q1

In Q1, launched 5 new generic products in US

A litigation has been filed ( citing patent infringement ) by Incyte ltd in US to stall the launch of LEQSELVI. A favourable order by the court or an out of court settlement - both options are available to the company in order to ensure a speedy launch of LEQSELVI. LEQSELVI should have an annual sales potential of around 500 cr / yr ( to begin with )

Seeing encouraging response for ILLUMYA in the Chinese mkt. Going fwd, China should end up being a sizeable mkt for ILLUMYA

Likely to see a ramp up in R&D costs in the next 3 Qtrs of this FY

Company believes, there is still headroom to grow wrt the ILLUMYA sales. Also, trials are on to get ILLUMYA approved for Psoriatic Arthritis indication. If that happens, an additional segment will open up for this drug

Bulk of company’s EM business is branded. Pure generics form only a tiny portion of the same

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

1 Like
1200

Kopran ltd ( bullish commentary ) -

Q1 FY 25 concall and results highlights -

Revenues - 139 vs 117 cr
EBITDA - 18 vs 6 cr ( margins @ 13 vs 5 pc )
PAT - 11 vs 3 cr

Segment wise revenues -

APIs - 90 cr vs 73 cr YoY ( Domestic : Export sales @ 44 cr : 46 cr ). Bulk of API sales come from - Carbapenems, Macrolides, Urological Antibiotics and Anti - Hypertensive therapeutic categories

Company has 02 API manufacturing facilities. Company is a major player in sterile Carbapenems and a leader in - Atenolol molecule category

Formulations - 49 cr vs 44 cr YoY ( all exports - to both regulated and unregulated markets ). Ratio of Penicillin : Non Penicillin based formulation sales @ 34 cr : 15 cr

Formulations plant is located @ Khopoli, Maharashtra - making dosage forms like - tablets, capsules, dry powder and suspensions

Q1 is generally a lean Qtr for company’s formulations business. From Q2 onwards, should do a formulations sale of 80-90 cr / Qtr

Have received environmental clearance to commence production at the Panoli plant ( new API facility ) from Central Govt. State Govt’s clearance is awaited shortly

Company is planning to put up a vial filling line for their sterile Penems like - Meropenem, Doripenem, Ertapenem. This will help them improve their margins

Company is guiding for a topline growth of 18-20 pc with an EBITDA of around 100 cr for FY 25 ( LY EBITDA was 74 cr )

In Q1, EBITDA margins in API segment were 14 pc and 11 pc in the formulations segment. As the formulations revenues pick up, their margins should improve because of operating leverage

This FY, company hopes to clock a full year EBITDA margins of 14-15 pc. In 3-4 yrs, the aim is to reach 20 pc EBITDA margins. Also, aim to achieve 1200-1300 cr of topline in 3-4 yrs

The new Panoli plant should start contributing meaningfully to top and bottomline wef FY 26

Over a 2-3 yrs period, the Panoli plant should add 200-300 cr to the topline ( ballpark estimates )

However, for the Panoli plant to get US FDA approval, it ll take a min of 3 yrs from now

All the KSM that the company is making and hopes to makes are for captive consumption ( to improve backward integration ) and should help them reduce their dependence on China

For FY 26, FY 27 - the API segment should grow by > 30 pc CAGR because of operationalisation of the Panoli plant

Formulations should grow @ 10-15 pc CAGR for next 2 yrs

For the Panoli plant, company shall be focusing on CNS, Cardio and Anti-Diabetic ( basically all chronic therapies ) therapies.

Capex guidance for next 3 yrs combined @ 100 cr ( includes the Vial-filling lines for the Penems )

Company’s top selling molecules are Meropenem and Atenolol - contributing to roughly 20 and 15 pc of sales respectively. The next three molecules combined contribute to another 20 pc of sales ( roughly )

Company is the second largest maker of atenolol in the World ( first is IPCA labs ). In Morepenem, company faces competition from Aurobindo, Sun, Hester, Rajasthan Antibiotics. However, they have been the largest producer of Morepenem in India in last 6 months

Teva ( a global - generics giant ) is the largest consumer of Atenolol. They have recently stopped producing this API. Kopran has already supplied validation batches to Teva. Expect, Teva’s entire business to be routed to Kopran over a period of time ( in about 1 yr or so )

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

6 Likes
1201

Sterling Tools -

Q1 FY 25 concall and results highlights -

Revenues - 283 vs 223 cr, up 27 pc
EBITDA - 34 vs 27 cr, up 27 pc ( margins @ 12 vs 12 pc )
PAT - 18 vs 13 cr, up 38 pc

