Ranvir's Portfolio

Q&A: Questions & Answers Portfolio Q&A
1700

Ajanta Pharma -

Q2 FY 26 results and concall highlights -

Revenues - 1354 vs 1187 cr, up 14 pc
EBITDA - 328 vs 311 cr, up 5 pc ( MTM forex losses stood @ 41. Excluding this, EBITDA would have grown by 23 pc with margins @ 27 pc )
PAT - 260 vs 216 cr, up 20 pc

R&D expenses stood @ 5 pc of sales

Segmental revenues -

India - 432 vs 386 cr, up 12 pc
Asia - 310 vs 296 cr, up 5 pc
Africa - 221 vs 213 cr, 4 pc
US generics - 344 vs 232 cr, up 48 pc
Africa tender sales - 32 vs 44 cr, down 25 pc

72 pc of company’s formulation sales are branded. Rest 28 pc are generics

65 pc of company’s India sales come from chronic therapies. 11 pc of their sales come from NLEM products. Indian MR force stands @ 3600+ covering 2.7 lakh Doctors

55 pc of India sales come from top 10 brands. 15 of company’s brands clock annual sales > 25 cr

Breakdown of therapy wise sales contribution of India business -

Cardio - 37 pc
Opthal -30 pc
Derma - 23 pc
Pain Management - 10 pc

Company’s Q2 India sales witnessed a 3 pc volume growth. Rest came from new products ( 5 pc ) and price hikes ( 4 pc )

Company launched 19 new products in Asia + Africa in H1 FY 26

Company’s active products in US @ 50 with 54 active approvals. Field 2 ANDAs in H1. Aim to file another 8-12 in H2

Some comments from previous concalls -

Have added 40 MRs in Asia + Africa in Q1. Planning to add another 210 MRs in these regions by the end of FY 26. So the total MR count in Asia + Africa should rise from 2000 to 2250 by end of current FY

Actively on the look out for inorganic growth opportunities

Notes from Q2 concall -

Have paid an interim dividend of Rs 28/ share amounting to Rs 350 cr

A few of orders from Company’s Asia business were pushed to H2 thus affecting Asia business’s growth in Q2 and H1. Confident of achieving low teens growth in their Asia business for full FY 26 ( indicating a significant pickup in sales in H2 )

Have launched 13 new products in Asia in H1 ( mostly in Chronic therapies )

Africa branded business grew by 1 pc in H1. Confident of achieving double digit growth in Africa business for full FY 26 - had earlier guided for single digit growth from Africa ( again indicating towards a strong business momentum in H2 )

Launched 6 new products in Africa in H1

US business grew by 42 pc in H1

Company’s India business also has a component of trade generics business. Its contribution in Q2 stood @ 52 cr, up 18 pc YoY

Gynae, Nehphro - are the two new therapies that the company ventured into in India in last FY. Building up descent momentum in both. Results should be visible by next FY

High employee expenses in Q2 and H1 were due to aggressive hirings made by the company in last FY ( to expedite their organic growth in India and EMs )

Guiding for GMs of 77+/- 1 pc and EBITDA margins of 27+/- 1 pc for FY 26

Capex for full FY 26 should be at 300 cr ( have already incurred 145 cr in H1 )

Guiding for 40 pc + growth in US business for H2 followed by high teens growth in FY 27

Should add another 100 MRs in India and aprox 150 MRs in Asia + Africa in next 1 yr

Disc: holding, biased, inclined to add more, not EBI registered, not a buy/sell recommendation, posted only for educational purposes

1701

Yatharth Hospitals -

Q2 FY 26 results and concall highlights -

Revenues - 279 vs 217 cr, up 28 pc
EBITDA - 64 vs 54 cr, up 18 pc ( margins @ 23 vs 25 pc )
PAT - 41 vs 31 cr, up 33 pc ( due higher other income )

Cash on books @ 370 cr

Corporate level occupancy @ 66 vs 60 pc YoY
ARPOB @ Rs 32k vs Rs 30.6k
ALOS @ 4 vs 4.3 days
IPD revenues @ 249 vs 190 cr
OPD revenues @ 30 vs 27 cr

