ValuePickr Forum

Vaccine Beneficiaries - Direct and Proxy Plays

With the vaccine coming; I was tracking potential beneficiaries who might be having a once-in-a-lifetime opportunity for them (and preferably for us also) in case we are able to scoop them up.

Potential beneficiaries include

  1. Vaccine makers
  2. Glass Vial makers
  3. Syringe Makers
  4. Cold chain storage
  5. Distribution/last mile delivery
  6. PPE kits / disposal kits for vaccinations

A lot of these companies are private limited companies like Serum Institute, Scott Kaisha, Gerresheimer, Hindustan Syringes and Medical Devices.

One major proxy play could be Borosil which makes the glass used for vials (run up from 30 levels to 272 today in less than 10 months) and Piramal (Glass).

Any learned members or expert in this field who has more information and can guide better.

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Borosil Ltd. (https://www.moneycontrol.com/india/stockpricequote/glassglass-products/borosillimited/BL04) makes glass, that may be used for vaccine vials, I am not sure though. According to this ET Prime article, there are mainly 6 vial makers in the world, and Borosil Ltd. isn’t one of them - https://economictimes.indiatimes.com/prime/pharma-and-healthcare/2021-is-all-about-vaccine-transportation-piramal-schott-kaisha-are-ready-with-sturdy-vials/primearticleshow/79592510.cms

Borosil Renewables is the one you’re referring to that’s run up from 30 to 272 in 10 months. They’re a related company to Borosil Ltd, but only make solar glass for solar modules.

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Borosil Limited is probably the 2nd or 3rd largest vial / ampoule manufacturer in India - they acquired a company called Klasspack a few years ago that was doing this. As per their last quarterly call they have nearly sold out their capacity. In their last quarter call CEO said - ‘We have about 300 million vials as annual capacity and about 500 million ampoules as annual capacity and at the present moment Klasspack would be operating close to 55%, 60% capacity utilization. But on the vial side specially, I think we expect that our capacity will get sold out very shortly. In fact, the discussions are on for large volumes.’ They are considering further volume expansion. You can find this at https://www.borosil.com/investors/borosil-glass-works/ under Corporate Announcements and transcript of Nov-20.

While this is all positive for the company I would urge fellow investors to assess for themselves how much of this is already in the price. Please note that Klasspack is part of the Scientific Products division of Borosil (other division is Consumer which sells kitchen appliances, glassware, Larah etc). For FY2020, Klasspack contributed 7% of total revenues and 3.3% of total EBITDA. You could make your own assumptions as to how this might drive upside for the business.

Disc: Am invested and find the business has a lot of prospects beyond just the short term excitement on vials - but am likely to be biased

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