Based on the recent daily volumes, might be the case that buyers have factored in the sale which you mentioned, a good entry range was around 88-92 based on the daily chart (there was a strong wide range candle with high volumes) which confirmed moving out of stage 1 are. Now, the price might be tested around 125-130 and see a small pullback or it will keep continuing going up. I would personally see how it reacts in 125-130 range.
Posts tagged Value Pickr
The harsh portfolio! (02-10-2023)
Yes, my overall pharma exposure currently is very high, ~23%. This is the second time I got the sector right, and also scaled position size reasonably well. Coming to CDMO/CRO/etc., rather than labeling and then doing some variant of thematic investing, I find betting on specific businesses that I understand as somewhat better. For e.g. I have been holding Ajanta Pharma since 2018 and the main reason has been there is no other listed pharma co with a globally diversified business model that makes higher ROIC and FCF. I have been unable to categorize it into any bucket (not completely branded, no CMO, no CRO, no API) but still they have better metrics than most other listed cos. That being said, I was contemplating adding Syngene in May 2020 as a replacement for Divis (see below), when its valuations had become reasonable but missed adding it. I think you can label Syngene as a CRO, maybe when it becomes reasonably valued, I might add it. As you might have realized by now, I dont really care much about overhyped stocks.
Yes, please check the Shemaroo thread, I have been updating latest developments there.
Gufic BioSciences Ltd (02-10-2023)
I attended Gufic’s AGM where some of my earlier highlighted concerns got clarified. I have highlighted them below.
As a side note, Pranav Choksi’s energy is contagious. I think he went on for more than 1.5 hours talking at length about their plans, and answering each question with incredible detail. This guy is crazy passionate!
Its incorrectly mentioned in AR, anything beyond 60 day receivable is mentioned in credit impaired. Actual impairment is very low.
Gave extra credit to sell covid products
Sales returns only happen in domestic business (& not in contract manufacturing or exports). 4-5% average sales returns in domestic business (2-3% product due to damage + 2% sale returns which are then resold to other customers). So overall ~3% is sales returns in normal scenario
Split between divisions
- Domestic: 52% (sallaki – 45-50 cr.)
- CMO: 22-25%
- Export: 15%
- API: 8%+
Management also shared their thoughts on how they approach the hospital business, which I found pretty useful. They categorize hospitals into 1) primary – single doctor (25-50 beds), 2) secondary 75-100 beds, and 3) tertiary – large hospital chains. In terms of segments, they categorize by
- Fungal
- Prima care – focused on single nursing homes and catering to rural markets
- Critical care (largely for tertiary hospital) – pan India. Gufic’s target market is growing at 30-35% volumes but there is huge pricing erosion which results in 15-20% value growth
- Sparsh: 128 products currently (target to stabilize 135 products in FY24). 20-25% MoM growth currently. Distributors are still involved, company is doing more demand and negotiate better prices. Will manufacture 80-90% product once Indore ramps up
What is very interesting is they are directly reaching out to hospitals and will sell via their own direct channel where they get a daily idea about demand from individual hospitals. In a way, they want to be a 1-stop provider for all hospitals.
Currently, around 180-200 people are promoting their products via hospital channel.
