Suven pharma
Key conference call takeaways
* Second Covid wave impact higher than last time o 15-20% personnel affected directly or indirectly
* Logistic challenges and container availability was impacted
* Some RM prices went up 4-5x as oxygen availability was impacted
* Situation is expected to improve, going ahead, with better traction unless a third Covid wave disrupts operations
* Gross margins should not be compared on a quarterly basis but on annual basis
* Manufacturing costs higher in Q4 due to product mix
* Planned capex of | 600 crore delayed, to start from Q2FY22
* Guidance for FY22: topline growth of 10-15%
* CRAMS Pharma: 10-15%, CRAMS specialty chemicals: 5%, formulations – 10-20%
* Margins to be maintained between 35% and 40% minimum
* Products: Six approved, five commercialised as of FY21, one ANDA commercialised in Q1FY22
* six more filed with some to be approved in FY22, to file 5-6 in FY22.
Key conference call takeaways
* Second Covid wave impact higher than last time o 15-20% personnel affected directly or indirectly
* Logistic challenges and container availability was impacted
* Some RM prices went up 4-5x as oxygen availability was impacted
* Situation is expected to improve, going ahead, with better traction unless a third Covid wave disrupts operations
* Gross margins should not be compared on a quarterly basis but on annual basis
* Manufacturing costs higher in Q4 due to product mix
* Planned capex of | 600 crore delayed, to start from Q2FY22
* Guidance for FY22: topline growth of 10-15%
* CRAMS Pharma: 10-15%, CRAMS specialty chemicals: 5%, formulations – 10-20%
* Margins to be maintained between 35% and 40% minimum
* Products: Six approved, five commercialised as of FY21, one ANDA commercialised in Q1FY22
* six more filed with some to be approved in FY22, to file 5-6 in FY22.
Strides
Highlights from the management commentary
* With US sales of USD215m in FY21, STR remains confident of achieving annual sales of USD400m over the next three years. There could be nearterm hiccups on account of the ongoing pandemic.
* Stelis Biopharma (Stelis) has started validation of batches, which should conclude by Jun’21. It expects to launch the Sputnik V vaccine by Oct’21. Typically the validation-to-commercial batch scale is 1:10x.
* The funds raised at the Stelis level (USD125m) would be utilized for last mile capex related to the CDMO business, including setting up a 6KL mammalian block, and ramping up of process development and other technical capabilities. The usage of funds would be completed in FY22.
* STR holds 33% stake in Stelis post completion of the Series C funding.
* It witnessed a considerable QoQ increase in opex (INR1.3b) in 4QFY21 due to rise in freight cost and supply disruption on account of COVID-19.
Highlights from the management commentary
* With US sales of USD215m in FY21, STR remains confident of achieving annual sales of USD400m over the next three years. There could be nearterm hiccups on account of the ongoing pandemic.
* Stelis Biopharma (Stelis) has started validation of batches, which should conclude by Jun’21. It expects to launch the Sputnik V vaccine by Oct’21. Typically the validation-to-commercial batch scale is 1:10x.
* The funds raised at the Stelis level (USD125m) would be utilized for last mile capex related to the CDMO business, including setting up a 6KL mammalian block, and ramping up of process development and other technical capabilities. The usage of funds would be completed in FY22.
* STR holds 33% stake in Stelis post completion of the Series C funding.
* It witnessed a considerable QoQ increase in opex (INR1.3b) in 4QFY21 due to rise in freight cost and supply disruption on account of COVID-19.
Cadila healthcare
Highlights from the management commentary
* CDH expects NDA filing of Saroglitazar Mg for PBC indication in the US by CY23-end.
* It submitted Phase 2b application of Saroglitazar Mg to the USFDA for NASH indication (Non-Alcoholic Steatohepatitis).
* With respect to Desidustat, CDH has completed patient enrollment for Phase III trials in India for treatment of anemia in patients with Chronic Kidney Disease (CKD).
