Money Matters

LAURUS LABS CONCALL TRANSCRIPT 5TH FEB 2021

2021-03-07T06:24:00.004-08:00

LAURUS LABS

CONCALL TRANSCRIPT

5TH FEB 2021

Dr. Satyanarayana Chava:

Our Q3 revenues stood at Rs.1,288 crores, show-casing a robust growth of 76% year-on-year for the quarter and 71% for nine months of FY'21 year-on-year.

Our revenue growth was driven by robust demand for several key products and not driven by COVID-19 related stocking.

EBITDA margin was robust at 34% despite withdrawal of export incentives by the government and high logistics cost during this crisis.

The formulations division achieved Rs.430 cr sales in the quarter, showcasing a growth of almost 50% YoY. During the nine months of FY'21, this division achieved sale of Rs.1,234 cr, with a revenue contribution of about 36% for nine months, as against 28% in FY'20.

During the quarter, we got approved for a triple combination product containing Tenofovir Alafenamide, and we are in the process of obtaining in-country approvals, and we expect to launch this product in the first half of next financial year.

Apart from LMIC business, we have also seen growth in North America and EU. To leverage our marketing front end in US, we commenced the marketing of in-licensed products, products developed and manufactured by our business partners.

Out of five in-licensed products, two are launched, and we will launch the remaining three products during the Q1FY'22. We added a total of nine final approvals and nine months tentative approvals out of 26 ANDAs filed so far. In Canada, we have six product approvals, of which, four were launched, and we intend to launch the remaining two very soon.

For EU, we have validated an additional two products as part of our Contract Manufacturing Partnership. We expect a significant upside from these products from FY'23 onwards.

We also obtained approvals for five products in EU, of which we launched two products and we will be launching the others very shortly.

We continue to invest in our FDF infrastructure. Our debottlenecking exercise of existing capacities is on course and this capacity will be available for commercial manufacturing by end of the Q4,although with a delay of a few months.

Our Brownfield expansion project in FDF on the same site with similar capacities will be operational in a phased manner from August 2021 and will be fully operational by end of FY'22.On the R&D front, we continue to invest in our FDF business.

Overall R&D expenditure across all divisions was 4% of revenue for the 9 months of FY'21. So far we have filed 26 ANDAs in US, nine dossiers in Europe,12 in Canada, eight with WHO, two dossiers in South Africa and two in India, while we have filed several products across rest of the world. Out of the 26 ANDAs filed in US, we believe two are P4s and seven are potential first-to-file and P4s. Our approach remains product-specific rather than market-specific.

In Generic API business, our Antiviral API business recorded a very healthy growth of more than 160% for the Q3 with Rs.568 cr sales. And in the first nine months of this financial year, we almost surpassed the total ARV sales of the entire financial year '20.

The growth was led by higher volumes of all key first line APIs. Second line ARV APIs continue to see healthy sales in Q3 FY'21. Due to the demand increases from third-party API sales, we are expanding capacities for key APIs in the coming 12 months time. We expect to maintain sales at this level in the coming quarters. Our oncology APIs segment recorded growth of 36% QoQ.

Onco sales declined by 25% from Q2 to Q3 due to higher offtake of few APIs based on approvals by a few customers. We are one of the largest high potent API capacities in the country, and have plans to expand high potent API manufacturing capabilities in unit-IV as well. We expect reasonable growth in Onco business in the coming quarters as well.

In the other APIs, our sales remain flat from Q3 FY'20 to Q3 FY'21. But for nine months, we achieved a sales growth of over 45%. The sluggishness in the segment in Q3 was due to changes in delivery schedule from some customers.

We have initiated discussions with one of our key generic partner for contract manufacturing opportunities where we have several APIs, and we expect to build a dedicated block to accommodate these generic API contract manufacturing. We are also creating a lot of capacity for non-ARV APIs.

When it comes to Synthesis business, we recorded a growth of 60% from Q3 FY'20 to Q3 FY'21. In the nine months, we have achieved Rs.343 crs sales.

We have incorporated another step down wholly-owned subsidiary Laurus Ingredients Private Limited during Q3 FY'21. We're expanding the manufacturing infrastructure for this division-to focus on few core areas under consideration. Construction activity initiated at the proposed dedicated synthesis R&D at Genome Valley, close to our current R&D center. A new manufacturing site for this division will also be a Greenfield project at Vizag, which will cater to the manufacturing needs of the division for the next four to five years.

