On May 2022, management gave a guidance of 15% growth rate for overall pharma business.
But during July 2022, they said they don’t want to give guidance for 2023 because of overall volatility in the business & certain execution issues they need to fix first.
What made them to rethink the guidance?
-
Facing tough time in CDMO business. Some of the customers changed the phasing of orders. Orders are pushed into future.
-
Significant attrition at overseas sites. Finding right talent, filling up these vacancies &training them may take some time. These are critical positions.
- Higher operating costs, increase in raw material & packaging materials prices. (Inflationary situation in UK & USA)
They have many overseas facilities which make niche products & are essential facilities in their integrated services.
Sterile injectables – Lexington (USA)
HPAPI – Aurora & Riverview (USA)
ADC – Grangemouth (UK)
Complex oral solid dosage- UK & USA.
I reckon these facilities are facing
1.Attrition of critical talents & finding the replacements & training them may take some time & effort.
2.Higher operational costs due to highly inflationary situation in UK & USA.
3.Power crisis in Europe. Pharma manufacturing is highly power intensive & this may affect the margins.
Not a buy/sell recommendation.
Disclaimer: I dont own PPL.
| Subscribe To Our Free Newsletter |