Miscellaneous
- Expect to maintain 12-15% minimum growth
- With Indore now catering to domestic market, Navsari will largely focus on export market. Export business will be next growth driver (focus on injectable, lyophilization, PFS, complex injectables like liposomal, extended release, peptide based APIs, etc.) – plan to sell Botulinum toxin in export markets
- Indore plant will be initially used for contract manufacturing business, focus on larger companies. Indore facility will be one of the largest lyophilizer factories globally. Will start in next 1-2 months
- 1-3 cr. cost for creating a new dossier (80-90 dossiers have to filed in next 2-3 years)
- Working on recombinant biologics with Balram Singh which can reduce imports
- Remdesivir: 63 cr. (processing income). This business went away
- 170-190 days normal inventory period
- Residential apartment (in Mumbai close to office, in Surat close to Navsari): for own employees and business associates as they are expanding
- 20-25 cr. depreciation cost
- Indore has been taken on 100 year lease
- Indore will take 3-4 quarters for validation and stabilization
Disclosure: Invested (position size here, no transactions in last-30 days)
Gufic BioSciences Ltd (02-10-2023)
Gufic Bio Company overview and Q1 FY 24 review –
Geographical revenue breakup (aprox)-
Domestic formulations – 50 pc
International formulations – 13 pc
CMO – 28 pc
APIs – 9 pc
Domestic business break up –
Critical care – 52 pc
Infertility division – 23 pc
Others – 27 pc
Critical care division-
Making a comeback post inventory liquidation in late 2022 & early 2023
Company has presence across 6000 hospitals with 92 molecules
Company to soon launch of Delbavancin (used against acute bacterial skin infections)-first company to launch it in India
Fertility Division-
Recently launched Human Menopausal Gonadotropin(HMG) – used to boost success in IVF cycles. Trials are on to establish company’s product efficacy vs Intl Mkt Leader
High growth continues in Dydrogestrone
Q1 FY 24 business highlights –
Gufican and Gufibis Oils ( orthopaedic oils for pain relief ) continue to gain Mkt share – can experience substantial growth going fwd
Successfully launched Zinc Based multivitamin tablets. Getting good Mkt response
Successful completion of split face trials of Stunnox (Botulinum Toxin – used in Chronic migraine, Spastic disorders etc) against the Mkt leader have yielded remarkable results – instilling confidence in the Doctors
Company Infrastructure –
Field force > 1000 ppl
Has one of the largest Lyophilisation capacities in India for CMO
Makes in-house APIs in- anti-fungal, Anti-biotic and Anesthetic therapies
International business spread across 20 countries – Europe, LATAM
Manufacturing facilities-02 at Navsari, 01 at Belgaum, 01 at Indore
Last 4 yr finances –
Sales CAGR – 18 pc
EBITDA CAGR – 31 pc ( margins up at 19.9 from 13.1 pc in FY 19 )
PAT CAGR – 38 pc ( margins up at 11.5 from 5.4 pc in FY19 )
Q1 FY 24 outcomes –
Sales – 195 vs 165 cr
EBITDA – 36 vs 33 cr (margins @ 18.6 vs 20.3 pc)
PAT – 21 vs 21 cr
Delbavancin – can be a good molecule as it has wide usages before Ortho / Cardiac surgeries. Priced in India at 1/5th the International prices. Can be a good revenue driver in 3-4 yrs in India
Can also be launched quickly in Intl Mkts
Dual Chamber Bags launch scheduled in Q2
Indore facility Capex to go live in Q3 FY 24 – should be a nice tailwind for CMO business
Share of exports in total sales currently at 18 pc of sales
Margin compression in Q1 due increased R&D expenses in Q1
Likely to grow 15-20 pc in topline, EBITDA this yr (bare – minimum)
Likely to maintain 19-20 pc EBITDA margins this yr
Disc: not invested. Intend to buy. Biased. Not SEBI registered
Ranvir’s Portfolio (02-10-2023)
Gufic Bio Company overview and Q1 FY 24 review –
Geographical revenue breakup (aprox)-
Domestic formulations – 50 pc
International formulations – 13 pc
CMO – 28 pc
APIs – 9 pc
Domestic business break up –
Critical care – 52 pc
Infertility division – 23 pc
Others – 27 pc
Critical care division-
Making a comeback post inventory liquidation in late 2022 & early 2023
Company has presence across 6000 hospitals with 92 molecules
Company to soon launch of Delbavancin (used against acute bacterial skin infections)-first company to launch it in India
Fertility Division-
Recently launched Human Menopausal Gonadotropin(HMG) – used to boost success in IVF cycles. Trials are on to establish company’s product efficacy vs Intl Mkt Leader
High growth continues in Dydrogestrone
Q1 FY 24 business highlights –
Gufican and Gufibis Oils ( orthopaedic oils for pain relief ) continue to gain Mkt share – can experience substantial growth going fwd