We are acquiring land for this division, and this site will have capabilities to handle steroids and hormones, high potent molecules apart from large volume commercial products. We're also happy to share that we acquired majority equity in Richcore and the company will be renamed as LaurusBio. Laurus Bio is on course to commission large scale fermentation capability during the Q4 FY'21, and we are confident of achieving growth as outlined earlier during the acquisition.

We're also acquiring additional land for further expanding manufacturing capacities and capabilities for Laurus Bio.

V V Ravi Kumar:

Our EBITDA is 34%. Diluted EPS per quarter is at 5.1, not annualized basis, showcasing more than 250% growth over Q3 FY'20. Diluted EPS for nine months is Rs.12.8,not annualized. Our ROCE improved to 40% on an annualized basis due to operational leverage.

On the CAPEX front, we invested around Rs.433 crs during nine months of current fiscal. To strengthen our position as a cost-effective integrated player, we have invested in backward integration for one of our ARV products and which was operational in January ‘21.

We acquired a land for FDF site in Hyderabad. We are in the process of acquiring an additional site for our API and Synthesis division.

Dr. Satyanarayana Chava: The shift in therapy from Efavirenz to Dolutegravir came in to our benefit. While we continue to increase our market share in Efavirenz and its intermediate, we also continue to sell significant volumes of Dolutegravir as part of third-party API, and also, majority of our formulations sales are coming from TLD and some sales are coming from TLE. As you are aware, there are only three approvals for TLE whereas there are nine approvals for TLD. So we continue to have advantage in TLE, while we capture more market share, and we continue to retain the market share what we have achieved in TLD. And when it comes to the revenue split from LMIC versus North America and EU, as we explained earlier, the split is three-fourth and one-fourth, about one-fourth of revenue came from advanced markets and three-fourth came from LMIC. ARV APIs, we are adding more capacities to meet our demand. Surprisingly, our order book for ARV API was much bigger than at the beginning of Q2 FY21 to beginning of Q4FY21. So we see a lot of uptick in the demand for APIs. That could be because of our scale, because of our quality compliance and sustainability, we are getting a lot of traction and high demand for our key first line APIs. If you look at our Q3,we have done Rs.568 crs ARV API sale.

We are confident to maintain that in the coming quarters.

Dr. Satyanarayana Chava:Our gross margin was little less in Q3 because of withdrawal of export incentives, and also higher logistics cost due to the COVID crisis. But we are confident that we'll be able to maintain the gross margin levels. Our operational leverage by increasing asset utilization is clearly visible by showcasing a consistent increase in our EBITDA margins as well.

Dr. Satyanarayana Chava: We also had some high gross margin APIs. We supplied significant volumes of APIs, including our ARVAPIs for launch in Europe and US. So that also contributed to higher margins in API division.

Dr. Satyanarayana Chava: Currently, we are using our capacities at the optimum level and our debottlenecking exercise will also be finished during Q4. And new capacities will be available from August onwards. So we are gearing up to meet higher demands. See, as I mentioned, we are looking at healthy top line growth. So we are cautious to get market share while we maintain our third-party API sale. So if you look at our ARV, we have done more API sale to third parties in ARVs rather than our formulations division. So we would like to maintain that strategy. Not to cannibalize our business by going aggressively into formulations as well.

Dr. Satyanarayana Chava: Efavirenz and its intermediates, we continue to have leadership position where we are making about 700, 800 tons in a year, if we look at, Efavirenz is 600 milligrams dose or 400 milligrams versus 50 milligrams of Dolutegravir. So the dosage is significantly low, but pricing is high. If you look at the franchisee of Efavirenz plus Dolutegravir in FY'20 and FY'21, we have done more sales in the franchisee than the last year.

Dr. Satyanarayana Chava: In the API market for ARV, even though many players who would have got approval from the global tender in the global fund, how many players are active in terms of supplying APIs?

Dr. Satyanarayana Chava: I think there are not many APIs which are pre-qualified by WHO but when it comes to formulations, there are about eight approvals right now for Dolutegravir-based combinations. And we believe we have reasonable market share in the formulations and largest market share in the APIs Dolutegravir.

Dr. Satyanarayana Chava: we are number three when it comes to the overall market share in the formulations.

Dr. Satyanarayana Chava: We have largest capacities installed and we have one of the cost-effective process, and we have regulatory approvals in place by WHO, by FDA. So we believe we will maintain our leadership position.

