Glenmark Life Sciences –
Q1 FY 25 results and concall highlights –
Revenues – 588 vs 578 cr, up 2 pc
Gross margins @ 51 vs 57 pc
EBITDA – 165 vs 195 cr, down 15 pc ( margins @ 28 vs 33 pc )
PAT – 111 vs 135 cr, down 18 pc
Cash on books @ 426 cr
Breakdown of revenues ( by customers ) –
Non GPL business – 392 cr ( 67 pc of sales )
GPL business – 196 cr ( 33 pc of sales )
Breakdown of revenues ( by business segments ) –
Generic APIs – 535 cr ( 93 pc of sales )
CDMO – 42 cr ( 7 pc of sales ) – signed a multiyear agreement with an innovator for supply of API. Expect commercialisation wef Q4
Breakdown of revenues ( by target markets ) –
Regulated markets – 84 pc
Emerging markets – 16 pc
Breakdown of revenues ( by therapeutic segments ) –
Cardio – 41 pc
CNS – 16 pc
Anti-Diabetic – 4 pc
Pain management – 6 pc
Others – 33 pc
Contribution from chronic therapies @ 67 pc
Have added 05 APIs to the development grid – 03 are high potency – Onco APIs and 02 are synthetic small molecules
Manufacturing facilities –
Ankleshwar Gujarat – 742 KL ( additional 208 KL capacity will come on stream wef Q2 FY 25 @ Ankleshwar )
Dahej Gujarat – 381 KL ( additional 18 KL capacity will come on stream wef Q2 FY 25 @ Dahej )
Mohol Maharashtra – 49 KL
Kurkumbh Maharashtra – 25 KL
Greenfield expansion @ Solapur – phase -1 of construction has started to set up a 200 KL facility. Phase 2 @ Solapur shall add another 400 KL of capacity. In addition, 400 KL of backward integration capacity is also planned at the same site
Future growth drivers – Onco High Potency APIs, CDMO ramp up, expansion into complex APIs and Iron compounds, pursuing 2nd source opportunities for top generic players, geographical expansion
Future drivers of operational efficiencies – Debottlenecking, backward integration, adoption of flow chemistry in manufacturing
Company’s business with GPL did suffer in Q4. In Q1, there has been a smart recovery and this business is up 18 pc QoQ
Q1 was company’s first Qtr after a long time without the PLI benefits. Hence the contraction in Gross Margins. Slightly unfavourable product mix also contributed to GM compression
Company expects their CDMO business to pick up significantly in Q2
Company had received a closure notice from Gujarat Pollution control board ( in Mid July ) for its Ankleshwar site – citing pollution outside their plant / site. The issue was finally resolved on 14 Aug. Company should be able to catch up for the production loss as 1.5 months are still available in this Qtr
Company doesn’t expect their GMs to go below 51 pc in future
According to the management, upcoming demand environment is much, much better. The brownfield expansion that’s coming on stream should take care of this additional demand over next 1-2 yrs. After that, the Greenfield capacity at Solapur shall kick in
The Bio-Secure act in US is a definitive tailwind for the company’s CMO business – they did acknowledge the the same in the concall
Capex requirements for FY 25 @ around 350 cr. Capex outlay for FY 26 shall also be significant. Hence the dividends payouts, going fwd should be smaller vs past. Also – don’t intend to take on any debt for the planned capex for next 2-3 yrs
Company’s CDMO business currently has 3 commercial projects. Should add another 2 products by end of FY 25. These 2 projects should add 100 cr / yr to the topline. That should take the total CDMO business to around 250 cr / yr. Aim to take it to 500-600 cr / yr in next 4-5 yrs
Post the change of promoters and Nirma group taking over, company has become more aggressive wrt Capex
Disc: initiated a tracking position, biased, not SEBI registered, not a buy/sell recommendation
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