Q1FY23 notes :
Q1 is weaker quarter. Q1FY22(last year) was strong due to 2nd wave. FY22 had 15% for Covid, and 2/3rd was in H1.
Despite covid base flat performance.
Like to Like basis, YoY growth.
Demand scenario. Steady demand + huge inquiries.
New products in pipeline. Optimistic about demand going forward
Inflation + supply chain tensions margins margins : freight cost up.
GPM change in product mix impacts demand.
Taken price hikes. Will be seen in next 9months FY23.
Senior management hires in sales + other important functions + manpower for upcoming facilities : kept EE cost high
50k crores in export market (market size)
We are confident of market share in coming years in export share.
Marketing + distribution will involve in export
Panchala : Existing + new products. PCR/Cell culture new products demand seen in domestic/export
Amta : consolidate WH operations for cost saving. Backward integration for sterilization for captive consumption.
Q1FY23 : 29% export contri.
Q1FY23 : GP margin impacted to change in product mix, and some inflation.
Volume growth : 20-25% in FY23.
Q1FY23 : strong demand for non covid.
We are confident of performance in next 9M.
FY22 : 45-50 crores covid, 65% was in H1 (first 5-6 months).
Competition: raised 500 crores.
More investing happens in this industry, we will grow.
GPM in Q1 in line.
Mid to high 70s for full year.
Capex : Panchala : 500 crores (significant progress, going as per plan, in Q1)
Covid revenue includes domestic and export. Domestic would be higher. International : 99% is sea freighted.
We dont see slowdown in overall business.
We have order ready to dispatched, but still container shortage + will doesn’t let us bill.
Sequential basis : GPM Mid to late teens moving forward.
Volume growth : Domestic business, different SKUs, different SKUs. We sale from 10 paisa to 5lac of FG, cant compare on volume basis.
Prices continue to remain stable. We have not yet received price hikes. In coming years, realisation will start to show up.
On 500 crores capex : Approx 250 crores panchla, 100 crore Amta, remaining for existing plant.
30% base business growth if we exclude covid business.
9M looks strong.
Q2 will have base business impact.
We cant take price increases. Things are volatile. Q2 we will see price hikes.
Q1 margin impact (old prices with increased price inputs+ spent on EE cost, new people in RD, senior level production people, distrubution promotional activities, marketing activities).
9M : revenue growth will be normalized + price hikes + maintain margins 46-50%
We hope to maintain FY24 500 crores target.
Also PCR well received. In market.
Cell culture products in panchala so not yet produced.
Q1 historically seasonal slowest out of 4. Q4 strongest. Most of business, towards year end, distributor buying larger quantities to complete targets, consumers buy larger to complete their budgets.
We dont increase price on quarterly basis. Most of times increase price annually.
We have taken price hikes from April 1. Price increase will be implemented from Q2 onwards. Cost from April has remain flat. At this point, input cost remain stable.
Mid to late 40s EBITDA margin guidance.
Capex on production : additional capacities on stream : June 2023. Global part shortage, semi conductor shortage which we need for automation will be a breaker.
3-4 years 100% ramp up based on past history.
We are on time for capex.
Inventory days : around 3 months since we have 1700 SKUs. Depends on product mix.
Post our capex : 15 years useful life. RBM 18% depreciation, 200 crores (L&B incur different depreciation).
FY25 : 500 crores intact.
Demand for PCR has been very strong after pandemic, it was product developed after pandemic
Cell culture : pandemic not functioning at full potential.
From base of 0, we are confident.
There are enough domestic manufacturers. Quality parameters are stringent. Elimating imports will be impossible. MNCs have unique products and hence cant be 0.
Ramping up revenues in panchala and Amta will take it beyond 500 when at potential fully.
We are hiring now for new facility. People need to trained before time.
Covid : 20% in FY21, 15% in FY22.
Filter pipet tips was also driven due to Covid business.
PCR half a billion dollar global market. We see significant potential. PCR was not created for covid. It was for lifesciences industry.
We started PCR capex in 2019 and Covid was in 2020. So we were preparing already for PCR product.
Q2 will have some high base.
Import prices increased, inputs : plastic resins. Not crude dependent. They come from Europe and US. Europe seeing price increases due to tough macros.
We need high quality resins which come from Europe and US.
Customers we cater to, we cant cater with local resins.
Subscribe To Our Free Newsletter |