Dr. Satyanarayana Chava: There are two therapies which we have very strong focus and also building pipelines. The one is diabetes. The second one is cardiovascular. And we have a very good basket of products in diabetes right now. And we are building our strong basket in cardiovascular products as well. So these two will drive our growth in the coming years. If you look at the evolution from 80% to ARV APIs, in the five years we moved to 38% of ARV APIs. Similarly, our revenue dependency on ARV formulations currently is very high. But in the next five years, we will also diversify our revenues coming from non-ARV formulations significantly and the dependence on ARV will come down.

Because there are no new formulations to be developed in the ARVs, we are almost done with developments. So, development focus is shifting from ARV to non-ARV. And also, we are adding very large capacity in Vizag and we have taken land for formulations expansion in Hyderabad as well. So if you want to look at where we will be in say, three, four years down the line, I am sure we will be discussing on non-ARV in five years from now. If you look at the calls one and a half year back, half of the times people were asking questions on Efavirenz. Now nobody asks questions on Efavirenz. Two years from now people will not ask questions on ARV APIs. And maybe another two years from then people will not ask about ARV formulations, people may talk about what is we are doing in our Laurus Bio?, what growth we have in Laurus Bio?, what other therapy areas we will be focusing? What kind of delivery dosage forms we are doing?. So, company s in the transformation phase, so we need time and we are very confident to expand our portfolio beyond just ARV.

Dr. Satyanarayana Chava: Laurus Bio will be a CDMO for recombinant proteins, it could be food, or for therapeutics. Currently, the expansion going on at Laurus Bio to meet customer demand for recombinant protein-based foods. And we are looking at acquiring land, as I mentioned in my opening remarks, to expand that recombinant protein manufacturing capabilities, not only for food, but also for therapeutics. We are also identifying a lot of areas where the synergies could be built between our chemistry and fermentation capabilities of bio. So, the synergies are also looking very attractive. So, a lot will happen. And we will give you more details as and when we expand into new areas. That is very exciting for us.

Dr. Satyanarayana Chava: In our CDMO business, we have evolved very significantly in the last decade. In 2010, we need to explain about company first 15 minutes in the meeting. Now, we don't need to explain our capabilities. And we need not explain about our scale, we need not explain our sustainability. So we are recognized as a strong player in CDMO for high potent molecules, and in very large volume molecules. So people look at us on the two extremes, like our API also, we're doing high potent oncology molecules, and we're doing very large volume, diabetic and ARV molecules. CDMO, our efforts are also culminating in the same trend. People are looking at us for high potent molecules, which we have several molecules in pipeline. And we're also doing several tons of opportunity in commercial molecules. So although the number of small molecules in the development by big pharma is constant, I don't want to say going down, constant, and we have great opportunities there.

Dr. Satyanarayana Chava: We'll be talking about ANDAs in diabetes, ANDAs in cardiovascular and P4 launches, and maybe new dosage forms, currently we are doing only solid oral, maybe situation will change, we may enter into other delivery forms as well. So a lot of things are at the drawing board stage, and we're very comfortable to de-risk our dependence in ARV without compromising our growth in ARV. If you look at 80% ARV APIs company to 38% ARV companies, but our ARV API sales went up by Rs.500 crs from when we were 80% dependent to when we're 38% dependent. So you could understand how much of diversification is happening in the organization.

Dr. Satyanarayana Chava: It's not that significant investment. We do believe our subsidiary, Laurus Bio, will be able to generate its own cash to invest or raise its own debt to invest, because their margins are very attractive, sustainable, so we don't see any challenges to invest there. We do believe they're capable of raising money and if necessary, we can assist them.Tushar Manudhane:Secondly, particularly on the APIside, what is the capacity utilization?Is it that Brownfield expansion is getting delayed because of COVID,that will be operational from August '21?Dr. Satyanarayana Chava:Only formulation expansion was delayed during the crisis. But our API expansions are on track.Earlier,we used to say we are one of the top five API companies with respect to reactor volume. Now we can say we are number four with respect to ARV volume. Currently, we have 4.5 million liters of reactor volume and we are adding close to a million liters in the next expansion phase. So that will take us to 5.5 million liters reactor volume. That is a significant addition, almost 20% what we have, we're adding in next 12-months.

Tushar Manudhane:Lastly, on overall CAPEX guidance for next year?

Dr. Satyanarayana Chava:As we mentioned in the last quarter conference call, we envisage about Rs. 1200 crores investment over the next 24-months.We believe that is enough for our growth.We don't see any additional CAPEX required to meet our growth.