Company is the second largest manufacturer of fasteners and the largest manufacturer of MCUs in India. Has 04 manufacturing plants for fasteners and 01 plant for making MCUs

Results of SGEM ( their subsidiary that makes MCUs - Sterling GTAKE E-Mobility ) -

Revenues - 120 vs 75 cr, up 60 pc
EBITDA - 10 vs 6 cr, up 66 pc ( margins @ 8 vs 7.5 pc )
PAT - 7 vs 5 cr

Company expects that the EV penetration in the LCVs should improve once right products come to the market and that should happen shortly ( like it happened with E- 2Ws ). Company should be a big beneficiary via their subsidiary - GTAKE Mobility

Revenue contribution from top 10 customers in the SGEM is > 90 pc as the E-2Ws and 3Ws mkt is a concentrated market ( with top 4-5 players having lion’s share of the mkt )

Company’s current export share @ 3 pc. Company acknowledges it to be their weak link. They intend to take it up in future

Company has added Hyundai and Kia to their list of customers for their fasteners business. This should give a descent bump up to their base business

Have added E-3W customers to their GTAKE business. That should also help in ramping up their revenues by end of FY 25

Consolidated capex plan for FY 25 stands @ 55 cr ( almost equal split between Fasterners and MCU businesses )

In the EV segment, company aspires to sell additional range of products to their customers wef FY 26 - that should aid revenues in next FY

In the 2W - EV segment, OLA is their largest customer. Company is the single source supplier to OLA electric

An avg MCU costs aprox 8-12 pc of the cost of a two wheeler - depending on model to model

Company is the single source supplier of MCUs for all the 2-wheeler models that the company is supplying to ( this is a big deal - IMO )

Company aspires to be present in all aspects of power electronics and control electronics - as far as EV eco-system is concerned. That’s their ultimate aim and these are the areas where their new product line up will be coming from

Company has announced setting up of Greenfield capacity in India to make magnetic and electronic auto components in a JV with Yangin Electronics. Yangin is a major supplier to Kia and Hyundai Motor companies. Aim to generate a 200 cr/ yr kind of business from this initiative ( inside next 5 yrs ). A partnership with Yangin is expected to help company have firm visibility on orders from the Korean OEMs in India. Beyond the Korean OEMs, company will also target the Indian OEMs for these Electro-Magnetic components

EV business margins are likely to remain in single digits for the foreseeable future

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

2 Likes
1202

Usha Martin -
Q1 FY 25 concall and results highlights -

Revenues - 826 vs 814 cr, up 1.5 pc
EBITDA - 154 vs 146 cr, up 6 pc ( margins @ 19 vs 18 pc )
PAT - 104 vs 101 cr ( capitalisation of new facilities led to higher depreciation in Q1, ramp up of these capacities is expected to better absorb these costs in future )

Segment wise revenues -

Wire Ropes - 595 vs 553 cr, up 8 pc
Wire and Strand - 71 vs 65 cr, up 9 pc
LRPC - 88 vs 116 cr, down 24 pc

Wire rope segment is the value added, high margin segment - now contributes to 72 pc of company’s revenues

Geography wise business breakup -

India - 44 pc
Europe - 25 pc
Asia Pacific - 13 pc
Middle East - 8 pc
America - 10 pc

Steel prices / Ton @ 51.9k vs 59.2k

EBITDA / Ton @ 32.6k vs 32.2k - largely flat( indicating high degree of value addition )

Gross Debt @ 317 cr
Net Debt @ 73 cr

Key demand drivers going forward -

OEM approvals and successful project references to drive performance in US and Europe

New opportunities in Oil and Offshore sectors

New orders from Wind energy sector - due increased focus on green energy

Launch of Synthetic slings in later half of FY 25

Indian govt’s focus on ropeways, bridges and high speed railways

Major projects like - Parvatmala - are expected to drive demand over next few years

Increased high - rise constructions leading to increased demand for elevator ropes

During the Qtr, company’s primary focus was on ramping up the newly established facilities for their value added products. This should result in stronger performance in H2 for the company

GoI has planned aprox - 250 ropeway projects for next 5-7 yrs - should augur well for the company

Company’s Galfan wire capacity is coming up in next 3-4 months. These wires are used across Europe to make rockfall barriers in the hilly areas. The same are also required extensively in the Himalayan regions. This should again be a good demand driver for the company

