Unaudited Standalone and Consolidated Financial Results for the quarter and half year ended on 30th September 2024
I have been following US elections keenly and looks like the Trump could be winning with unprecedented majority allround. As per my friend with knowledge on US govt, Republicans could pass laws as well. JFK jr will be assigned with health and food department if everything goes smooth. And he is very against these weight loss drugs being promoted by US govt as well as individuals using them for weight loss instead of nutritious food. Dont you think it is big risk factor for Shaily and other pharma companies, which depend on US consumer/govt/insurance provider paying hefty amount for all medicine related stuff? On the other hand Indian companies which are pure play generics suppliers could have good business going forward, you f this eventuality materializes. Better keep an eye on RFK jr handling of health food department.
Disc: not invested in Shaily at any point of time. I have very limited understanding of shaily business model as well as overall equity investing.
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Shaily Engineering Plastics Ltd -
Q2 FY 25 results and concall highlights -
Revenues - 192 vs 157 cr, up 22 pc
Gross margins @ 46.3 vs 37.9 pc ( up 8.4 pc !!! )
EBITDA - 41 vs 26 cr, up 56 pc ( margins @ 21.5 vs 16.9 pc, up 4.6 pc !!! )
PAT - 22 vs 11 cr ( doubled )
Sharp improvements in gross and EBITDA margins is due to steep improvement in sales in healthcare division which grew by 94 pc in Q2 on a YoY basis
Capacity utilisation across plants @ 42 vs 39 pc
Segment wise revenue breakup -
Consumer - 72 vs 80 pc
Healthcare - 20 vs 12 pc
Industrial - 8 vs 8 pc
Domestic : Exports revenue breakup @ 25:75 vs 27:73 in Q2 FY 24
Expecting healthcare segment revenues to grow to 25 pc of sales inside next 3 yrs ( vs 20 pc currently )
Revenues in consumer segment grew by 10 pc YoY. Have received orders for 2 new products from a big FMCG company in Q2
Have received new business from a marquee customer in the Industrial segment in Q2 ( its an automotive customer ). Revenues in the industrial segment grew by 30 pc YoY in Q2
Company expects their injectable pen volumes to double in H2 vs H1 ( pickup in volumes should start wef Dec 24 )
Teriparatide ( Osteoporosis drug ) launch is expected to first happen in EU wef Q4 FY 25 ( aprox ). US launch has been delayed
Liragludite launch should happen in Q2 or Q3 of FY 26
Semaglutide launch in RoW mkts like India, Brazil, Canada with company’s devices is expected to happen in H2 FY 26. Company is expected to expand their Semaglutide injectors capacity to > 25 million devices by H1 FY 27. Company believes, it should end up having a dominant mkt share in the generic Semaglutide devices in the RoW mkts
To sum up - Between Jan 25 - Mar 26 - company will launch Teriparatide, Liraglutide and Semaglitide in multiple geographies with multiple customers
Company’s capacity on Insulin pens is around 11 million pens. Looking to expand capacity to 25 million pens. This new - added capacity should come on stream in Q1 FY 27
On Tirzepatide - supply of exhibit batches should start in Q4 FY 25. Did not give any visibility on commercial launch
Current capacity of insulin Injectors @ 11 million. Company is adding another 24 million. So the total insulin capacity will reach 35 million. Semaglutide capacity should be another 35 million. All others put together should be another 25 - 30 million. So the total capacity should reach 100 million in next 36 months
Overall spend for all this capacity build up should be around 150-200 cr over next 36 months
Disc: holding, biased, not SEBI registered, not a buy / sell recommendation
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Do we have an idea of what the price could be per pen?
I remember one post mentioning Rs 60 for the Insulin Pen. Does pricing vary for the GLP1 pens, or will it be similar?
I’m just trying to calculate peak sales.
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For GLP -1 pens, it should be around Rs 200 / pen
For Insulin pens, I think it would be around Rs 50-60 / pen
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What is the source for this pricing of the glp-1 pen?
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To be frank, I was unable to find the same. I asked a few analysts ( over Wassup ) who were present on the company’s concall. They gave me this figure of Rs 200 / pen
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Plant visit notes from Investsec
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Found interesting article mentioning that GLP-1 can possibly be a serendipity drug for fighting alcohol/ opioid addiction but needs Phase 3 trial to conclude it on larger test data.
Snippet of an interesting para from the article is below:
Small clinical trials and larger studies of patients prescribed GLP-1s for other symptoms have shown promising results when it comes to addiction treatment. A 48-patient Phase II study on non-treatment-seeking people with alcohol-use disorder demonstrated a significant reduction in drinking. A report this year from Morgan Stanley concluded that more than half of people on GLP-1s reduced their alcohol intake, with about 16% quitting entirely. A paper published in the medical journal JAMA Network Open found that people taking Ozempic for diabetes were less likely to suffer from opiate overdoses, while another large retrospective study reported a 40% decrease in opioid overdoses and 50% fall in alcohol intoxication for GLP-1 patients.
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Came across this great write up on GLP 1 by Xponent. Covers the supply side in detail. Would recommend. Has said the following about Shaily.
Shaily Engineering stands out as India’s only major listed player in GLP-1 device
manufacturing. The company is pivoting from a crowded, low-ROCE moulding business
to a high-entry-barrier medical devices model. Shaily made history as the first to
develop plastic insulin pens and is now tapping into the GLP-1 generics opportunity
with its own IP platforms. According to the management, 70% of generic Semaglutide filers rely on Shaily’s device, as it is the only one globally that closely matches the
innovator’s reference device without infringing on patents.
We estimate margins in Shaily’s IP-driven pens could be more than twice its current
company level margins, transforming both ROCE and overall economics. However,
long-term success hinges on its customers securing approvals and on Shaily’s ability to
shift from high-volume manufacturing to a high-quality medical device business. The
company’s recent decision to expand capacity from 40 million to 100 million devices—
covering both diabetes and weight-loss treatments—reflects its optimism in this
evolving market.
https://drive.google.com/file/d/1Y95O-YayCF47C9frdtercKF4AZlHLR1l/view
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