New hospitals led the revenue growth with a YoY jump of 110 pc. Mature hospitals witnessed a revenue growth of 19 pc

Hospital wise revenue percentage split for Q2 FY 26 vs Q2 FY 25 -

Noida extension - 33 vs 37 pc
Greater Noida - 29 vs 31 pc
Noida - 19 vs 21 pc
Jhansi - 8 vs 7 pc
Greater Faridabad - 10 vs 4 pc
New Delhi - 1 vs NIL

Split of company’s total bed capacity -

Mature hospitals -

Noida - 250 beds, Occupancy @ 89 pc
Noida extension - 450 beds, Occupancy @ 64 pc
Greater Noida - 400 beds, Occupancy @ 69 pc
Jhansi - 305 beds, Occupancy @ 71 pc

New Hospitals -

Greater Faridabad - 200 beds
New Delhi ( new opening ) - 300 beds
Faridabad ( new opening ) - 400 beds
Agra ( new acquisition ) - 250 beds

Comments from previous concalls -

Greater Faridabad hospital turned net profit positive within 1 yr of its opening ( its ARPOB was Rs 31 k )

Company estimates that both Delhi and Faribabad hospitals ( 2 new openings in Q2 ) should turn PAT positive in 15 months time

Greater Noida + Noida extension - brownfield expansion should now begin ( post opening of 2 new hospitals in Delhi ). Aim to add aprox 250 beds here ( combined ) by FY 28. Greater Noida + Noida extension brownfield should cost them aprox 175 cr. This brownfield expansion should go live in H2 FY 28

Notes from Q2 concall -

New Delhi’s hôpital went live in Jul. Faridabad hospital also went live towards the end of Q2. Both these r seeing increasing footfalls

Acquired a 250 bed Hospital ( Shantived Hospital ) in Agra for 260 cr ( all cash deal ) in Sep 25

CGHS rates have been revised wef Mid Oct - a big relief for the Industry

5 of company’s hospitals are located near Jewar International airport - should help them with medical tourism

In Q2, mature and new hospital clusters witnessed an ARPOB growth of 9 pc and 19 pc respectively

Model Town ( New Delhi ) facility started operations with ARPOB of Rs 33k - very encouraging sign. Occupancy here is already clocking 15 pc or so

Typically, occupancy required for a new hospital to break even is 30-35 pc

Agra Hospital’s financials will be consolidated with Yatharth wef 01 Jan 26

Payor mix - Govt Business @ 37 pc. Rest is equally divided between self pay and Insurance

Doctor’s salaries + Incentives as a percentage of revenues stand @ 21 pc

Jhansi Hospital is now clocking a very healthy occupancy of 71 pc

Capex spending outlay for next 5 yrs should be around 1500 cr. This includes the latest Agra acquisition, brownfield expansions at Noida and a new Greenfield facility or another acquisition that the company may go in for

Company has started opening International catchment centers - to tap international patients ( will be opening in Central Asian and African mkts ). Have already opened at 2 locations. Noida + Faridabad’s proximity to Jhewar airport should help them tap into international patients. ARPOBs in case of international patients are generally 30-40 pc higher vs domestic patients

Agra’s hospital is expected to clock ARPOB of Rs 30k + ( to begin with )

Agra’s hospital will be EBITDA positive from Day 1. H2 EBITDA margins should be close to H1 margins. Still maintaining their 30 pc + revenue growth guidance for full FY 26

The revision in CGHS rates should incline company’s revenues by about 2.5 pc and EBITDA margins by 1 pc in next FY

For next 2-3 yrs, avg corporate ARPOB growth should be in the range of 6-8 pc / yr, with an upward bias

The brownfield expansion @ greater Noida and Noida extension should go live in 18 months time from now

