Granules Notes
KSM & Freight rate stablising now. Sailing time to USA has doubled leading to higher inventory levels across the value chain.
PAP situation improved with the largest company in China coming back on stream in July and two domestic companies starting production in India. Leading to better prices for the company
Paracetamol capacity running at almost full capacity
DCDA (ksm for metformin) got PLI approval with a capacity of 8000 tonnes pa. Estimated investment 100crs, company expects a cost savings of 10crs along with supply security for the company. Company expects the capacity to become operational in 2 years time. To be used for captive consumption. Once the capacity is absorbed company will double the capacity and strat offering PFI and API to other companies
CMO services to start from oncology block
Setting up a fermentation lab with an investment of 75crs (20crs already deployed). Biotech acquisition was to bolster this capability.
Total capex for FY2023 & FY2024 will be 600cr. FY’22 capex was 400crs
MUPS block commercialisation has started with couple of products and various other products are at different stages of approval.
Paracetamol prices will go down in the future commensurate with the fall in PAP prices. Margins will be maintained.
EBITDA to improve Q-o-Q on the back of volume growth.
Non core compounds have grown from 17% last year to 18% of total sales. Company will start to look at cost optimisation.
Long term debt is expected to be zero in 2-3years time. Total debt will fall this year even after the buyback. Expect positive build up of cash every quarter.
OCF of 180crs vs 75crs in Q1. FCF at 98crs (expect cash flows to improve further).
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