Notes from Annual report FY 24
• 3 manufacturing facilities, 95% inhouse production and backward integration leading to cost competitiveness. Roughly 25% of raw material supplies are from China
• High quality and reliable products with no product rejections in 15 years
• Diverse product portfolio 32 API (30 veterinary, 2 human). In FY 24 expanded portfolio by 6 new products and more are under development.
• Market share ranging from 15% to 50% in key products
• Suppliers to 5 of global top 10 animal healthcare companies; No single customer more than 6% of revenue
• Initiated CEP filings for Triclabendazole (already approved), Flunixin Meglumine and Marbofloxacin with EDQM (in 2022)
| Revenues (Rs crs) | FY 20 | FY 21 | FY 22 | FY 23 | FY 24 |
|---|---|---|---|---|---|
| Veterinary APIs | 146 | 238 | 293 | 259 | 323 |
| Human APIs | 3 | 17 | 21 | 13 | 11 |
- Revenue split – 90% Animal APIs, 3% Human APIs, 3% Intermediates and 4% Finished dosages
- Geographic split of revenue – 34% Asia, 26% India, 22% Europe, 16% USA, 2% RoW
- Capex – Ongoing greenfield capex at Tarapur at capex cost of Rs 160 crs (increasing capacity by 50%)
- Will drive next phase of exponential growth
- c. Rs 45 crs invested so far for civil construction – mostly complete. Machinery will be installed in phases over next 12-15 months
- If demand recovery continues, can consider outsourcing some manufacturing to capitalize on growth opportunities until new facility comes up
- 1st phase of capex to complete by FY 25 end (it was Q2 FY 25 as per last update in Jun’24)
- How was FY 24? Early part of FY 24 had significant challenges – subdued demand, high customer inventory and currency volatility in key markets like Egypt, Pakistan and Turkey.
- Inventory destocking phase, which had been a significant headwind, came to an end and led to recover in demand (particularly from Asia) as the year progressed.
- Price realizations were lower compared to previous years.
- Reduction in raw material costs helped in in normalized margin levels.
- Outlook on industry? Promising driven by rising prevalence of zoonotic diseases, expanding animal populations, and humanization of pets – leading to higher expenditure on healthcare
- R&D expense increased 44% YoY @ c. 1.5% of topline
- Trying to navigate regulatory challenges in US which typically takes 2-3 years, Europe is faster
- Promoters’ remuneration (Rahul and Rajesh) c. 3.8 crs ~ 10% of FY 24 net profits
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