* One of the 505b2 products has a PDUFA goal date of Sep’21.
* The management expects to launch 30-35 products in the US in FY22.
Highlights from the management commentary
* CDH expects NDA filing of Saroglitazar Mg for PBC indication in the US by CY23-end.
* It submitted Phase 2b application of Saroglitazar Mg to the USFDA for NASH indication (Non-Alcoholic Steatohepatitis).
* With respect to Desidustat, CDH has completed patient enrollment for Phase III trials in India for treatment of anemia in patients with Chronic Kidney Disease (CKD).
* One of the 505b2 products has a PDUFA goal date of Sep’21.
* The management expects to launch 30-35 products in the US in FY22.
Page industries
Highlights from the management interaction
* A 4-5% price increase was taken in 4QFY21, which is slightly higher than usual, to combat the steep increase in yarn prices.
* It expects revenue in 1QFY21 to be affected by the ongoing lockdowns as most stores remain closed.
* The management has maintained its 21-22% EBITDA margin guidance.
* The company had 930 EBOs at the end of FY21, with ~180 new additions, including 38 exclusive outlets for Jockey Junior.
* Inventory of finished goods was much lower than usual due to strongerthan-expected demand in 4QFY21. Hence, end of period inventory days of 71 in FY21 may not be sustainable.
Highlights from the management interaction
* A 4-5% price increase was taken in 4QFY21, which is slightly higher than usual, to combat the steep increase in yarn prices.
* It expects revenue in 1QFY21 to be affected by the ongoing lockdowns as most stores remain closed.
* The management has maintained its 21-22% EBITDA margin guidance.
* The company had 930 EBOs at the end of FY21, with ~180 new additions, including 38 exclusive outlets for Jockey Junior.
* Inventory of finished goods was much lower than usual due to strongerthan-expected demand in 4QFY21. Hence, end of period inventory days of 71 in FY21 may not be sustainable.
Eicher motors
Highlights from management commentary
* RE demand remains strong on the back of a strong order book, expected pent-up demand, and a surge in export numbers. It has 2–3 months of order backlog, which would be catered to once the lockdowns are lifted. It expects to achieve 80k units/month in 2HFY22.
* RE has a very exciting pipeline of new products, with FY22 having the highest ever number of model launches.
* RE has reduced rhodium consumption by 66%; however, the benefit of this would be reflected in the coming quarters.
* RE added a total of 535 stores, including main stores (>100 stores) and studio stores (>430 stores), in FY21, taking the total number of outlets to 2,056 across 1,750 cities (from 1200 cities). Network expansion in India is largely complete, except in one state.
Highlights from management commentary
* RE demand remains strong on the back of a strong order book, expected pent-up demand, and a surge in export numbers. It has 2–3 months of order backlog, which would be catered to once the lockdowns are lifted. It expects to achieve 80k units/month in 2HFY22.
* RE has a very exciting pipeline of new products, with FY22 having the highest ever number of model launches.
* RE has reduced rhodium consumption by 66%; however, the benefit of this would be reflected in the coming quarters.
* RE added a total of 535 stores, including main stores (>100 stores) and studio stores (>430 stores), in FY21, taking the total number of outlets to 2,056 across 1,750 cities (from 1200 cities). Network expansion in India is largely complete, except in one state.
Sun Pharma
Highlights from management commentary
* Global Specialty sales stood at USD139m for 4QFY21 v/s USD143m QoQ. The QoQ drop was attributable to increased buying at the end of the calendar year and the adverse impact of the pandemic situation.
* SUNP garnered global sales of USD143m from Illumya, up 51% YoY.
* SUNP remains on track to drive Illumya sales using a) the continuous involvement of opinion leaders, b) an expanding prescriber base, and c) better traction from existing patients.
* SUNP is building a Biosimilar portfolio for launch over CY28–30. We are yet to see clarity on the amount of investment needed for product development as well as building capacity.
