Some highlights from the Q2 FY24 concall:

Summary:

1. Very strong quarter where every variable went favourable – lower RM prices, adequate semiconductor availability, Dollar strengthening against the Yen, SUVs doing well etc. However, such “all factors moved favourably” will not happen in every quarter.

Industry:

2. On the demand side, share of CNG vehicles in the industry has now reached ~15%. Share of diesel vehicles continued to decline and is now about 17% compared around 19% during last financial year Hybrid vehicles has seen a good traction and now the share of Hybrid vehicles has increased to about 2%

3. Management says slowdown in small cars is because costs have gone up due to regulatory action and incomes at entry level have not bounced back to the same extent. However, sooner or later the income levels will catch up and the small car category will see a revival. Only top 3 % of Indian population owns a car today so there is a huge untapped market still there. For industry, small car segment used to be about 34% of the portfolio. Now, it is about 28%. 4. Let us keep in mind that the top 3% of India today owns a car. So, if the car market has to grow, more people have to move from the 97% club to the 3% club.

Company:

5. New model development time is about four years.

6. Current year, the capital expenditure should be above INR 8,000 crores (this excludes SMC capex which is yet to be decided)

7. There is a 10% reduction in the percentage of first-time buyers from the market for us

8. The company has close to 2.3 million units of annual manufacturing capacity.

Q2 performance:

9. This was the highest sales in a quarter ever, which is even more commendable considering this was a seasonally weak quarter. Company has gained market share. Exports were also strong.

10. Pending orders at the end of quarter 2 has come down to ~288,000 units and further corrected to 250,000 today (27-Oct-2023). CNG accounts for around 123,000 units out of this. Ertiga is one major model with about 73,700 units in the pending orders. Then, we have the Brezza, the Grand Vitara, the Jimny, Fronx and Invicto. So, a large part of pending orders is for the SUVs, which have been recently launched

11. Diverging demand patterns between utility vehicle and small car segment is continuing. Proportion of small cars and first-time buyers is coming down in their portfolio.

12. The major benefit to margins has come from the commodities and the cost reduction that we have been able to achieve. There has been a significant softening in the prices of precious metals commodities.

13. The sales promotion cost is about INR 17,692/vehicle in the Q2 FY23-24, we were INR 16,214/vehicle in the Q1 FY23-24, so marginally higher.

14. In commodity prices, 50 % of the basket is steel and steel prices have started inching up again. There was a very sharp decline in the precious metal prices.

Future:

15. Going forward, the Company plans a 3-fold increase in its exports volume by increasing its exports to 750,000 -800,000 units/ year by 2030-31 (this comes to 17 % CAGR)

16. We are talking about capacity expansion. Capacities will go up by 2 million.

17. Transiting to EV – over the period of next six years, six new models are coming in.

18. On SUVs – We’ve announced in our annual report that currently from about 17 models, we will move up to about 28 by the turn of the decade.

19. One of the reasons for SMG integration is that it gives us flexibility and agility to quickly respond to the changes in demand.

(Disc.: Holding)

Piramal Pharma – Annual Report – 2022-23 summary –

Has 17 manufacturing locations

Distribution network spread over 100 countries

Works under 3 segments –

CDMO business
Complex Hospital Generics ( CHG )
India Consumer Healthcare ( ICH )

Has a JV with AbbVie in India ( holds 49 pc stake )- one of the Mkt leaders in Ophthalmology in India

Has a 33 pc stake in Yapan Bio – operates in biologics/ bio therapeutics and vaccines space

Revenue break up –

North America – 45 pc
Europe – 20 pc
Japan – 4 pc
India – 20 pc
Others – 11 pc

69 pc sales from regulated markets

Segment wise revenue break up –

CDMO – 56 pc
CHG – 32 pc
ICH – 12 pc

CDMO –

Offer CDMO services in High potent APIs, Antibody Drug conjugates, Peptides, sterile injectables and hormonal products

Manufacturing facilities located across India, UK, North America. Have a deep customer base across – Big Pharma, Bio-Techs and Generic Pharma majors

Have successfully cleared 36 regulatory inspections since 2022

Company also offers CRO services from its facility at Ahmedabad

Also makes 30 off patent APIs for global clients. Also makes Vitamin / Minerals ingredients and premixes for human and animal nutrition

Top 5 customers contribute 25 pc of CDMO revenues. Breakdown of revenues from Discovery:Development:Manufacturing currently at – 5:30:65 ( includes generic and on-patent manufacturing ). Currently, company is manufacturing 18 on Patent commercial molecules. Company also has 35+ molecules in Phase – 3 development phase right now

