Q2FY23
Financial’s
- Revenue 546.5 Cr || EBIDTA 36.7 Cr || EBIDTA Margins at 6.7% || PAT 15.7 Cr || PAT Margins 2.9%
Chemicals
- Ethyl Acetate price erosion mainly due to ongoing covid lock down in china, too much inventory which is being dumped all over the world at cheap price (QoQ price corrected by 40% )
- At the moment the price of Ethyl Acetate is flat
- Chemicals division negative EBIT ( -3 crores)
- Normalized EBIDTA margins in chemical business are 6-8%
- 70% of the RM for chemicals is from China
- Market is mostly domestic very less IOCLP exports
- No new capacities are coming up
- BASF plants shutdown don’t have any impact , they make in USA not in Europe
- Chemicals that are produced : isobutylbenzene, monochloroacetic acid, and acetyl chloride
Pharma
- Parma Business grown ( Q2 FY23 303 crores vs Q2FY22 241 crores )
- Increasing product mix of non Ibuprofen share, more focus on products metformin, clopidogrel & fenofibrate
- High costs of RM and energy impacted margins, some of this increase in costs are passed onto customers
- Normalized EBIDTA margins in API business are 15%
- Ibuprofen - Current asset utilization is between 75% and 80%. And in the next few quarters, I will take that to about 85%
- Most of IOCLP domestic API business is on spot basis
- Metformin - mostly sold in Domestic market , about 10% is sold to export market
- PAP project (para-aminophenol) - paracetamol is fully backward integrated
- Ibuprofen price is $11 - $12 in the export market and domestic market it is even lower
- Ibu and it is derivatives IOLCP has 50% market share
Capex
- 20,000 Tonnes a year capacity is being added for Ethyl Acetate , will contribute to topline by Q1FY24
- Guidance - 100-150 crore per annum
Registrations
- (Europe Market) REACH Certificate for ethyl acetate and with a tonnage band of more than 1,000 tonnes per annum in accordance with EU REACH regulations on the chemicals and the safe use
- EDQM certification to supply pantoprazole sodium as well as API in the European markets.
- Sitagliptin patent - novel and green process, will bring in more cost advantages
Guidance
- Rest of the year growth will be muted
- Double digit growth will come back by FY24
- Capacity addition in west side of India will be disclosed by Q4FY23
- will be back to double digit EBIDTA margins by Q3FY23
- Aiming to increase more regulated market sales, that will give some good margins
- Registering 4 new products every year
- De risking the IBU business , increasing focus on APIs
Key Products
Metformin - is the main first-line medication for the treatment of type 2 diabetes, particularly in people who are overweight. It is also used in the treatment of polycystic ovary syndrome
Clopidogrel - is an antiplatelet medication used to reduce the risk of heart disease and stroke in those at high risk
Fenofibrate - is an oral medication of the fibrate class used to treat abnormal blood lipid levels. It is less commonly used compared than statins because it treats a different type of cholesterol abnormality to statins
Pantoprazole - is a proton pump inhibitor used for the treatment of stomach ulcers, short-term treatment of erosive esophagitis due to gastroesophageal reflux disease (GERD), maintenance of healing of erosive esophagitis, and pathological hypersecretory conditions including Zollinger–Ellison syndrome.[4][5] It may also be used along with other medications to eliminate Helicobacter pylori.[6] Effectiveness is similar to other proton pump inhibitors (PPIs).[7] It is available by mouth and by injection into a vein.[4]
Sitagliptin, sold under the brand name Januvia among others, is an anti-diabetic medication used to treat type 2 diabetes. In the United Kingdom it is listed as less preferred than metformin or a sulfonylurea. It is taken by mouth. It is also available in the fixed-dose combination medication sitagliptin/metformin.
Main Competitors
Paracetmol / PAP - Sadhna Nitro
IBU : Solara
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