Highlights from management commentary
* Global Specialty sales stood at USD139m for 4QFY21 v/s USD143m QoQ. The QoQ drop was attributable to increased buying at the end of the calendar year and the adverse impact of the pandemic situation.
* SUNP garnered global sales of USD143m from Illumya, up 51% YoY.
* SUNP remains on track to drive Illumya sales using a) the continuous involvement of opinion leaders, b) an expanding prescriber base, and c) better traction from existing patients.
* SUNP is building a Biosimilar portfolio for launch over CY28–30. We are yet to see clarity on the amount of investment needed for product development as well as building capacity.
ITC Vivel as part of its brand philosophy of Ab Samjhauta Nahin (No more compromises) introduced ‘Know Your Rights’ at college level across India, with the objective to change the collective consciousness of the youth through an increased perceptiveness on gender-sensitive issues; enabling gender-responsive actions at a personal level and building confidence through the knowledge of rights.
TVS Motor Company has launched its iQube Electric scooter. TVS iQube Electric is a green and connected, fun to ride urban scooter powered by an advanced electric drivetrain and next-gen TVS SmartXonnect platform. TVS iQube Electric is a blend of an advanced electric drivetrain and the next-gen TVS SmartXonnect platform.
TVS iQube Electric ecosystem is built around digital platforms that enable the customers to have the convenience of booking and paying for the vehicle online, along with getting assured contactless deliveries. TVS iQube Electric is equipped with a 4.4 kW electric motor to deliver high power and efficiency with no transmission loss. The scooter has a max speed of 78 kmph and traverses 75 kms with a full charge.
TVS iQube Electric ecosystem is built around digital platforms that enable the customers to have the convenience of booking and paying for the vehicle online, along with getting assured contactless deliveries. TVS iQube Electric is equipped with a 4.4 kW electric motor to deliver high power and efficiency with no transmission loss. The scooter has a max speed of 78 kmph and traverses 75 kms with a full charge.
Result Highlights
NMDC Ltd.: Net Revenue at Rs. 6847.6 crore, Rs. 3187.3 crore YoY, Rs. 4355.1 crore QoQ (+114.8% YoY, +57.2% QoQ). EBITDA at Rs. 4240.3 crore, Rs. 1487.7 crore YoY, Rs. 2766.8 crore QoQ (+185% YoY, +53.3% QoQ). EBITDA Margin at 61.9%, +1525 bps YoY and +-161 bps QoQ. Net Profit at Rs. 2834.7 crore, Rs. 316.2 crore YoY, Rs. 2158.2 crore QoQ (+796.6% YoY, +31.3% QoQ).
Bharat Electronics Ltd.: Net Revenue at Rs. 6917.5 crore, Rs. 5816.8 crore YoY, Rs. 2320.4 crore QoQ (+18.9% YoY, +198.1% QoQ). EBITDA at Rs. 1980.9 crore, Rs. 1494.0 crore YoY, Rs. 456.2 crore QoQ (+32.6% YoY, +334.2% QoQ). EBITDA Margin at 28.6%, +295 bps YoY and +897 bps QoQ. Net Profit at Rs. 1368.2 crore, Rs. 1047.0 crore YoY, Rs. 278.5 crore QoQ (+30.7% YoY, +391.3% QoQ). Ashika
ITI Ltd.: Net Revenue at Rs. 1266.3 crore, Rs. 650.5 crore YoY, Rs. 496.9 crore QoQ (+94.7% YoY, +154.9% QoQ). EBITDA at Rs. 179.2 crore, Rs. 69.5 crore YoY, Rs. 9.4 crore QoQ (+158% YoY, +1804.6% QoQ). EBITDA Margin at 14.2%, +347 bps YoY and +1226 bps QoQ. Net Profit at Rs. 201.3 crore, Rs. 33.1 crore YoY, Rs. -31.8 crore QoQ.