Company is expanding its capacity in their European venture. Even in Europe, demand is good for Oil, Gas and Wind energy sectors

Expecting double digit demand growth for the elevator ropes for next 3-5 yrs - both in India and International mkts

Company expects volume and value growth ( both ) to pick up wef Q2. Even in relatively commoditised segment of LRPC ropes, company is focussing on plasticated and galvanised LRPC to drive better value

Company is reasonably confident of maintaining EBITDA / Ton of around 32k for the remainder of the this FY ( despite weakness in steel prices )

Company sees it various initiatives ( that its taking these days ) to bear good economic fruit inside next 2 yrs

Company’s incremental capex are all in the value added areas - this should be margin accretive going fwd. Even in LRPC segment, margins should improve going forward due Galvanisation and Plasticisation of their products

Guiding for a volume growth of 10 pc for FY 25 ( that’s because - even if the value added products grow strongly, the demand is tepid in the general purpose ropes and LRPC segments ). This volume growth should accelerate wef FY 26 - provided there are no major geo-political tensions / headwinds

Employee costs should moderate going into Q2 and onwards as there were some one time performance bonuses that were given to the employees in Q1

**Price for normal LRPC is around 65-70k / Ton. For plasticated, this price rises to between 135-170k / Ton - depending on the specifications **

General purpose ropes sell for around 135 k / Ton where as specialised / value added ropes sell for double that price

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

4 Likes
1203

Sir the knowledge that you have and the way you present concall notes is very easy to understand even to a layman investor like me. Thank you sir for constantly helping and sharing your knowledge.

3 Likes
1204

Sir what are your views on Premier energies valuation, if it list at around 800 and how do you see companies future growth?At what valuation should we look at this company as it is backward integrated and largest solar cell exporter of India and also planned for a capex.Solar is a sunrise sector and looking at our country’s power need going forward due to data Centres, EV , IOT etc.i think this is a sector worth investing.How do you think of this sector?
Availability of Solar is really good in India ( We have geographical advantage) and due to advanced efficiency tech. like- Topcon playing imp role in reduce solar cost.

1205

Godrej Agrovet -

Q1 FY 25 concall and results updates -

Revenues - 2351 vs 2510 cr, down 6 pc

EBITDA - 235 vs 204 cr, up 15 pc ( includes an exceptional loss of 18 cr due write down of inventory of Astec Lifesciences. Adjusted for that, EBITDA would have been 253 cr )

PAT - 132 vs 107 cr

Segment wise revenue and EBITDA breakdown -

Animal feed - 1155 cr, 78 cr
Vegetable Oils - 215 cr, 23 cr
Crop protection + Astec Life - 383 cr, 115 cr
Dairy - 429 cr, 28 cr
Poultry and Processed food - 234 cr, 24 cr

Boost in profitability in Q1 led buy robust volume and value growth in Crop protection business ( minus Astec ) and margin expansion in Animal feed + Dairy business

EBITDA / Ton in animal feed business improved sharply to Rs 2258/MT vs Rs 1443/MT, however the volumes were adversely affected due to subdued milk prices

Margins in Veg Oils business reduced due lower Oil extraction ratio

Astec’s generic business continued to see sharp price erosions. Also, deferral of CDMO orders further led to margin compression

Margins in Dairy business improved by 490 bps - led by operational efficiencies and better milk spreads. Contribution of Value added products improved to 42 pc from 36 pc of sales ( big jump )

In the poultry segment, company continues to focus on the branded business and de-focus the live bird business

Astec business is showing improvement in the domestic mkt but continues to face challenges from Chinese dumping in the international markets. However, they hope to grow the CDMO business by 60-70 pc CAGR for next 2-3 yrs. LY, Astec’s CDMO business did a revenue of around 260 cr

Post the heat wave in Q1, rains have been good in July. This should ideally improve the oil extraction ratio and hence the performance of Veg Oil business

Company has acquired 100 pc stake in their Godrej-Tyson JV

ACI-Godrej - their JV in Bangladesh is now no2 player in Bangladesh in the animal feed industry. Since they have a local partner, their investment in JV should be safe

Company hopes to clock EBITDA margins of between 9-10 pc for the rest of FY 25 ( in Q1, margins were exceptionally high @ almost 11 pc )

Company intends to set up a new Greenfield capacity for their animal feed business. Should end up spending 110 cr or so for the same

