*Eicher Motors April 2021 Sales – Marginally below expectations*
(Nirmal Bang Retail Research)
Motorcycles (Royal Enfield) came at 53298 units vs expectation of 56333 units, YoY 91 units (58469%) and MoM 66058 units (-19%)
Sales were down 15% compared to April 2019 volumes of 62879


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*Hero Motocorp April 2021 Sales – Below Expectations*
(Nirmal Bang Retail Research)
2 Wheelers came at 372285 units vs expectation of 456667 units, YoY 0 units and MoM 576957 units (-35%)
Sales were down 35% compared to April 2019 volumes of 574366
Hero MotoCorp had proactively halted the plant operations temporarily in a staggered manner for four days from April 22-May 1, in view of the rapid escalation in the spread of Covid-19. Co has now decided to extend the shutdown till 9th May.


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*Ashok Leyland April 2021 Sales – Below Expectations*
(Nirmal Bang Retail Research)
Total Sales came at 8340 units vs expectation of 12117 units, YoY 0 units and MoM 17231 units (-52%)
Sales were down 39% compared to April 2019 volumes of 13626


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*VST Tillers Tractors April 2021 Sales - Improved*
(Nirmal Bang Retail Research)
Total Sales came at 2179 vs YoY 1089 units (100%) and MoM 3787 units (-42%)
Sales increased by 202% compared to April 2019 volumes of 721 units


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*Ajanta Pharma – Q4FY21 Concall – Nirmal Bang Sec.
*Outlook – Positive*

The stock is trading at 21.8xFY22E consensus earnings


The company arranged its maiden concall for the quarter. The company witnessed 11% sales growth for the quarter driven by growth across markets except branded generics in emerging markets which was impacted due to supplies issues, which is expected to normalise soon. Ajanta witnessed improvement in gross margins to 78% against 75% in FY20 due to favourable product mix. The management sounded confident of maintaining current levels for future except some inflation on API cost. Other expenses have normalised in 2H (vs lower in 1H on account of limited field activities) and likely to remain in the same range for future. EBITDA margins have improved to 34% during Q4 vs 22% last year and 32% in Q3. For FY22, the management is hopeful of maintaining the margins barring slight increase in R&D cost which is likely to improve to 6% of sales from currently 5%. Last year due to lockdown the industry lost 5-6 months in terms of activity, hence ANDA filings were less, however it is likely to pick up in current year and the management is targeting 10-12 filings. The company has done capex of Rs 155 cr in FY20 and has guided for Rs 250 cr in FY22 mainly on maintenance, on new corporate office and some expansions in the facility. Its balance sheet continues to remain healthy with cash and equivalents of Rs 375 cr and zero debt. During the year the company has witnessed improvement in receivables however inventory levels have moved up which according to company is a conscious decision to streamline the supply issues.


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*Laurus Labs – Q4FY21 Concall Update – Nirmal Bang Sec.*
*Outlook – Positive*
_The management is targeting $1bn sales by FY23, implying 24% CAGR. In addition, the company has earmarked Rs 1500-1700 cr capex over two years for growth beyond these years. This shows management’s confidence and conviction towards the demand and revenue visibility_
The stock is trading at 17x FY23E on our earnings

• FY21 – done exceptional well; Q4 revenues at Rs 1412 cr grew by 68% yoy;
• Due to better product mix gross margins improved significantly to 55%
• Done capex of Rs 700 cr in FY21 (50% in API, 30% in FDs, 20% in CRAMS & Bio)
• *Capex for FY22 and 23 - Total 1500-1700 cr capex for next 2 yrs* (addition of ~Rs 500 cr from last guidance) – 50% in APIs, 25% FDs and 25% in Custom Synthesis - *mostly from the internal accurals*
• Likely to maintain R&D expense of 4% of sales for FY22
• *Don’t need more capex to reach the aspirational sales tgt of $1bn by FY23E*
• *Confident of maintain 30% EBITDA margins for FY22*
• ATR is 1.5x
• Most of the capex is brownfield hence the impact of bottom-line won’t be so much
• *_Formulations – Q4FY21 revenues of Rs 430 cr_*
o Recently got approval for triple combination anti-retroviral combo drug containing Tenofovir Alafenamide; *expect to service this order in 1HFY22* - it has $10 mn opportunity this year however next year it could be big
o Seeing growth in developed markets
o Commenced mktg of in-licensed products, out of 5 products 2 are launched and remaining would be done in next 6 months
o In US, the company has a total of 9 final approvals and 8 tentative approvals, out of the 26 ANDAs filed
o In Canada, it has 8 approvals and 4 launched and2 would be launched soon
o In EU, 2 additional products have been validated as part of CDMO expansion – expect significant upside in FY23; also got approvals for 5 products, 2 are launched and the company is in the process of launching others shortly
o Ongoing Brownfield expansion would be operational by Oct’21 in phase manner and would be fully operational by end of FY21
o Debottlenecking of facilities was done in March and commercialised in April; * Expect strong traction in FDs in 2H once the new facility commercialised in Oct*
o TLE 400 market opportunity is $120-150mn and has 3 players. TLE 600 market is very small

• *_APIs – Rs 797 cr revenues_*
o ARVs done very well; *Expect good ARV API sales in FY22 as well*
o Due to increase in demand for third-party APIs, the company is expanding API capacity
o Onco - Creating dedicated block for Non-ARV APIs including expansion for High Potent capacity at Unit 4, *expect onco business to grow fairly well in coming quarters as well*
o Big jump on other API sales in FY23, though partly in FY22 as well on the back of on-going capex

• *_Synthesis – Rev of Rs 176 cr_*
o Laurus is pursuing several active projects in the late-stage clinical programs, as well as the commercial supplies of four products, which are ongoing.
o By FY23, the division would be self-reliant in all aspects

• *_Bio_*
o Completed the acquisition in Jan’21
o Laurus Bio is on the course of commissioning a large-scale fermentation capability, 180,000 liters in the next two weeks and also planning to acquire additional land for further expansion by creating close to a 1 mn liters of fermentation capacity.
o Rs 60 cr capex in FY22E (including in above capex guidance) – for 180,000 litres – for additional capacity, would need more capex
o Current owners would continue to run the operations
o *The division is likely to double the revenues in FY22*


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*Central Depository Services (India) Ltd.* | *CMP* Rs. 810 | *M Cap* Rs. 8465 Cr | *52 W H/L* 827/211
(Nirmal Bang Retail Research)
*Result ahead of expectation*
Revenue from Operations came at Rs. 103.1 Cr (19.7% QoQ, 72.1% YoY) vs expectation of Rs. 90.7 Cr, QoQ Rs. 86.1 Cr, YoY Rs. 59.9 Cr
EBIDTA came at Rs. 63.4 Cr (13.2% QoQ, 145.7% YoY) vs expectation of Rs. 57.3 Cr, QoQ Rs. 56 Cr, YoY Rs. 25.8 Cr
EBITDA Margin came at 61.5% vs expectation of 63.2%, QoQ 65%, YoY 43.1%
Adj. PAT came at Rs. 51.7 Cr vs expectation of Rs. 52.6 Cr, QoQ Rs. 53.7 Cr, YoY Rs. 28.6 Cr
Quarter EPS is Rs. 5
Share is trading at P/E of 43.2x FY22E EPS


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Andhra Pradesh Pollution Control Board (AP PCB) on  Saturday  ordered immediate closure of plants belonging to Amara Raja Batteries Limited (ARBL) at Karkambadi and Nunegundlapalli villages in Chittoor district.
The board attributed closure orders to severe pollution caused by ARBL plants in the surrounding villages. Negative


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