Successfully launched Zinc Based multivitamin tablets. Getting good Mkt response
Successful completion of split face trials of Stunnox (Botulinum Toxin – used in Chronic migraine, Spastic disorders etc) against the Mkt leader have yielded remarkable results – instilling confidence in the Doctors
Company Infrastructure –
Field force > 1000 ppl
Has one of the largest Lyophilisation capacities in India for CMO
Makes in-house APIs in- anti-fungal, Anti-biotic and Anesthetic therapies
International business spread across 20 countries – Europe, LATAM
Manufacturing facilities-02 at Navsari, 01 at Belgaum, 01 at Indore
Last 4 yr finances –
Sales CAGR – 18 pc
EBITDA CAGR – 31 pc ( margins up at 19.9 from 13.1 pc in FY 19 )
PAT CAGR – 38 pc ( margins up at 11.5 from 5.4 pc in FY19 )
Q1 FY 24 outcomes –
Sales – 195 vs 165 cr
EBITDA – 36 vs 33 cr (margins @ 18.6 vs 20.3 pc)
PAT – 21 vs 21 cr
Delbavancin – can be a good molecule as it has wide usages before Ortho / Cardiac surgeries. Priced in India at 1/5th the International prices. Can be a good revenue driver in 3-4 yrs in India
Can also be launched quickly in Intl Mkts
Dual Chamber Bags launch scheduled in Q2
Indore facility Capex to go live in Q3 FY 24 – should be a nice tailwind for CMO business
Share of exports in total sales currently at 18 pc of sales
Margin compression in Q1 due increased R&D expenses in Q1
Likely to grow 15-20 pc in topline, EBITDA this yr (bare – minimum)
Likely to maintain 19-20 pc EBITDA margins this yr
Disc: not invested. Intend to buy. Biased. Not SEBI registered
Ranvir’s Portfolio (02-10-2023)
Gufic Bio Company overview and Q1 FY 24 review –
Geographical revenue breakup (aprox)-
Domestic formulations – 50 pc
International formulations – 13 pc
CMO – 28 pc
APIs – 9 pc
Domestic business break up –
Critical care – 52 pc
Infertility division – 23 pc
Others – 27 pc
Critical care division-
Making a comeback post inventory liquidation in late 2022 & early 2023
Company has presence across 6000 hospitals with 92 molecules
Company to soon launch of Delbavancin (used against acute bacterial skin infections)-first company to launch it in India
Fertility Division-
Recently launched Human Menopausal Gonadotropin(HMG) – used to boost success in IVF cycles. Trials are on to establish company’s product efficacy vs Intl Mkt Leader
High growth continues in Dydrogestrone
Q1 FY 24 business highlights –
Gufican and Gufibis Oils ( orthopaedic oils for pain relief ) continue to gain Mkt share – can experience substantial growth going fwd
Successfully launched Zinc Based multivitamin tablets. Getting good Mkt response
Successful completion of split face trials of Stunnox (Botulinum Toxin – used in Chronic migraine, Spastic disorders etc) against the Mkt leader have yielded remarkable results – instilling confidence in the Doctors
Company Infrastructure –
Field force > 1000 ppl
Has one of the largest Lyophilisation capacities in India for CMO
Makes in-house APIs in- anti-fungal, Anti-biotic and Anesthetic therapies
International business spread across 20 countries – Europe, LATAM
Manufacturing facilities-02 at Navsari, 01 at Belgaum, 01 at Indore
Last 4 yr finances –
Sales CAGR – 18 pc
EBITDA CAGR – 31 pc ( margins up at 19.9 from 13.1 pc in FY 19 )
PAT CAGR – 38 pc ( margins up at 11.5 from 5.4 pc in FY19 )
Q1 FY 24 outcomes –
Sales – 195 vs 165 cr
EBITDA – 36 vs 33 cr (margins @ 18.6 vs 20.3 pc)
PAT – 21 vs 21 cr
Delbavancin – can be a good molecule as it has wide usages before Ortho / Cardiac surgeries. Priced in India at 1/5th the International prices. Can be a good revenue driver in 3-4 yrs in India
Can also be launched quickly in Intl Mkts
Dual Chamber Bags launch scheduled in Q2
Indore facility Capex to go live in Q3 FY 24 – should be a nice tailwind for CMO business
Share of exports in total sales currently at 18 pc of sales
Margin compression in Q1 due increased R&D expenses in Q1
Likely to grow 15-20 pc in topline, EBITDA this yr (bare – minimum)
Likely to maintain 19-20 pc EBITDA margins this yr
Disc: not invested. Intend to buy. Biased. Not SEBI registered
SmallCap Hunter : Trying to find the dark horses with triggers (02-10-2023)
V-mart is good company to study as valuation is attractive but they are getting competition from other brands like zudio which is run by trent
SmallCap Hunter : Trying to find the dark horses with triggers (02-10-2023)
V-mart is good company to study as valuation is attractive but they are getting competition from other brands like zudio which is run by trent
Barbeque nation Ltd (02-10-2023)
Completely agree with you. There is not much downside left.
Barbeque nation Ltd (02-10-2023)
Completely agree with you. There is not much downside left.