Dsic : holding, biased, not SEBI registered, not a buy/sell recommendation

1 Like
1206

Advanced Enzymes -

Q1 FY 25 concall and results highlights -

Revenues - 155 vs 147 cr, up 5 pc
EBITDA - 51 vs 44 cr, up 16 pc ( margins @ 33 vs 30 pc )
PAT - 35 vs 29 cr, up 19 pc

Segment wise sales breakup -

Human nutrition - 101 vs 99 cr, up 2 pc ( 65 pc of sales )

Animal nutrition - 17 vs 16 cr, up 7 pc ( 11 pc of sales )

Industrial bio processing - 25 vs 22 cr, up 12 pc ( 16 pc of sales )

Specialised manufacturing - 11 vs 10 cr, up 10 pc ( 7 pc of sales )

Geographical breakup of sales -

India - 74 vs 74 cr, flat
Americas - 59 vs 47 cr, up 27 pc
Europe - 7.5 vs 6.5 cr, up 13 pc
Asia - 11 vs 12 cr, down 7 pc
RoW - 3 vs 8 cr, down 60 pc YoY

Manufacturing facilities -

08 in India, 01 in US
05 R&D units in India, 01 each in US and Germany

Company is a leading manufacturer of Probiotics and Enzymes. Company makes over 400 products derived to of 68 indigenous enzymes. These are substitutes of chemicals and find applications in diversified industries like - healthcare, agrochemicals, animal and human food etc

Enzymes - are proteinaceous molecules which serve as bio-catalysts. They not only replace traditional chemical agents but also bolster efficiency and efficacy of a wide array of products. Find wide applications in - baking, food processing, dairy processing, leather processing, biofuels, biomass processing, biocatalysis etc

Probiotics - are living microorganisms that confer significant health benefits to both humans and animals. They also find application in treating disease in areas like - inflammatory bowel disease, urogenital infections etc

Company stared its manufacturing operations in 1994 with just 07 enzymes. Today, it makes 68 different enzymes

Biggest entry barrier to this industry is real time R&D with requirements of continuous technical upgrades and efficiency improvements - both are long gestation traits

Company is expecting robust growth trajectory for all its products in H2 this yr

Company’s largest product - an anti-inflammatory enzyme ( serrapeptidase ) recorded a sales of 28 cr vs 35 cr YoY, a de-growth of 20 pc

R&D spends @ 7.6 vs 6.2 cr YoY

Company was working on some sugar management and weight loss products. The same has been launched in the US on a trial basis

Guiding for 33-34 pc kind of EBITDA margins for full FY 25. Also expecting a 12-14 pc kind of topline growth for full FY 25. Most of the growth should be back ended - ie - in H2

Capex requirement for current and next FY should be light @ 25-30 cr each

Company does have a lot of products ( around 50 of them ) under development ( at various stages ). As these products get their requisite approvals, go commercial - they should drive company’s growth

Company has also started their B2C business under the WELLFA brand - so make and sell wellness products. Currently in nascent stages - likely to clock 2-3 cr of annual sales

As a medium term vision - company aspires to keep growing at 10-12 pc kind of rates for next 4-5 yrs and breach the 1000 cr topline number

LY, company had a one off legal expense of 18 cr for settlement with a US based competitor. Don’t see any such exceptional expense this FY

Company’s current capacity utilisation @ around 60- 65 pc

According to the management, as the capacity utilisation improves, every 1 pc increment in revenue should lead to a 2 pc kind of growth in EBITDA and bottomline

Disc : holding, biased, not SEBI registered, not a buy/sell recommendation

6 Likes
1207

Sir why this business is making only 12% margins (Due to foray into EV or what is the reason),as against earlier they were making 17% kind of margins and margins are in declining trajectory,why?

1208

Garware Hi Tech films -
Q1 FY 25 results and concall highlights -

Revenues - 474 vs 380 cr, up 25 pc
EBITDA - 130 vs 89 cr, up 78 pc ( margins @ 27 vs 20 pc - massive margin improvement )
PAT - 88 vs 44 cr, up 100 pc

Cash on books @ 493 cr

Revenue growth driven by continued growth momentum in SCF and PPF business

Architectural SCF witnessed high growth with introduction of new products like SpectraPro and DecoVista

IPD division witnessed recovery in both speciality and commodity segments. Focussed approach on high end products like lidding films, PCR/floatable shrink films is leading to margin improvement in this segment

