Some take aways from Sajal Kapoor + Aditya Khemka’s Twitter spaces about 10 days back –
Neuland is the only company to share full pipeline of molecules ( phase wise ) in their investor ppt. No other company does it – not even Divis, Syngene, Laurus
Laurus has 1200 scientists on its rolls vs 400 for Divis. That’s a definitive tick for Laurus. Nothing against Divis
Domestic Pharma margins likely to shoot up in Q1 FY 24. Should have happened for Q4 FY 23 as well but didn’t because its a seasonally weak Qtr for domestic mkt
Margin improvement due falling power, RM costs plus the annual price hikes
Diagnostic companies results to start looking better from Q1 as the base Qtrs won’t have COVID related sales. So… double digit topline growth with improved margins are possible
API overstocking took place in FY 21, 22. Hence FY23 was weak. FY24 should be much better on the base of a weak year and the overstocking has also now been liquidated
NLEM prices set by the Govt are generous. Domestic companies don’t have any problems meeting NLEM price criteria
Long term risk in domestic Pharma mkt- buyer consolidation due emergence and growth of big E-Pharmacies
Possible Black swan event- If private sector doctors are forced to prescribe generic drugs
One concern with Indoco Remedies – No improvement in MR productivity in last 4 yrs
Had very kind words to say about Manish Gupta, CEO of Jagsonpal Pharma (joined last year). He may well turn it around like Mr Sikri turned around RPG Life
New injectable long acting ARVs are overhyped as patient compliance and affordability is low there vs oral ARVs
As such NCE CDMO is the real long term story iro Laurus. May start to play out from 3rd or 4th Qtr of FY 24. Agro and Animal pharma CDMO contracts likely to go commercial by then
Large hospitals are too expensive. Better to buy smaller chains and wait for them to become big
Be careful in Hospitals adding > 20 pc of Gross Block via Greenfield route … it causes significant suppression of return ratios. The same gets reflected in stock price performance (Eg-Apollo from 2010-14)
Current management of Sequent,Pharmova and Piramal Pharma-not promising
Seeing significant positive operating leverage to play out in Syngene in next 2 yrs
Spoke highly of Dr Reddy’s current CEO ( joined in 2018 ) because he out licensed their cash burning NCE projects and increased capital allocation to India Branded vs US generics business
One good thing that Sun Pharma did was to de-merge their NCE business. Should also be done by Glenmark, Pharmova and not burn shareholder money
Mankind’s IPO may have some rub-off on valuations of Eris, JB,RPG and other India focussed branded businesses
Aarti Pharma looks good… just on the basis of their long term track record
Disc: invested in – Laurus, Divis, Neuland, Syngene, JB, RPG, Sun and Indoco in Pharma space. Holding – KIMS, Rainbow and Narayen among hospitals
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