Avanti Feeds Ltd.: Net Revenue at Rs. 1098.1 crore, Rs. 1034.8 crore YoY, Rs. 915.4 crore QoQ (+6.1% YoY, +20% QoQ). EBITDA at Rs. 85.4 crore, Rs. 124.6 crore YoY, Rs. 92.2 crore QoQ (-31.5% YoY, -7.4% QoQ). EBITDA Margin at 7.8%, -426 bps YoY and -229 bps QoQ. Net Profit at Rs. 70.2 crore, Rs. 98.7 crore YoY, Rs. 86.2 crore QoQ (-28.9% YoY, -18.6% QoQ). Ashika
Sobha Ltd.: Net Revenue at Rs. 553.4 crore, Rs. 910.1 crore YoY, Rs. 684.4 crore QoQ (-39.2% YoY, -19.1% QoQ). EBITDA at Rs. 149.7 crore, Rs. 254.5 crore YoY, Rs. 178.6 crore QoQ (-41.2% YoY, -16.2% QoQ). EBITDA Margin at 27.1%, -91 bps YoY and 96 bps QoQ. Net Profit at Rs. 17.9 crore, Rs. 50.7 crore YoY, Rs. 21.6 crore QoQ (-64.7% YoY, -17.1% QoQ).
NMDC Ltd.: Net Revenue at Rs. 6847.6 crore, Rs. 3187.3 crore YoY, Rs. 4355.1 crore QoQ (+114.8% YoY, +57.2% QoQ). EBITDA at Rs. 4240.3 crore, Rs. 1487.7 crore YoY, Rs. 2766.8 crore QoQ (+185% YoY, +53.3% QoQ). EBITDA Margin at 61.9%, +1525 bps YoY and +-161 bps QoQ. Net Profit at Rs. 2834.7 crore, Rs. 316.2 crore YoY, Rs. 2158.2 crore QoQ (+796.6% YoY, +31.3% QoQ).
Bharat Electronics Ltd.: Net Revenue at Rs. 6917.5 crore, Rs. 5816.8 crore YoY, Rs. 2320.4 crore QoQ (+18.9% YoY, +198.1% QoQ). EBITDA at Rs. 1980.9 crore, Rs. 1494.0 crore YoY, Rs. 456.2 crore QoQ (+32.6% YoY, +334.2% QoQ). EBITDA Margin at 28.6%, +295 bps YoY and +897 bps QoQ. Net Profit at Rs. 1368.2 crore, Rs. 1047.0 crore YoY, Rs. 278.5 crore QoQ (+30.7% YoY, +391.3% QoQ). Ashika
ITI Ltd.: Net Revenue at Rs. 1266.3 crore, Rs. 650.5 crore YoY, Rs. 496.9 crore QoQ (+94.7% YoY, +154.9% QoQ). EBITDA at Rs. 179.2 crore, Rs. 69.5 crore YoY, Rs. 9.4 crore QoQ (+158% YoY, +1804.6% QoQ). EBITDA Margin at 14.2%, +347 bps YoY and +1226 bps QoQ. Net Profit at Rs. 201.3 crore, Rs. 33.1 crore YoY, Rs. -31.8 crore QoQ.
Avanti Feeds Ltd.: Net Revenue at Rs. 1098.1 crore, Rs. 1034.8 crore YoY, Rs. 915.4 crore QoQ (+6.1% YoY, +20% QoQ). EBITDA at Rs. 85.4 crore, Rs. 124.6 crore YoY, Rs. 92.2 crore QoQ (-31.5% YoY, -7.4% QoQ). EBITDA Margin at 7.8%, -426 bps YoY and -229 bps QoQ. Net Profit at Rs. 70.2 crore, Rs. 98.7 crore YoY, Rs. 86.2 crore QoQ (-28.9% YoY, -18.6% QoQ). Ashika
Sobha Ltd.: Net Revenue at Rs. 553.4 crore, Rs. 910.1 crore YoY, Rs. 684.4 crore QoQ (-39.2% YoY, -19.1% QoQ). EBITDA at Rs. 149.7 crore, Rs. 254.5 crore YoY, Rs. 178.6 crore QoQ (-41.2% YoY, -16.2% QoQ). EBITDA Margin at 27.1%, -91 bps YoY and 96 bps QoQ. Net Profit at Rs. 17.9 crore, Rs. 50.7 crore YoY, Rs. 21.6 crore QoQ (-64.7% YoY, -17.1% QoQ).
