I’ve been tracking this stock for the last few months. I see a huge potential in the bank as per my understanding. The numbers are fantastic and so is the management. They are candid about their guidance and have almost achieved what they said 5 years ago. I don’t see any problem in the bank as of now. I think the stock price will be 5-6x in the next 5 years(because of the Guidance 2.0). Am I missing something? I am a newbie (Started my journey 3 years ago). This is my fifth company.

Disc:- I’ve invested in the stock around 81-82 levels

Dr Reddy –
Q4 and FY 24 results and concall highlights –

Q4 outcomes –

Revenues – 7083 vs 6315 cr
Gross margins @ 58.5 vs 57.2 pc
EBITDA – 1872 vs 1534 cr ( margins @ 26 vs 24 pc YoY )
R&D expenses @ 687 cr ( @ 9.7 pc of sales – very healthy run rate )
PAT – 1307 vs 960 cr

Segment wise sales breakup –

North America – 3262 vs 2532 cr, up 29 pc

Europe – 520 vs 496 cr, up 5 pc

India – 1126 vs 1283 cr, down 12 pc ( due to divestment of certain brands in Q4 LY, adjusted for that – India business growth was a strong 17 pc )

Emerging Mkts – 1209 vs 1114 cr, up 9 pc

APIs + Pharmaceutical services – 821 vs 778 cr , up 6 pc

Entered into an agreement with Sanofi to market and distribute vaccine brands in India

Partnered with Bayer to distribute their heart – failure management brand in India – Vericiguat

Acquired – Menolabs. It has a well developed Women’s health and dietary supplements product portfolio in US ( has a portfolio of 7 branded products )

Entered consumer heath mkt in UK with the launch of allergy medicine – Histallay

Launched Bevacizumab – Dr Reddy’s first bio similar in UK

Launched – Nerivio – wearable migraine management device in Germany, SA

Strong growth in US business in FY 24 led by – increased volumes in base business, integration of Mayne Portfolio ( an Australian generics company, was acquired by Dr Reddy’s in the last FY ), new launches – partially offset by price erosions

Launched a total of 13 branded products in India in FY 24

Higher R&D spends for Q4 and FY 24 directed towards company’s development efforts to develop – small molecules of greater complexity and Biosimilars

Surplus cash on books @ 6500 cr

Formed a JV with Nestle India to roll out nutraceutical products like – health supplements for women and kids, metabolic wellness, hospital wellness etc in India and certain other agreed markets

Dr Reddy’s rank is IPM is at no 10

Among EMs, Russian sales grew strongly at 17 pc YoY growth in FY 24

Expect R&D investments to be aggressive in FY 25 as well. Broad breakup of these spends towards chemical molecules, bio molecules, APIs is 60:20:20. The clinical trials of Biosimilars does consume significant R&D dollars

Expecting Brazil, China business to clock double digit growth in FY 25

Company’s capex is mainly focussed towards building additional API and Injectable facilities

Timeline for the launch of Company’s first Biosimilar in US remains at FY 27

60 pc of branded generics sold by the company in India are made in-house. This percentage should go up in future

Increase in inventory levels in Q4 is a deliberate step by the company to insulate themselves from geo-political tensions / supply disruptions

Confident of continuing the double digit growth in India branded mkt. This is a key focus area for the company. Company aims to be in top 5 companies in the domestic mkt by 2030

Disc: holding, biased, not SEBI registered

#Summary
1) Utilization at Nitrile Latex Plan at 50% in one month, the year avg is about 30% capacity, for the quarter 40-45%
2) There is demand for the product, but the realization are not worth it thus the plant utilization remains at low level. (MGMT doesn’t want to pursue low margin volume)
3) Synthetic Latex ; Taloja, expansion has gone well. Utilization there for the month was 65%; for the year it was 45%.
4) Nitrile Butadiene Rubber: plant are running at full capacity and also has seen significant imports. The margins still remain a challenge due to dumping from China.
5) If the mgmt does not see things changing in Nitrile Latex space, they will decide to move the capacity into production of other material.
6) The cost for swtching will not be significant. In the range of $1-$2 Mn Dollar.
7) Net Debt is around 70 crores – working capital + debt – cash with investments around 14 crore
8) In Nitrile Latex, destocking is still going at the user level.
9) Current Revenue Distribution : Latex- 66% and Rubber – 34% – From the previous revenue break up a few year ago of 50:50, the company now has higher revenue coming from latex.
10) Apcobuild: Still a small Portion and still good growth; growth around 18-20%. Still Insignificant in terms of contribution to revenue. The strategy is to go deeper in the same state, Gujurat, Nagpur, Maharashtra, Rajasthan
11) The space is very competitive, but also misunderstood. We are only focusing on polymers and products we are strong at like tile water proofing.

Overall, the situation in Nitrile Latex still remains dire with no relief in near term. The company has done good in term of increasing their volume in such a scenario. If the Demand Supply mismatch tapers down in the coming quarters, the realization should be much better.

She owned Ujjiwan financial services, got the shares in Reverse merger

Disclosure : added more shares of Sirca for long term retirement. Previous investment :- 37000 Additional purchase : 5000 Total investment 42,000 roughly total shares 138 shares

i am not sebi registered analyst , please do own research before investing, above buying are biased opinion , as i am already investor in sirca