Gufic BioSciences Ltd

Very flattish numbers from Gufic, they are running at full utilization and have prioritized better paying customers (aka exports) as their receivable cycle got very stretched in FY24. Indore is supposed to commercialize in September. Concall notes below.

FY25Q1

• Running at full utilization which has resulted in slower growth

• Navsari at peak can contribute 700 cr ., with product mix can reach 1200-1500 cr. Can reach total revenues of 1500 cr. in next 3-4 years (Indore + Navsari)

• Have given ESOP to head of Indore plant and head of certain marketing team

• FY24 revenue breakup

  • Domestic: 50-55%

  • CMO: 25-30%

  • Exports: 8-20%

  • API: 5-7%

• Ferticare

  • Introduced extended-release formulations of Dydrogesterone

  • Formed a specialty task force – Fertimax to focus on 3 products (dydrogesterone 20/30, Guficin Alpha, Supergraf)

  • Fertimax comprises 40 personnels; 15-20 new + 18-20 existing

  • Their product basket is like BSV (recently acquired by Mankind)

• Spark, Stellar & Healthcare

  • Introduced new molecule in the proton pump inhibitor market: potassium channel inhibitor

  • Introduced Gufispon for cervical spondylosis

  • Strechnil’s market ranking improved from 5th to 2nd

  • Sallaki tablets have 50%+ market share consistently

• Sparsh

  • Launched dual chamber bag Tiecoplanin, dual chamber bag Biapenem, and S Pantoprazole

  • Launching contrast media

  • Expanded to Tamil Nadu, expanding team to 85 people (from 66)

• Exports

  • New approvals: Lithuania (Vancomycin IBE 1000 mg and 500 mg powder), Sri Lanka (COLBACT 2 MIU (Colistimethate sodium for injection BP 2 MIU) and Stripole (Pantoprazole for injection 40 mg))

  • 210 registered products across regulated and semi-regulated markets, 150+ in pipeline

  • Faced capacity problems for Germany, UK, Portugal

• Indore capex

  • Validation of 2 lines finished, commercial production should start in September. Commenced product site transfer from Navsari to Indore

  • Lines 1&2: lyophilization (validation to be completed in September)

  • Line 3: liquid vials (validation completed)

  • Line 4: ampoule (validation completed)

  • Indore will double their capacity

  • In Phase-1, will launch 58 products with 26 being tech transfer from Navsari

  • Targeting 25 lakh lyophilization vials and 10 lakh liquid vials in September

  • 30-35% utilization in FY26, 60% in FY27 and full utilization in FY28

  • Capex: 300 cr.+

  • Will start filing dossiers by January 2025

• Working capital cycle

  • Peak debt: 175 cr. term loan + 120 cr. working capital (~300 cr. at peak )

  • Will only repay starting FY26, will use debt for working capital in first year of operations

  • Longer receivables to hospitals, nursing homes and infertility centers have reduced, prioritizing better paying customers (lost 15-20 cr. sales because of this)

Disclosure: Invested (no transactions in last-30 days)