INVESTMENT THESIS
J.B. Chemicals & Pharmaceuticals Ltd (JBCP) is one of the fastest growing company in the IPM on the back of its brand and therapy focused strategy. Its strong domestic franchisee (>85% sales from 5 mega brands: Cilacar & Nicardia in Cardiac and Metrogyl & Rantac in Gastro-Intestinal) enjoy enormous brand equity which allows them to earn >35% EBITDA margins.
While unwinding of erst-while promoter’s transactions provide a permanent shift in base, EBITDA margins likely to be supported at the current levels on account to productivity improvements and renewed focus on CMO, US generics and Russia business.
We valued JBCP using SOTP based methodology; valuing Domestic franchisee at 7x FY23E EV/Sales and Exports business at 4x FY23E EV/Sales given their inherent quality. We thus initiate coverage on JBCP with BUY rating and target price of INR 2,000 which is ~33% upside on CMP. At our target price, JBCP is available at 26x FY23E PER; on the CMP JBCP trades at 20x FY23E PER.
JBCP to solidify base in leadership brands; growth to be driven by new areas
* JBCP has consistently outperformed the IPM on the back of its 5 mega brand groups contributing >85% of its domestic sales. JBCP has posted superior growth in these mega brands where it has >50% market share.
* With the new management in place post acquisition by KKR, as per us the growth will be led by higher MR productivity (10-12%), new therapys (Nephro & Pediateric divisions) and increased pace of launches in key chronic therapies.
EBITDA margins likely to sustain; War-chest ready for an inorganic acquisition
* Renewed focus on higher margins segments such as CMO, US generics and Russia business under the new management to be margin accretive, as per us improvements should be visible post H2FY22.
* Beyond productivity gains, there is a permanent shift in EBITDA margin base with unwinding of related party transactions (>200bps).
* JBCP’s positioning in terms of cash balances and current investments (INR 706crs for FY21), superior free cash flow generations (INR 350crs for FY22E) and lower debt levels give it significant war chest to pursue inorganic acquisitions
Superior execution in the domestic segment; deserving of higher multiples
* Dominant legacy brands in the domestic market ensures strong stream of cashflows enabling the high pedigree management to pursue new growth initiatives in CRAMs, US generics and Russia with renewed focus.
* Domestic franchisee (>85% from mega brands) enjoy enormous brand equity which allows them to earn >35% EBITDA margins. We believe it is deserving of much higher multiples, thus valuing at 7x FY23E EV/Sales while export business at 4x FY23E EV/Sales.
* We thus initiate coverage on JBCP with Buy rating and target price of INR 2,000 which is ~33% upside on CMP. At our target price, JBCP is available at 26x FY23E PER; on the CMP JBCP trades at 20x FY23E PER.
J.B. Chemicals & Pharmaceuticals Ltd (JBCP) is one of the fastest growing company in the IPM on the back of its brand and therapy focused strategy. Its strong domestic franchisee (>85% sales from 5 mega brands: Cilacar & Nicardia in Cardiac and Metrogyl & Rantac in Gastro-Intestinal) enjoy enormous brand equity which allows them to earn >35% EBITDA margins.
While unwinding of erst-while promoter’s transactions provide a permanent shift in base, EBITDA margins likely to be supported at the current levels on account to productivity improvements and renewed focus on CMO, US generics and Russia business.
We valued JBCP using SOTP based methodology; valuing Domestic franchisee at 7x FY23E EV/Sales and Exports business at 4x FY23E EV/Sales given their inherent quality. We thus initiate coverage on JBCP with BUY rating and target price of INR 2,000 which is ~33% upside on CMP. At our target price, JBCP is available at 26x FY23E PER; on the CMP JBCP trades at 20x FY23E PER.