Segment wise sales mix -

Consumer Products Division ( SCF + PPF ) - 67 pc of revenues

Industrial Products Division ( VAP + Commodity products ) - 33 pc of sales. In the IPD, 66 pc of sales come from Value Added Products like - shrink films and other special IPDs. Rest 33 pc revenues come from commodity products

Overall, at a company level, VAP:Commodity products ratio @ 88:12 vs 83:17 in Q1 LY ( massive improvement towards VAP )

Opened new Garware Application studios in tier 2/3 cities like - Nahsik, Faridabad, Agra, Jammu, Srinagar, Azamgarh, Noida, Dehradun, Bhopal and Ahmednagar

Aggressively ramping up engagement with - Influencer community, car experts, Architects

Company is the only manufacturer of professional grade PPF in India

Company has one of the world’s largest single location SCF capacity

Domestic : Export sales ratio @ 24:76

Company’s new capacity of 300 lakh Sq Ft / annum is expected to begin production in Q2 of FY 26. Company is expected to spend Rs 125 cr for the said expansion. Company is currently running on full capacity and likely to do so till the new capacity comes up. This facility should have a revenue potential of between 300-350 cr / yr

Even within the SCF, company is increasing the sales of higher end - higher UV and heat rejection films. Margins in these films are 20-30 pc higher than the absolute basic SCFs ( with much lower UV and heat rejection properties )

Far higher margins in Q1 are also because Q1 is exceptionally good for SCFs

Company has the highest degree of vertical integration when it comes to making SCFs,PPFs - this gives them a big edge over the Chinese / Korean competition

Interms of revenue contribution in the CPD, max revenues come from SCF - Auto, then PPF, then SCF - architectural. SCF-architectural is currently growing at the fastest rate. Also, the runway for growth is the highest in the architectural segment because of under-penetration

Despite Q1 being a seasonally strong Qtr, company is confident of maintaining EBITDA margins of > 20 pc for full FY 25

Company is very confident of clocking 2000 cr and 2500 cr of sales for FY 25 and FY 26 !!!

Rough break up of company’s CPD sales between Branded : White Label ( sale to OEM etc ) stands at 50:50

Disc: holding, inclined to add more, biased, not SEBI registered, not a buy/sell recommendation

4 Likes
1209

Yes … the margins in the EV segment are lower. In single digits

But the growth in this segment is explosive. U can imagine - their growth is tied to the growth of 2W and 3W - EVs in India. This is the fastest growing segment of the Auto mkt and is likely to remain like that for the foreseeable future

2 Likes
1210

Dear Sir, what’s the total addressable market? (Capacity utilisation is around 60% only). And who are their major competitors in India and Americas?

1211

Technocrat Industries -

Q1 FY 25 results and concall highlights -

Revenues - 620 vs 556 cr, up 11 pc
EBITDA - 146 vs 145 cr ( margins @ 24 vs 26 pc )
PAT - 84 vs 91 cr

Segment wise revenues -

Drum closures - 151 vs 127 cr, up 18 pc
Scaffoldings and Formworks - 334 vs 274 cr, up 22 pc
Textiles division - 104 vs 139 cr, down 25 pc
Engineering and Design services - 49 vs 42 cr, up 18 pc

Segment wise EBIT -

Drum closures - 55 vs 40 cr, up 38 pc
Scaffoldings and Formworks - 53 vs 77 cr, down 31 pc
Textiles - (-) 12 vs (-) 4 cr
Engineering and Design services - 8 vs 9 cr

Company is hopeful of an improved performance in the Drum Closure division. No major capex ( except maint capex ) planned in this division

Company is confident about a margin revival in Scaffoldings and Formwork division because of anticipated growth in infrastructure and housing led demand in India. Company’s 02 plants in Aurangabad to make 17,500 MT of Aluminium Extrusion and 6,00,000 Sq Mtr of Aluminium fabrication has commenced production in Q1 ( a reason for lower EBIT in this segment due higher depreciation ) . They will be ramped up over the course of FY 25

Expecting the demand for engineering and design services to remain strong due to the strong acceptance of their offshore global delivery model

Company is the second largest drum closure manufacturer in the world, currently exporting to 75 countries. Company is guiding for single digit growth in this segment but the margins will sustain in > 30 pc band

Because of commercialisation of the Aurangabad facility, company expects incremental topline of 450 cr and EBIT of 80 cr for FY 26. For FY 25, incremental topline and EBIT should be 60 cr and 10-15 cr respectively

The scaffolding business continues to be soft in Europe. However, demand from US is descent