Within CDMO segment, revenue breakup is as follows –

US- 47 pc
Europe – 27 pc
Japan – 3 pc
India – 14 pc
Others – 9 pc

Among the 30 pc CDMO revenues that come from Development services, the breakdown is as follows –

Pre Clinical – 20 pc
Phase -1 – 25 pc
Phase -2 – 12 pc
Phase – 3 – 43 pc

CHG –

Has a portfolio of 35 hospital focussed products in areas of Inhalation anaesthesia, Injectable anaesthesia, pain management, Intrathecal therapy (delivering pain killers directly at spinal cord) and other injectables – sold across 6000 hospitals

PPL is 4th largest company in global Mkts for inhalation anaesthesia – Sevoflurane, Desflurane, Isoflurane and Halothane

Biggest player in Sevoflurane (inhalation product – 40 pc Mkt share ) and Baclofen ( pre-filled syringes – 78 pc mkt share ) in US mkt

Both – inhalation and intrathecal therapies are complex and capital Intensive

Vertically integrated – in inhalation products. Company to continuously intensify efforts to increase the degree of vertical integration so as to sharpen its competitive edge

Has a direct sales for in US

Product pipeline of > 25 SKUs in the CHG segment

In process of expanding capacities at Dahej and Digwal facilities. Dahej makes KSMs for inhalation anaesthesia products while Digwal facility makes the APIs

Company’s Fentanyl brand ranks No-1 in Japan, RSA and Indonesia

Sales break up of CHG sales –

US- 56 pc
Europe – 17 pc
Japan – 4 pc
India – 6 pc
Others – 17 pc

ICH –

Has over 30 different OTC products with multiple SKUs. Mainly present in categories like – analgesics, skincare, Vit/Minerals, women’s health, Digestives, Hygiene and protection. Also has manufacturing and distribution rights for Supradyn, Saridon, Becozym and Bensdon from Bayer Pharma

Own power brands include – I-Pill, I-Range, Lactocalamine, Littles, Tetmosol, Polycrol. Company has introduced Littles baby diapers. If they find traction in the Mkt, the company may end up having a huge winner at hand

Other brands include – NIXIT, Joint Flex etc

Now strengthening presence in E-Comm, Modern trade channels

Company spending / investing aggressively behind brands. Not averse to acquisitions in this space provided the financial conditions of the company allow for the same

Company Infra –

Manufacturing facilities –
US – 04
UK – 02
Canada – 01
India – 10 ( including R&D site )

Total employee count – 6200

Industry trends –

CDMO – industry snapshot – grew at 7 pc CAGR from 2016 – 21 from $100 billion to $135 billion. Did outgrow global Pharma Industry growth of 4 odd pc during this period. Likely to be a $ 180 billion + industry by 2026

The trend of outsourcing the development and manufacturing is gaining traction by the day. Its a win win for Innovators and their CDMO partners

Compex Generics ( difficult to make APIs, routes of administration, complex – drug + device combo ) Mkt snap shot –

Mkt currently valued at $ 70 billion, grew by 12 pc CAGR from 2017-22. Likely to be a & 120 billion plus industry by 2026. Complexity in manufacturing and capital intensity are key entry barriers here

Among complex generics, complex hospital generics form the bulk of the Mkt with share of 70-80 pc

Cumulative size of – Sevoflurane, Isoflurane, Desflurane and halothane is aprox $ 1.09 billion with sevoflurane constituting 84 pc of the Mkt

Due high capital intensity, requirements of backward integration, difficulty in making devices like vaporisers etc – competition is limited. AbbVie, Baxter, PPL and Lunan are the only players in the Mkt at present

Intrathecal therapy – gaining traction in recent years. Two popular products are – Morphine Sulphate, Baclofen. Baclofen’s Mkt size in US in 2022 was aprox $ 33 million

Indian OTC Industry –

Valued at $ 4 billion in FY 22, grew by 8 pc CAGR from 2017-22. Expected to be a $ 7 billion industry by 2026 due increased awareness and affordability

Company’s compliance track record –

04 USFDA inspections in FY 23. 02 inspections with zero observations. Other regulatory bodies also inspected PPL facilities ( like – MHRA, EMEA, Health Canada etc )with no major observations. Company successfully cleared 36 regulatory inspections in last FY

Disc – holding, biased, not SEBI registered

I was looking for entire dataset of listed companies along with their sectors. It will be time taking exercise to go through each company on screener and finding its sector. Hence I was asking if this information is already available somewhere

On screener you can see from which sector it is alongwith its peer companies too.

Is there any website where we can see industry category of each listed company? e.g. for each company, is there any place where we can see if it is finance or auto or chemical company? Not sure if this information is present in BSE or NSE website