JBCP to solidify base in leadership brands; growth to be driven by new areas
* JBCP has consistently outperformed the IPM on the back of its 5 mega brand groups contributing >85% of its domestic sales. JBCP has posted superior growth in these mega brands where it has >50% market share.
* With the new management in place post acquisition by KKR, as per us the growth will be led by higher MR productivity (10-12%), new therapys (Nephro & Pediateric divisions) and increased pace of launches in key chronic therapies.
EBITDA margins likely to sustain; War-chest ready for an inorganic acquisition
* Renewed focus on higher margins segments such as CMO, US generics and Russia business under the new management to be margin accretive, as per us improvements should be visible post H2FY22.
* Beyond productivity gains, there is a permanent shift in EBITDA margin base with unwinding of related party transactions (>200bps).
* JBCP’s positioning in terms of cash balances and current investments (INR 706crs for FY21), superior free cash flow generations (INR 350crs for FY22E) and lower debt levels give it significant war chest to pursue inorganic acquisitions
Superior execution in the domestic segment; deserving of higher multiples
* Dominant legacy brands in the domestic market ensures strong stream of cashflows enabling the high pedigree management to pursue new growth initiatives in CRAMs, US generics and Russia with renewed focus.
* Domestic franchisee (>85% from mega brands) enjoy enormous brand equity which allows them to earn >35% EBITDA margins. We believe it is deserving of much higher multiples, thus valuing at 7x FY23E EV/Sales while export business at 4x FY23E EV/Sales.
* We thus initiate coverage on JBCP with Buy rating and target price of INR 2,000 which is ~33% upside on CMP. At our target price, JBCP is available at 26x FY23E PER; on the CMP JBCP trades at 20x FY23E PER.
India Pesticides IPO:
APPLY FOR REASONABLE LISTING GAINS AND LONG TERM
Positives:
Experienced Promoters
Growth oriented company
Positive Cash flow despite regular capex
Debt free company
Reasonable valuations with 41% ROE
India Pesticides IPO:
Negatives:
Highly Competitive Business
Small size company
High dependency on China for raw materials
APPLY FOR REASONABLE LISTING GAINS AND LONG TERM
Positives:
Experienced Promoters
Growth oriented company
Positive Cash flow despite regular capex
Debt free company
Reasonable valuations with 41% ROE
India Pesticides IPO:
Negatives:
Highly Competitive Business
Small size company
High dependency on China for raw materials
Auro Lab 141❤️
New 52wk High
Got entry at 78 - 81 - 84 - 88 - 91
Average Buy is 84.4
New 52wk High
Got entry at 78 - 81 - 84 - 88 - 91
Average Buy is 84.4
Market Wizard
BUMPER MID TERM CALL BUY RAMA STEEL AT CMP OF 77 - 78 AND DIPS TILL 72 SL 69 TARGETS:- 80 - 81 - 82 - 83 - 84 - 85 - 86 - 87+ ABOVE 87 WE CAN SEE 91 - 97 - 104 - 111+ DISCLAIMER:- I am not SEBI Registered. Please consult your financial advisor before investing.…
RAMASTEEL 111.8❤️❤️❤️
UC LOCKED 😍🔒
UC LOCKED 😍🔒
Market Wizard
📊MARKET WIZARD 📢NEWSLETTER ISSUE 13 UPDATES 🎯Fundamental Stocks🎯 ▶️Lincoln Pharmaceuticals Ltd - 291.9 ▶️TV 18 Broadcast Ltd - 42.6 ▶️Triton Valves Ltd - 1080 ▶️Cerebra Integrated Technologies Ltd - 57 🎯Technical Stocks🎯 ▶️Agri-Tech (India) Ltd - 46.4…
SIMPLEX INFRA 45.5❤️❤️
UC LOCKED 😍🔒
UC LOCKED 😍🔒