@hitesh2710 bhai,

Can you share your views on Glenmark Life science (GLS)?

The company was listed two years back and haven’t crossed the IPO price yet. However, after making a low of around 360 in March 2023, the stock has run up close to 70% in 3-4 months. Results of last two quarters have been really good for both generic API and CDMO division of their business. They have been reporting good and consistent margins around 30% and with falling raw material prices the management is confident of maintaining the margins at least for this year.

Even after the recent run up the stock seems to be reasonably priced with Mcap/sales around 3 and PE around 16. Parent company Glenmark pharma is in talks with investor to sell their holdings.

Appreciate if you can share your views.

Regards,
Suhag

After the bull run of 2023
This is the long term portfolio of ASK

Thankful for the detailed analysis and notes mentioned above. Had done a small analysis on various hospitals during Yatharth’s IPO.
Considering the run-up of various hospitals, Kovai is the only one that seems reasonably priced. Indraprastha is stuck in legal issues considering their agreement with Delhi govt. for providing free-of-cost treatment in lieu of lease of hospital land.

Note: Data is from early Aug for other hospitals

The only issues I can see are:

1. The company doesn’t seem to have geographical expansion plans. It’s a good stable business that appears to be undervalued but no amazing story
2. Medical college is impacting PAT margins and the company has high interest costs
3. Lack of institutional interest and low market vol. depth
4. The Google reviews (not sure how reliable they are) are not favourable. Usually they’re above 4 for major hospitals in most cities, see Royal Care is 4.3. This might impact patient inflow
5. Lack of medical tourism, which is a very high margin business for most hospitals. They don’t have MTQUA certification (only NABH) which Sri Ramakrishna Hospital in Coimbatore has
6. From annual report, their Inpatient nos. increased 25% while revenue only increased 5% (decrease in ARPOB) which they need to pass on

Pros:

1. Promoter holding has increased this quarter
2. Cheaper valuation (P/E, EV to EBITDA, CFO to EBITDA) compared to other hospitals (see KIMS) considering the no. of beds and strong brand image (as per their AGM and comments from people above)
3. As mentioned above, they
4. Most of Coimbatore population is in urban areas and it is growing at 2.65% rate per annum (same as Delhi)
5. In Tamil Nadu, IPD per 1000 is double that of India, implying people are more inclined towards hospitalization services in the state

Happy to get feedback, insights from other people

Disc: Invested and averaging down

Q2- 2024…investor presentattion

1…The US and UK economies have shown signs of improvement; inflationary pressures are gradually easing. However,
cautious consumption patterns persist due to precautionary measures. Meanwhile, Europe remains a point of
concern. Overall, the order book has improved and should result in positive impact on revenues from hereon

2…Destocking of Inventory in the
channel led to lower revenue
in FY23 compared to FY22

3…We are currently experiencing delays in machinery procurement, which has affected the timeline for commercializing the
first phase of the appliance
division. We now estimate this to take place in early H2FY24.

4…Looking towards our long-term goal, we aim to achieve Rs. 1,000 cr. in revenue by FY25. In addition to our strong position
in quartz sinks, we believe that steel sinks and the appliance division will play vital roles in accomplishing this objective.”

5…Commercial production of additional steel sinks capacity, commenced in July’23, bringing the total capacity to
1,80,000 units P.A

6…Acquisition of 43,379 sq. mt. additional land in Bhavnagar, Gujarat for Rs. ~9.07 cr for future expansion & new
projects if any

7…q1 2024
45%@Quartz sinks
30% appliances
11% steel sinks

8…We have expanded to
newer geographies –
Australia, New Zealand,
Gulf countries, Southeast
Asia, China, Singapore,
Turkey, Vietnam
❖ Witnessing huge traction in
business from these
geographies

9…Acqusiition and cross selling opportunity

•The acquisition of 100% stake in a
distribution company : Homestyle
Product Limited, in UK which outsources
sinks and sells to the top customers
• Another acquisition in UK : Tickford
Orange Limited, holding company of its
operating subsidiary ’Sylmar
Technology’. Leading player in UK solid
surface market
• Tap Factory acquisition.
• Vital access to key customers based in
markets in Europe and UK
• Current Domestic Market : 3200+
Dealers, 85 Galleries & 82 distributors

10…FUTURE GROWTH DRIVER

A…Strong Distribution Network

Strengthen the Distribution network by tie up with Homestyle and STL, UK and
plan to add new 100 galleries and 34 more distributor and increased dealer
network to 3200+ dealers in Q1FY24

B…Branding
Focused on capturing the Brand Mindspace of niche Consumers

C…New products

Entry into the kitchen appliances and bathware market with innovation, R&D and design
capabilities – Aim to become a major player

D…Export
Currently catering to 55+ countries strive to spread the wings to 70 countries in
next three years by exploring the uncatered geographies

E…Technology
… Only Quartz Sink Company
Only company in India and amongst the 4 global players manufacturing Quartz
Sinks

Disc…invested