Natco Q2 Con Calls Highlights
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Domestic is looking stable.
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Launched two brands
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Looking at multiple acquisitions in the next few months.
- 400 cr domestic business
- Smaller acquisition - Give you access to the market which might not be present. -
Not much pricing pressure in the oncology business. This looks stable—a few launches in the next few months.
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We are only speciality doctors. We do not cover General physicians. Hence we are working on acquisition to increase reach.
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- Q2 reflect base/core business- 50cr PAT.
- 660 cr investor out of that 110 cr is Agro inventory. The supply chain is strained. Now you need inventory for 6/9 months.
- Focus is on Oncology, Peptides and Oligo Peptides for the US
- We are an aggressive generic company. We cannot partner with innovators and are not in the business of the partnership. That is our business model.
- Cash equivalent - 1000 cr
- Embrovicah - No updates
- Subs (excited )
- Expect good business from Canada and Brazil.
- 40% PAT coming from subs
-Looks forward to growth in Brazil from $9-10 million to $15 million in next 2 quarters. - Received some tender orders from Govt and new launches.
Agri Business
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CTPR- No sales at all.
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Discount is 25% MRP. This is an incentive to sellers to stock up and sell.
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B2B/B2C- 50-60% is coming from B2B and 35-40% from B2C
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Hiring Reps.
-Near team is driven by domestic. -
Looking for export, but it may take some time.
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Expectations:
- Start seeing some sales in the Dec quarter. Scale up in the March quarter and see the peak in the June quarter.
- Limited competition product, and there is enough money to be made.
- We should expect 10-20% market share. We will have a limited number of supplier.- Lot of sales in coming quarters. We have stock and order and are looking for Rabbvi season in the next 2 months.
-Based on the market feedback, we shall do very well. - There are two sides to this business- Own brand and third-party brands.
- Shall see a big bump in sales in next few quarters in this segment.
- Lot of sales in coming quarters. We have stock and order and are looking for Rabbvi season in the next 2 months.
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5 to 7 products in the pipeline.
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The main driver will be domestic business and export of CTPR.
Revlimid
- Q2-Q3 no expectations of contribution.
- Q4 and Q1 contribution- Extremely good quarters. The launch date is March every year.
- Agri contribution. These two quarters shall be good.
My View
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I think Q3 will be subdued but a little higher than Q2, which is probably the quarter with the lowest profitability. From next quarter CTPR and Subs will boost revenue in terms of profitability. This, coupled with a few domestic launches for Oncology, shall boost profitability.
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Q3/Q4 - At least one domestic acquisition. This will help them drive domestic business. Eventually, they will have another domestic acquisition. From the current revenue of 400cr, I think the domestic revenue shall double in the next 3-4 years.
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Q1 will be the biggest profit growth due to Onco and CTPR. I think Revlamid will overshadow it.
Note: Invested.
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