In the textiles business, company has commissioned a new spinning unit in May. Revenue from that will start to flow in Q2 whereas the expenses started to come in Q1. From Q2 onwards, company sees a descent uptick in the textiles business. For full FY, should add around 130 cr of topline to the yarn business. All textiles divisions combines ( Yarn + Fabric + Garments ), topline should be around 650 cr

Also expecting the textiles division ( Yarn + Garments + Fabric divisions ) to be EBITDA positive for this FY ( EBITDA percentage in the range of 8-10 pc )

Company is still awaiting - B certification in Europe for its Scaffolding business. They are expected to get it sometime in Sep

Aluminium formwork’s demand continues to outstrip supply ( despite having local and Chinese competition ). Local demand is so good that the company is not even able to export this product. Company’s current Mkt share in India is around 10 pc or so

Company’s steel formwork business did witness softness in demand in Q1 - because of the elections. Should pick up going forward. However, company’s main thrust and bulk of the business continues to come from Aluminium formwork. ( Steel formwork is mainly used for Infra projects while Aluminium formwork is mainly used in Real Estate sector )

Company sees very good demand outlook for its MAK-1 - aluminium formwork business - both from domestic and export markets for next 2-3 yrs

LY, company’s scaffolding + Formwork division did revenues of 1030 cr. This yr, company is expecting to do around 1250 cr and next year, they are expecting to do > 1800 cr from this segment ( because of the new capacity coming online )

For engineering services segment, expecting to do 20-25 pc CAGR topline growth for next 2-3 yrs

Expecting to touch a PBT of 500 cr for FY 25

Disc : holding, biased, not SEBI registered, not a buy / sell recommendation

2 Likes
1212

Supriya Lifesciences( very bullish commentary ) -

Q1 FY 25 concall and results highlights -

Revenues - 161 vs 132 cr, up 21 pc
Gross Margins @ 69 vs 64 pc ( massive expansion )
EBITDA - 63 vs 44 cr, up 41 pc ( margins @ 39 vs 34 cr )
PAT - 45 vs 29 cr, up 56 pc

Therapy wise business mix -

Analgesics / Anesthetics - 48 vs 46 pc
Anti - Histamines - 11 vs 19 pc
Vitamins - 11 vs 12 pc
Anti - Asthmatics - 7 vs 6 pc
Anti - Allergics - 5 vs 5 pc
Anti - Hypertensives - 4 vs 1 pc

Company has a niche product basket of 32 APIs. 15 products have a high degree of backward integration. They represent 70 pc of company’s revenues. Company is in the process of integrating 3 more products

Geography wise sales mix -

Asia - 33 vs 41 pc
Europe - 51 vs 34 pc
Latin America - 9 vs 10 pc
North America - 3 vs 9 pc
Others - 4 vs 6 pc

Top 10 customers account for 50 pc of sales

Exports constitute 80 pc of company’s sales

Company is the largest exporters of - Chlorpeniramine Maleate ( Anti - Histamine ), Ketamine Hydrochloride ( Anaesthetic ) and Salbutamol Sulphate ( Anti -Asthmatic ) from India

Currently, the top 3 products contribute to 45 odd pc of the revenues. In the next 3 yrs or so, company expects this to come down to 25 pc of revenues as other products ramp up. Expecting to add 3-4 new products / yr for the next few yrs

Surge in revenue contribution from regulated mkts ( EU ) has been margin accretive in Q1

Growth in future will be led by more molecule launches. Company initially launches their molecules in unregulated mkts and then introduces them to regulated mkts - over a period of time. Hence the business from new launches is likely to be margin dilutive - to begin with

The newer molecules that company intends to get into are going to be higher volume molecules ( vs their existing molecules ). Company will ensure high degree of backward integration to keep the competition at bay in these molecules

Company should be able to maintain EBITDA margins > 30 pc for full FY 25. Exactly how much above 30 pc can’t be said

With the new launches lined up in H2, share of business from North and Latin America should definitely move up

Revenues from the new CMO segment should start flowing in from Q3/Q4. Will see larger contributions from CMO business in FY 26

In the next 3-4 yrs, company expects CMO operations to contribute to 20 pc of their topline !!! ( this should mean rapid growth in CMO vertical )

Generally H2 is always better for the company vs H1. Likely to be the same for this FY too

Company new launches are in the areas like - anti-anxiety, anti-diabetics and aesthetics. These r likely to be large molecules ( in volume terms ) and are mostly part of China + 1 strategy of the customers. Full impact of these should be visible by next FY

