Thank you for sharing this new product of Stylam.

Countertop material decision is driven by use-case and price difference between the alternatives.

Quartz really made its inroads and started replacing granite on a bigger scale when the designs of Quartz started matching and improving that of natural granite while the pricing difference also came to a level where user was ready to pay up for that upgrade. Long time ago price difference between granite and quartz was so huge that Quartz was considered a luxury countertop.

This acrylic solid surface product might find its applications in hotels (extended stays), rental properties, apartment complexes, hospitals, businesses, etc. I don’t think it can make inroads in residential houses which are mid grade and above.

One needs to dig through the price difference between laminate solid surface, acrylic solid surface, quartz, and granite to better understand the value migration and size of opportunity.

Once we understand the price difference (including final application project cost), only then we can have a view on what level of impact it can have on Pokarna, Acrysil type of businesses.

Aarti Pharmalabs – ( extremely bullish commentary wrt medium to long term ) –

Q4 and FY 24 results and concall highlights –

Manufacturing footprint –

Atali – New Unit under construction for CDMO, making Intermediates

Dombivali – Unit -1 – APIs, Intermediates, CDMO

VAPI – Unit -2 – APIs, Intermediates, CDMO

Tarapur – Unit -3 – Xanthine Unit
Unit -4 – APIs, CDMO
Unit -5 – Xanthine Unit
Unit – 6 – Xanthine intermediates and allied products

Segment wise revenues breakup in Q4 –

Xanthine, its derivates and allied products – 44 pc vs 50 pc YoY

API and Intermediates – 37 vs 43 pc YoY

CDMO / CMO – 19 vs 6 pc ( that’s a huge jump )

Aarti Pharma labs is the largest manufacturer of Xanthine, Caffeine ( a Xanthine derivative ) in India. Aarti Pharma’s global mkt share in Xanthine and derivatives is > 15 pc

Other Xanthine derivates are used as mild stimulants and bronchodilators ( for management of Asthma and Influenza )

Aarti Pharmalabs is a key beneficiary of China +1 wrt all its business segments

Most of the APIs that the company makes have a good degree of backward integration giving them good control over the entire value chain

Domestic : International sales breakup for FY 24 @ 56:44. Out of the total international sales, aprox 80 pc are to the regulated Mkts ( a great indicator of organisations’s compliance and quality culture )

In their CDMO business, they are currently working on 16 innovator molecules in various stages of development

Aim to grow topline by an avg of 10-15 pc for next 3 yrs

FY 24 outcomes –

Revenues – 1852 vs 1945 cr
EBITDA – 386 vs 342 cr
PAT – 216 vs 193

Net Debt / Equity @ 0.14 vs 0.13 pc
RoCE – 18 pc
RoE – 14 pc

Q4 outcomes –

Revenues – 505 vs 448 cr
EBITDA – 117 vs 80, up 47 pc ( margins @ 23 vs 17 pc )
PAT – 65 vs 42 cr, up 53 pc

Company’s API business has a greater focus towards regulated mkts. Their key therapeutic areas include – Anti-Hypertensive, Ant-Diabetic and Oncology drugs

Company is going to undertake brownfield expansion for capacity addition of the Xanthene and derivatives. Aim to take the total capacity up to 750 MT/ Month by end of FY 25. Current capacity is around 425 MT/ Month – so that’s a substantial jump

Guiding for a 10-12 pc EBITDA growth in FY 25. Management admitted that its a conservative guidance since the company did have exceptionally good q4

CMO / CDMO is likely to remain a high growth area for the company for next 2-3 yrs.Should grow @ > 30-35 CAGR for next 2-3 yrs. CMO/CDMO business is margin accretive for the company

Current capacity utilisation of the Xanthene plants @ 90 pc, hence the brownfield expansion

Company believes that the Xanthene prices have bottomed out. Should only go higher from here

FY 25 is going to be a Capex heavy year. Company may end up spending to the tune of 600 cr for the brownfield Capex for Xanthene + plus the ongoing projects projects @ Atali ( that’s a lot of Capacity addition )

Most of the company’s CMO business is concentrated on supply of KSMs ( key starting products ) / RSMs ( regulated starting materials )

Breakup of capex for FY 25 –

Aprox 300 cr for ongoing expansion @ Atali

80-90 cr for Solar power projects ( for future savings on the energy costs. Post this, 1/3rd of company’s power requirements shall be met internally )

Rest for brownfield expansion for Xanthene and other small capexes at various locations

