Dr Chava interview on BQ Prime.
Key Highlights from the interview:
General
- Biggest drag from ARV volume and pricing.
- Worst is over for ARV.
- Fy24 is a year of consolidation. Big capacities are coming on steams in Fy24.
- All API capacities completed
- Formulation- Qualified 5 billion tablet capacities
- Animal health capacities are undergoing qualification. It will be commercial by Q4-Fy24.
- 250 cr dedicated R&D for CDMO and will be ready by Q2/Q3-FY24. That will not add significantly to revenue immediately, but it will add to CDMO capabilities for early-stage projects. The challenge is to take on the stage 1 project due to a lack of resources.
- EBITA for Q4- 21%. It will gradually move to 30% in 6 to 8 years. EBITA margin will gradually improve from here.
- Recovery will be the second half.
- H1 ramp will be API/Formulation. H2 uptick from CDMO.
- API capacity utilisation is 55%. We retained business, but we added capacities.
CDMO
- Invested 900 cr last year and investing another 900 cr this year (majority in CDMO) (I guess FY24)
- CDMO is an opportunity than a challenge.
- Animal pharma client- started talking to them in Jan 2020. Commercial manufacturing will start in Q2-Fy24, and then commercial will start from Q4-Fy24. It takes 4 years for a client to develop. It is a long-term gain.
- Long gestation business and cannot be scaled back quickly.
- Clients want ready capacity before committing.
- Added Several big pharma clients in the last 2 quarters.
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