Company has given a 20 pc topline growth guidance for this FY ( although they admitted that its on the conservative side )

**Company expects its Ambernath facility to commence commercial production - sometime in Q3. This facility will also cater to CMO of formulations. They r setting up large lines for bottling, tablets, capsules and Injectables at Ambernath. Total capital outlay for the Ambernath facility should be around 130 cr **

Company has been awarded a 10 yr CMO by a European player - DSM Fermenich. Supplies should start in H2. Have another 2-3 opportunities which are in final stages of discussion. Expecting positive outcomes on these before end of Q2

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

2 Likes
1213

Mayur Uniquoters -

Q1 FY25 results and concall highlights -

Revenues - 213 vs 201 cr, up 6 pc
EBITDA - 48 vs 39 cr, up 28 pc ( margins @ 23 vs 20 pc )
PAT - 37 vs 31 cr, up 22 pc ( Q1 saw higher tax rate vs last FY )

Company expects their export OEM sales to be buoyant this yr and in next 2 FY’s as well

In light of increased business prospects from US based OEMs, company is looking to acquire industrial land to set up manufacturing and warehousing facilities in Mexico. Total planned capex for the Mexico expansion should be around 200 cr. Company is looking to set up a 60 lakh mtrs capacity in Mexico. But company will take the final decision only after the US elections are over by end of this calendar year

Export : Domestic sales for Q1 stood at 32:68

Total volumes in Q1 stood at 71.3 vs 70.4 lakh mtr YoY

Capacity utilisation of the PU plant is currently low @ 20 pc. Working with a lot of foreign brands to introduce company’s PU material for their leather goods and footwear. Hopeful of good order breakthroughs inside next 1 yr

Company is looking to clock 15 pc kind of topline growth for current FY

Company’s Marnie business is showing steady improvement. However the base there is small at present

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

1214

Popular Vehicles and Service ltd -

Q1 FY25 results and concall highlights -

Company profile - Company Operates sales and service dealerships of - Maruti Suzuki ( both Nexa and Arena ), Honda, JLR, Tata Motors - commercial, Bharat Benz, Piaggio( 3W - EVs) and Ather electric

Brand wise number of showrooms operated by the company -

Maruti Suzuki - 20 ( 08 Nexa, 09 Arena, 03 Maruti CVs )
Honda - 8
JLR - 2
Tata Motors Commercial - 13
Bharat Benz - 8
Piaggio - 7
Ather - 3

Brand wise number of Service centers operated by the company -

Maruti Suzuki - 74
Honda - 10
JLR - 3
Tata Motors Commercial - 27
Bharat Benz - 18
Piaggio - 7
Ather - 3

In addition, company operates 32 outlets for sale / purchase of second hand cars. Company also deals in auto spare parts distribution in the states of Kerala and Karnataka through its network of 44 warehouses and 24 retail outlets. Company also distributes motor insurance policies

Q1 financial outcomes -

Revenues - 1291 vs 1206 cr, up 7 pc
EBITDA - 52 vs 54 cr, down 3 pc ( margins @ 4 vs 4.4 pc )
PAT - 5.4 vs 7.8 cr, down 29 pc

State wise revenue breakdown -

Kerala - 60 pc
TN - 26 pc
Maharashtra - 5 pc
Karnataka - 9 pc

In the next 2-3 yrs, want to bring down the revenue contribution from Kerala to below 50 pc

Segment wise revenues in Q1 -

Sale of new vehicles - 931 cr, up 10 pc ( volume growth was down 2 pc , growth led by premiumisation )

Sale of pre owned vehicles - 85 vs 91 cr, down 7 pc

Service + repairs business - 217 vs 208 cr, up 4 pc ( volume of no of vehicles serviced was down 1 pc )

Q1 is generally company’s weakest Qtr. Matters were made worse by slowdown due to heat waves in Apr, May followed by floods in Kerala in Jun, July + the general elections led slowdown

CV segment did well led by school bus segment

EV business did witness some slowdown, expected to pick up post launch of new model by Ather Electric in July

Service business was slow in Q1 ( mainly due adverse climatic conditions ). Service being the main driver of EBITDA, led to depressed margins in Q1. Company is seeing a descent revival in Q2 ( due early onset of festive season in Kerala ) and are hopeful of a good H2 performance

Slowdown in sales have also led to increased inventory levels in the Industry. This has adversely impacted the working capital. Company believes that the same may get corrected as the festive season kicks in

Company’s credit ratings have improved in last six months. This should help lower the borrowing costs

Company is likely to open seven new service centers in FY 25

Company is still maintaining its guidance of 15 pc topline growth for FY 25. They believe, improvement in financial performance should be visible wef Q2. WRT service and repairs business, they expect to grow by 20-25 pc

Honda’s new amaze is likely to be launched in early Sep. That should help the Honda part of their business

Company is seeing a significant pick up in sales deliveries wef 17 Aug ( an Auspicious day in Kerala )

Current Debt on books @ 420 cr

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

1 Like
1215

EBITDA is just 4% of revenue.
PAT is 0.4% of revenue.
Is it even a good business for retailers to hold?

