Below is a comparison of revenues & margins of Vikram Thermo (VT) with another India based company in this space – Ideal Cures (IC).
Though Ideal Cures is not a listed company (majority stake acquired by a privately held company named Colorcon in 2021), this comparison might pose some interesting questions.
(Note: Ideal Cures financial data is taken from MCA filings)
Revenue comparison
| (in Cr.) | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|
| Ideal Cures | 180 | 171 | 137 | 113 | 105 | 108 | 88 | 89 |
| Vikram Thermo | 93 | 74 | 56 | 58 | 50 | 50 | 39 | 38 |
In FY22 Ideal Cures was 2X of Vikram Thermo. In preceding 2 years though, VT has grown at a much higher rate (29% vs 15%).
OPM comparison
| Operating Margin % | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|
| Ideal Cures | 24%* | 46% | 38% | 37% | 34% | 38% | 34% | 34% |
| Vikram Thermo | 17% | 25% | 22% | 16% | 11% | 17% | 21% | 16% |
*FY2022 OPM dropped due to a one-time bonus of 37 CR to employees.
Over the years, Ideal Cures’ margins have been significantly superior to that of Vikram Thermo. Among other, this is probably one of the reasons Colorcon paid more than 12x sales to acquire a ~70% in the company.
Almost all of this delta in margins can be attributed IC’s much lower COGS than VT.
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