Am I the only one who has a feeling that doctor sahab mamu bna rhe hai?
I was going through the press release and found very funny comments. Funny because they make no sense. They are put there just to show off (maybe).
“We are leveraging power of our comprehensive technology platform & commercial excellence to advance manufacturing of several clinical programs and maximising the value impact of our integrated model.” (it seems jitni bhi English samaj aai, sab ek line me likh di).
Doctor sahab has been quoted saying momentum in CDMO business. Yet CDMO business is down by good 14%.
And then under CDMO business highlight, tone changes to “Soft growth on expected lines….”
In investor presentation for CDMO business, they have mentioned “Soft growth on expected lines driven by significant resource allocation towards delivering multiple high value complex programs”. So they allocated resources to high value complex business and the CDMO segment de-grew. Isn’t that a paradox?
Now they are saying H2 will be good. Since FY23 (when they were targeting to do $1bn topline), their goal post has always moved ahead by 2 quarters.
“Pricing dynamics across ARV product basket stable but a bit subdued for broader API portfolio”. If this sentence makes any sense, please do explain me.
Under FDF, they have signed a new customer. But obviously, business will only come after multiple quarters. Everything is in the future.
Bio division is “Continued positive market demand” and yet it de-grew by 14%.
Multiple projects coming up only in FY27. Like the one mentioned above for FDF. Large scale commercial fermentation capacity at Vizag coming up in FY27.
As you scroll down the investor presentation, you will notice how “H2 FY25” will change to “Q4 FY25” and “by end of FY25”. So, now the H2 targeted (better) performance is moved to year end.
On the positive side, atleast they are not playing the game of “adjusted EBIDTA”
Sarcasm aside, my point is what management is saying is completely different from what business is saying. In current euphoric market, one needs to tread with caution. Personally, I don’t see margin of safety in the valuation, nor is the management commentary comforting.
DIsclosure: Hold 5% of portfolio in LL. Will exit tomorrow and move to other API company where management has actually walked the talk in Q1 FY25.
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