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes

2 Likes
1702

Akums Drugs -

Q2 FY 25 results and concall highlights -

Some extracts from Q2 management commentary -

We are excited to share that as part of our international expansion strategy, we entered into a JV with the Zambian government to set up a pharmaceutical manufacturing plant, having capabilities across multiple dosage forms and therapeutic areas in Zambia. Additionally, over the next two years, we envisage supplying medicines of aggregate value of USD 50 million from Indian facilities to Zambia. The plant also aims to establish Zambia as a pharma export hub by catering to neighboring African countries. Akums will hold 51 pc in this JV. Additionally, GRZ to procure medicines worth USD 25 million per annum from Akums for FY27 and FY28. Capex required from Akums will be aprox 200 cr, rest 200 cr shall be provided by Govt Of Zambia

Another milestone we achieved recently was our first commercial supply of formulations in Europe, with the supply of Dapagliflozin tablets to Switzerland. We will also supply Rivaroxaban in Europe in Q3. The European contract for oral liquid supply is on track with Plant 2 undergoing EU-GMP Audit in October

Our financial position remains healthy with robust cash flows during H1. Our net cash position of over INR 1,600 crore gives us leverage to pursue both organic as well as inorganic growth opportunities

While the performance during Q2 was below our expectations, we remain focused on delivering long term shareholder value by further cementing our leadership position in CDMO business, taking measures to grow our domestic and exports branded business and curtailing losses in API and trade generics

Some comments from Q1 concall -

Company’s top therapeutic areas wrt their domestic branded formulations include - paediatrics, gynaecology, cardiology

Company’s top destinations for their exports business include - Uganda, Nigeria, Philippines, Myanmar, Cambodia. Current export business is around 140 cr / yr. Aim to ramp it upto 900 cr / yr in next 5 yrs

Capex lined up for FY 26 @ 300 cr to set up new lines for Onco drugs, Steroids , LBPs ( live bio-therapeutic products )

Capex required in order to serve the European contract shall be around 200 cr ( to be incurred @ their Baddi plant ). The European contract should be a 320 - 340 cr / yr kind of business for the company, lasting 6 yrs ( starting Mar 2027 ). EBITDA margins should be around 14-15 pc wrt this contract

The API business that the company operates was acquired via IBC proceedings ( where in they acquired Parabolic drugs ). Company got credits against 870 cr of previous losses which they plan to utilise over next 3-4 yrs ( hence their tax rates shall continue to remain on the lower side )

Have received European approvals for 2 molecules - Rivaroxaban and Dapagliflozin. Company doesn’t have a field force in EU. Shall continue to supply / operate in EU mkts as a CMO supplier to other Pharma companies / Big Pharma distributors / participate in Tenders. Company expects their EU business to have better margins than their domestic CMO business. In next 3-4 yrs, company intends to own at least 10 sizeable dossiers in European mkts ( to supply to large distributors / participate in tenders ). This doesn’t include the large CMO contract from EU that the company has won and has got advance payment for

Inorganic areas where the company is looking at includes - acquiring capabilities to make dosage forms that they currently don’t have or an acquisition that gives them ready access to new markets so they can ramp up quickly

Wrt API business, company has global ambitions - to sell in Europe, LatAm and African mkts. Should continue to invest behind this business

The API business that the company operates was acquired via IBC proceedings ( where in they acquired Parabolic drugs ). Company got credits against 870 cr of previous losses which they plan to utilise over next 3-4 yrs ( hence their tax rates shall continue to remain on the lower side )

Q2 outcomes -

Revenues - 1018 vs 1033 cr
Gross margins @ 41.8 vs 42.3 pc
EBITDA - 94 vs 121 cr, down 22 pc ( margins @ 9.3 vs 11.7 pc ) - due operating de-leverage
PAT - 43 vs 67 cr, down 36 pc

Segmental revenues and EBITDA margins for Q2 -

CMO - 804 vs 799 cr, margins @ 10.5 vs 15.4 pc
Domestic branded - 122 vs 116 cr, margins @ 21.6 vs 17.8 pc
International branded - 22 vs 26 cr, margins @ 24.5 vs 13.8 pc
Trade generics - 24 vs 33 cr, margins @ (-) 3 vs (-) 6 pc
APIs - 44 vs 59 cr, margins @ (-)14 vs (-) 14 pc

