Glenmark Life Sciences –

Q2 FY 25 results and concall highlights –

Revenues – 507 vs 595 cr, down 14 pc
Gross margins @ 55.6 vs 54.1 pc ( an encouraging sign )
EBITDA – 143 vs 172 cr, down 17 pc ( margins @ 28 vs 29 pc )
PAT – 95 vs 119 cr, down 20 pc

Cash on books @ 446 cr

Temporary closure of Ankleshwar facility has led to delayed execution of orders impacting company’s revenues across geographies

Segmental revenues –

Generic APIs – 473 vs 542 cr, down 12 pc

CDMO – 24 vs 25 cr, down 5 pc. Signed a multi year definitive arrangement with an innovator company for supply of API. One more project is expected to commercialise wef Q3. Multiple ongoing discussions with various companies for award of manufacturing contracts

Geography wise sales mix –

Regulated markets – 87 pc vs 80 pc YoY
Emerging markets – 13 pc vs 20 pc YoY

Therapy wise sales –

Cardiovascular – 44 pc
Central nervous system – 14 pc
Pain management – 3 pc
Diabetes – 3 pc
Others – 36 pc

Manufacturing facilities –

Ankleshwar – 950 KL
Dahej – 400 KL
Mohol – 50 kl
Kurkumbh – 25 KL

Capex plan –

Started phase – 1 construction at Solapur for 200 KL facility ( Greenfield expansion ). Likely to be operational in FY 26

Brownfield expansions – Likely year of commercialisation –

Ankleshwar – 60 KL – FY 26
Dahej – 160 KL – FY 26

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

Have added 4 high potency APIs to their portfolio. With this, their HP-APIs portfolio now stands at 21 molecules

Committed to high single digits revenue growth for full FY with steady margins. Looking at much better H2 performance

R&D expenses @ 3 pc of sales

Argentina business is seeing weakness due macro-economic conditions there. Plus there has been some production loss in Q2 where the Ankleshwar plant was not avlb for around 25 days. Hence the company has moderated its topline growth expectations from mid teens to high single digits

FY 26 should be a high growth year specially because of the two CDMO projects ( mentioned above ) going live. These two CDMO molecules should generate revenues of about 100 cr / yr. Plus the base business is doing well

Company is running at 90 pc capacity utilisation. May have to forego some lower margins business because of that

Capex tgt for full FY 25 @ 300-350 cr. Have already spent around 85 cr in H1

Chinese players are becoming very aggressive in the generic API mkts. However, the company is not impacted in a big way as > 80 pc of their sales come from regulated mkts

Disc: added recently, inclined to add more due steep fall in stock price, biased, not SEBI registered, not a buy/sell recommendation