Company is confident of achieving ideal capacity utilisation on the expanded Xanthene capacities inside 2-3 yrs !!! ( this should result in a lot of growth )

Tax rate for FY 24 for the company was 28 pc. Should be around of 25 pc for FY 25

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

Aarti Pharmalabs – ( extremely bullish commentary wrt medium to long term ) –

Q4 and FY 24 results and concall highlights –

Manufacturing footprint –

Atali – New Unit under construction for CDMO, making Intermediates

Dombivali – Unit -1 – APIs, Intermediates, CDMO

VAPI – Unit -2 – APIs, Intermediates, CDMO

Tarapur – Unit -3 – Xanthine Unit
Unit -4 – APIs, CDMO
Unit -5 – Xanthine Unit
Unit – 6 – Xanthine intermediates and allied products

Segment wise revenues breakup in Q4 –

Xanthine, its derivates and allied products – 44 pc vs 50 pc YoY

API and Intermediates – 37 vs 43 pc YoY

CDMO / CMO – 19 vs 6 pc ( that’s a huge jump )

Aarti Pharma labs is the largest manufacturer of Xanthine, Caffeine ( a Xanthine derivative ) in India. Aarti Pharma’s global mkt share in Xanthine and derivatives is > 15 pc

Other Xanthine derivates are used as mild stimulants and bronchodilators ( for management of Asthma and Influenza )

Aarti Pharmalabs is a key beneficiary of China +1 wrt all its business segments

Most of the APIs that the company makes have a good degree of backward integration giving them good control over the entire value chain

Domestic : International sales breakup for FY 24 @ 56:44. Out of the total international sales, aprox 80 pc are to the regulated Mkts ( a great indicator of organisations’s compliance and quality culture )

In their CDMO business, they are currently working on 16 innovator molecules in various stages of development

Aim to grow topline by an avg of 10-15 pc for next 3 yrs

FY 24 outcomes –

Revenues – 1852 vs 1945 cr
EBITDA – 386 vs 342 cr
PAT – 216 vs 193

Net Debt / Equity @ 0.14 vs 0.13 pc
RoCE – 18 pc
RoE – 14 pc

Q4 outcomes –

Revenues – 505 vs 448 cr
EBITDA – 117 vs 80, up 47 pc ( margins @ 23 vs 17 pc )
PAT – 65 vs 42 cr, up 53 pc

Company’s API business has a greater focus towards regulated mkts. Their key therapeutic areas include – Anti-Hypertensive, Ant-Diabetic and Oncology drugs

Company is going to undertake brownfield expansion for capacity addition of the Xanthene and derivatives. Aim to take the total capacity up to 750 MT/ Month by end of FY 25. Current capacity is around 425 MT/ Month – so that’s a substantial jump

Guiding for a 10-12 pc EBITDA growth in FY 25. Management admitted that its a conservative guidance since the company did have exceptionally good q4

CMO / CDMO is likely to remain a high growth area for the company for next 2-3 yrs.Should grow @ > 30-35 CAGR for next 2-3 yrs. CMO/CDMO business is margin accretive for the company

Current capacity utilisation of the Xanthene plants @ 90 pc, hence the brownfield expansion

Company believes that the Xanthene prices have bottomed out. Should only go higher from here

FY 25 is going to be a Capex heavy year. Company may end up spending to the tune of 600 cr for the brownfield Capex for Xanthene + plus the ongoing projects projects @ Atali ( that’s a lot of Capacity addition )

Most of the company’s CMO business is concentrated on supply of KSMs ( key starting products ) / RSMs ( regulated starting materials )

Breakup of capex for FY 25 –

Aprox 300 cr for ongoing expansion @ Atali

80-90 cr for Solar power projects ( for future savings on the energy costs. Post this, 1/3rd of company’s power requirements shall be met internally )

Rest for brownfield expansion for Xanthene and other small capexes at various locations

Company is confident of achieving ideal capacity utilisation on the expanded Xanthene capacities inside 2-3 yrs !!! ( this should result in a lot of growth )

Tax rate for FY 24 for the company was 28 pc. Should be around of 25 pc for FY 25

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

Here are Volante’s financial statements from the last decade. The company has shown a consistently high CAGR; quality growth it has been.

Source: Tofler

Volante Financials v1.xlsx (13.7 KB)

Can RS Software deliver similar return ratios and growth if (big IF) and when the co starts firing on multiple product lines?