HDFC securities recently came out with a coverage report on Gujarat Themis. This report has some additional clarity on the 200 Crs capex.
In terms of the capacities, the total fermentation capacity is about 450 cubic meters and the company plans to double this for which company has already received the EC clearance. With regards to raw materials, the company is not dependent upon China.
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GTBL is implementing capital expenditure of about Rs 200cr. It would be for i) a new R&D Lab ii) increase fermentation capacity and iii) API block.
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Fermentation business would have three blocks and would be commissioned in a phased manner. The capex would largely be through internal accruals. Payback period for new capex could be 3-4 years. Fermentation capacity could come on stream in H1FY25.
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Company is setting up API unit with an outlay of ~Rs 40cr. It will cater to regulated markets, EM and RoW markets. In the new products, margins could be slightly on a lower side, however there won’t be significant impact on margins. It is likely to come on stream by the end of FY24.
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R&D centre is expected to be completed by Q1FY24. It would be compliant with various regulatory authorities
Also, this snippet from the report has clarified some of the open questions that people raised during last concall in terms of possible stake increase by Patel Family/Themis Medicare entity:
Themis Medicare approved additional investment in Gujarat Themis Biosyn Limited (“GTBL”), an Associate Company by way of purchase of 91.4 lakh equity shares (6.47% of equity share capital of GTBL) from an existing shareholder of GTBL, viz. Pharmaceutical Business
Group (India) Limited (“PBG India”) at Rs 745 per share. On completion of the said purchase, the company’s shareholding in GTBL would increase from 23.19% to 29.66%. This acquisition was however called off later.
Tarun
Disc: Tracking, no investment
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