H1 performance -

Revenues - 2042 vs 2052 cr
EBITDA - 223 vs 245 cr, down 9 pc ( margins @ 11 vs 12 pc )
PAT - 107 vs 124 cr, down 14 pc

Segmental revenues and EBITDA margins for H2 -

CMO - 1618 vs 1581 cr, margins @ 12.6 vs 15.4 pc
Domestic branded - 229 vs 220 cr, margins @ 18.4 vs 15.5
International branded - 57 vs 60 cr, margins @ 23.5 vs 18.3 pc
Trade generics - 48 vs 62 cr, margins @ (-) 6 vs (-) 10 cr
APIs - 89 vs 129 cr, margins @ (-) 20 vs (-) 26 cr

Notes from Q2 concall -

Top 200 APIs used by the company witnessed an avg YoY drop of 8 pc - hence the sluggishness in CMO division’s topline growth. CMO business witnessed a volume growth of 7 pc

CMO margins were hit by slower than expected ramp up of their new facilities and higher overhead costs

International branded business is expected to have a strong H2 led by demand pull from their focussed mkts

Cash on books @ 1650 cr. Enables them to go after both organic and in-organic opportunities

Three of company’s plants are going in for EU GMP certification - due increased filings and launch intentions of the company in Europe ( as brought out in the management commentary above )

Company has filed for 2 Cephalosporin based Formulations in the EU mkts. Should get an approval in next 6 months. GMs in EU are better. This would help the company use its APIs captively and help improve the API business’s operating performance. Also the Cephalosporin API prices should start to recover in next 3-6 months

Depending on the market conditions ( as company sees them today ), H2 should broadly be in line with H1 ie a topline around 2050 cr and bottomline around 105-115 cr ( just like H1 )

The large European contract against which the company has also got > 900 cr in advance is for the supply of an Oral Liquid molecule in various dosage strengths and different packagings, be supplied to one of the largest pharma company globally, starting Apr 27, to be supplied from Haridwar facility ( recently inspected by EU GMP officials ). Company would be supplying goods worth > 300 cr / yr for 6 yrs

Charging notional interest of Rs 19 cr / Qtr to the P&L - against the advance they have got from the European major. Anyways, its a non cash entry

Zambian contract should start going live in next FY. In FY 28, both the Zambian and EU contracts would be online. Plus the organic growth should also pick up wef next FY. Additionally the new set of molecules that the company intends to sell in EU should add to growth going forward

Capex in H1 @ 107 cr. H2 capex should be similar

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

1 Like
1703

Eris Lifesciences -

Q2 FY 25 results and concall highlights -

Revenues - 792 vs 741 cr, up 7 pc
Gross margins @ 74.5 vs 75.9 pc
EBITDA - 288 vs 265 cr, up 9 pc ( margins @ 36.4 vs 35.7 pc )
PAT - 134 vs 97 cr, up 39 pc ( due steep fall in depreciation, interest costs )

Q2 capex @ 50 cr - largely towards Insulins, GLP-1s, General Injectables

Debt on books @ 2280 cr vs 3000+ cr on 31 Mar 24 ( 18 months ago )

Segmental performance -

Domestic business -

Revenues @ 708 cr, up 10 pc. H1 revenues @ 1410 cr, up 11 pc
EBITDA @ 266 cr, up 11 pc. H1 EBITDA @ 527 cr, up 13 pc

Guiding for a full FY revenue growth of 12 pc. EBITDA growth for full FY expected @ 15 pc with margins near 37.5 pc. Upside from RHI cartridges business may provide an upside to these numbers

Prices increases that company has taken in late H1 should also aid growth

Biocon’s acquired business reported EBITDA margins of 30 pc vs 19 pc at the time of acquisition. In house manufacturing should lead to further margin expansion in FY 27

Biocon has entered an agreement to supply all three types of Insulins - RHI, Glargine and Asphart to Eris for India and select RoW mkts. Eris would be able to sell these in RoW mkts using the distribution network of Swiss Parenterals