1216

Glenmark Life Sciences -

Q1 FY 25 results and concall highlights -

Revenues - 588 vs 578 cr, up 2 pc
Gross margins @ 51 vs 57 pc
EBITDA - 165 vs 195 cr, down 15 pc ( margins @ 28 vs 33 pc )
PAT - 111 vs 135 cr, down 18 pc

Cash on books @ 426 cr

Breakdown of revenues ( by customers ) -

Non GPL business - 392 cr ( 67 pc of sales )
GPL business - 196 cr ( 33 pc of sales )

Breakdown of revenues ( by business segments ) -

Generic APIs - 535 cr ( 93 pc of sales )
CDMO - 42 cr ( 7 pc of sales ) - signed a multiyear agreement with an innovator for supply of API. Expect commercialisation wef Q4

Breakdown of revenues ( by target markets ) -

Regulated markets - 84 pc
Emerging markets - 16 pc

Breakdown of revenues ( by therapeutic segments ) -

Cardio - 41 pc
CNS - 16 pc
Anti-Diabetic - 4 pc
Pain management - 6 pc
Others - 33 pc

Contribution from chronic therapies @ 67 pc

Have added 05 APIs to the development grid - 03 are high potency - Onco APIs and 02 are synthetic small molecules

Manufacturing facilities -

Ankleshwar Gujarat - 742 KL ( additional 208 KL capacity will come on stream wef Q2 FY 25 @ Ankleshwar )
Dahej Gujarat - 381 KL ( additional 18 KL capacity will come on stream wef Q2 FY 25 @ Dahej )
Mohol Maharashtra - 49 KL
Kurkumbh Maharashtra - 25 KL

Greenfield expansion @ Solapur - phase -1 of construction has started to set up a 200 KL facility. Phase 2 @ Solapur shall add another 400 KL of capacity. In addition, 400 KL of backward integration capacity is also planned at the same site

Future growth drivers - Onco High Potency APIs, CDMO ramp up, expansion into complex APIs and Iron compounds, pursuing 2nd source opportunities for top generic players, geographical expansion

Future drivers of operational efficiencies - Debottlenecking, backward integration, adoption of flow chemistry in manufacturing

Company’s business with GPL did suffer in Q4. In Q1, there has been a smart recovery and this business is up 18 pc QoQ

Q1 was company’s first Qtr after a long time without the PLI benefits. Hence the contraction in Gross Margins. Slightly unfavourable product mix also contributed to GM compression

Company expects their CDMO business to pick up significantly in Q2

Company had received a closure notice from Gujarat Pollution control board ( in Mid July ) for its Ankleshwar site - citing pollution outside their plant / site. The issue was finally resolved on 14 Aug. Company should be able to catch up for the production loss as 1.5 months are still available in this Qtr

Company doesn’t expect their GMs to go below 51 pc in future

According to the management, upcoming demand environment is much, much better. The brownfield expansion that’s coming on stream should take care of this additional demand over next 1-2 yrs. After that, the Greenfield capacity at Solapur shall kick in

The Bio-Secure act in US is a definitive tailwind for the company’s CMO business - they did acknowledge the the same in the concall

Capex requirements for FY 25 @ around 350 cr. Capex outlay for FY 26 shall also be significant. Hence the dividends payouts, going fwd should be smaller vs past. Also - don’t intend to take on any debt for the planned capex for next 2-3 yrs

Company’s CDMO business currently has 3 commercial projects. Should add another 2 products by end of FY 25. These 2 projects should add 100 cr / yr to the topline. That should take the total CDMO business to around 250 cr / yr. Aim to take it to 500-600 cr / yr in next 4-5 yrs

Post the change of promoters and Nirma group taking over, company has become more aggressive wrt Capex

Disc: initiated a tracking position, biased, not SEBI registered, not a buy/sell recommendation

3 Likes