Also, Eris’s Insulin Vials facility @ Bhopal went live in Aug 25. Have produced 20 lakhs vials since then

Company should also be the first to market wrt the GLP 1 opportunity ( post Mar 26 ). Their leading position in Insulins ( @ 15 pc Mkt Share ) should help them do really well in GLP-1 mkt

International business -

Q2 revenues @ 83 vs 84 cr. H1 revenues @ 152 vs 158 cr

Q2 EBITDA @ 27 vs 25 cr. H1 EBITDA @ 50 vs 50 cr

Shortfall in H1 revenues due non-availability of dry powder capacity as the same was occupied for validation batches of EU CMO projects

Still on track to report full FY 26 export revenues of 380-390 cr

Swiss Parenterals now ranks among the few Indian companies to have both EU and ANVISA approvals. Have received first purchase order to make Reference Listed Drug ( RLD ) - ie the Innovator brand of the product. Should bring in revenues worth 125-150 cr in FY 27 with similar EBITDA margins. Discussions underway to expand this contract to 17 countries

**Swiss Parenterals is in discussions with large generic companies to make Corticosteroids and Complex Carbohydrates for both RLD and LoE ( loss of exclusivity opportunities ) **

Clearly, this business is nearing an inflection point

Initiated 130 cr capex for their Unit -3 ( all their 4 units are located at Ahmedabad )

Notes from previous concalls -

Commenced insulin vials production from Bhopal facility in Q1. Should commence production of Insulin cartridges wef Q4

GLP-1 mkt in India should be 2500-3000 cr in the first year of launch and should grow from thereon

Aim to take up the International business revenues to 1000 cr by FY 29 ( from a base of aprox 370 cr at present )

The Insulin mkt being vacated by Novo Nordic in India is of the order of 500 cr/ yr. Eris should be able to capture 200 cr/yr out of the same

Company exports business should pick up wef FY 27. They have confirmed contracts of > 100 cr / yr ( combined value ) like -

Corticosteroids in DPI form for several EU countries for Client -1

Niche Betalactam DPI ( antibiotic - dry powder inhaler ) for EU countries + AUS/NZL + Canada for Client 2

Niche Betalactam DPI for a different set of EU countries for client 3

Corticosteroids in Ampoule form for UK for client 4

Anti Fungal injections for UK mkt for client 5

Notes from Q2 concall -

Company’s RHI cartridges business should go live in Dec 25

Company had acquired Bhopal Insulin capacity LY and upgraded it by spending 80 cr

Key triggers in near term include - pick up in domestic Insulin business ( as the Innovator exits ), GLP-1 launch in Q1 next yr, as Bhopal plant ramps up - Biocon branded business’s EBITDA margins should improve further ( from 30 pc at present ), acceleration in export business wef next FY ( as mentioned above )

Company’s current stake in Levim Lifetech stands @ 30 pc. Eris intends to invest another 100 cr in Levim. Naturally the stake should go up ( management did not specify the exact number )

Over and above the Insulins / GLPs, company has a couple of significant launches lined up for Q3 / Q4 - should help accelerate growth in H2

Guiding for EBITDA margins of 37 pc for domestic and 34 pc for International business ( Swiss Parenterals ) for H2

US mkt is a great example where the GLP1s and Insulins have co-existed for a decade now. GLP-1s work as a “glucose sensitizer” for beta cells, potentiating insulin’s effects to restore normal blood glucose levels, but their action is dependent on the presence of elevated glucose and the availability of insulin. Hence - both therapies co-exist

Company’s EU CMO order book has the potential to grow to 700 - 800 cr / yr kind of business in next 3 yrs ( its currently @ 100 cr / yr - starting next FY )

Company has started seeing heightened demand for their Insulin products wef Nov ( as the Innovator has exited recently ). Augurs well for company’s domestic business in H2

Disc: core holding, biased, not SEBI registered, not a buy / sell recommendation, posted only for educational purposes