Krish Mehta:I wanted to ask what is the percentage of revenue this quarter which is non-ARV, all divisions put together?

Dr. Satyanarayana Chava:Maybe closer to 35%.

Krish Mehta:And another question I wanted to ask is about capital allocation going forward after the Richcore acquisition. So if you can give a sense of the split between how much CAPEX might be thinking of allocating between Richcore versus like our core ARV business?

Dr. Satyanarayana Chava:In the capital allocation, what number we just gave Rs.1200 crores is not inclusive of CAPEX envisaged to Laurus Bio. I think that is not going to be very significant, and they will be able to raise or interest from their own cash.

Sameer Shah:First question is in the opening remarks, you said that significant upsideis expected from EU partnerships from FY'23. If you can just elaborate on that?

Dr. Satyanarayana Chava:We have done validations for two products in the diabetic space. And we expect significant volume uptick in FY'23. And also, as we wanted to expand and diversify into non-ARV, that is the year where we expect significant diversification happens out of non-ARV.

Sameer Shah:Secondly, on the Custom Synthesis business, if you can give some idea of the funnel, in the last phone call, you mentioned that business will be on its own from next year onwards, so are there any significant orders under discussion?

Dr. Satyanarayana Chava:We have a lot of opportunities there. As we are not giving any guidance, we do expect to create dedicated R&D as I mentioned, we are creating dedicated site for the division. They will grow from FY’23 onwards significantly, and we are very excited about that growth in the division.

Dr. Satyanarayana Chava:Out of seven potential first-to-file, the earliest opportunities will be in 2025.

Tushar Bohra:Sir, just quickly to start with, taking forward from Jeevan's question, and linking back to your earlier answer, you mentioned that 2025 is when we see the FTF, and 2023 we expect significant diversification in the business on the non-ARV side as well as presumably, a lot of this diversification will be from regulated markets. So should we look at this as that we have a very clear growth visibility for the next two, three years even before the FTF start kicking in?

Dr. Satyanarayana Chava:Yes, see, the non-ARV growth coming from first time generic launches, which are not P4-related, and also launching very large volume, fully integrated formulations, which some of them are fine, some of them are under development. Our growth in formulations division is not dependent on launching our first-to-file products.

Tushar Bohra:And we had plans for injectables, I believe, it was highlighted in one of the earlier con-calls. Any updates on that front?

Dr. Satyanarayana Chava:We'll update you probably in the next couple of quarters as and when we have concrete timelines and ideas.

Tushar Bohra:On the capacity expansion side, so, we did almost Rs.1,300 crores revenue this quarter. Is it fair to assume that the current capacity is able to support this on an annualized basis, so, the 1,200 crores expansion that you see, none of it is in the numbers right now, so, that is a further growth possibility for us?

Dr. Satyanarayana Chava:We don’t give guidance, and wouldn’t want to comment on that.

Tushar Bohra:No-no, sir,I am not trying to reveal my hand here, I am just trying to understand that a) it is fair to assume that this 1,300x4 is the bare minimum, right. And then I would like to understand, how much of the CAPEX is already done and exactly from this point forward, how much CAPEX still needs to be done, which will fuel the growth for next two years? And if you can segregate that by division?

Dr. Satyanarayana Chava:We don't want to reveal division wise CAPEX, but we can tell you, every quarter we have capacity additions ever in the form of backward integration of intermediates, additional API capacities for existing products, additional API capacity for new products, formulation debottlenecking lines coming commercialization for formulation. These are coming at a regular pace and not coming in bunch, every quarter we have something coming handy for our growth.

Tushar Bohra:So in Q2, we mentioned that we will have capacity constraints that will obviously affect some of the profitability in Q3 and Q4 we should see the full effect of new capacity coming in. Now that we've said that there is a slight delay on the formulations side, we should expect that maybe Q1 will probably see the ramp up far better than Q4?

Dr. Satyanarayana Chava:Q4 also will be good

Tushar Bohra:If you can help us understand the long-termvision for your nutraceuticals, cosmaceuticals business, is there a potential to scale that part of the business into a much larger meaningful segment for us?

Dr. Satyanarayana Chava:See, nutraceuticals, cosmeceuticals business were added into our CDMO business because we are not in doing a commodity product, we are doing one product to one customer kind of business. So, we are doing a lot of business with very big companies. We don't want to name those because of confidentiality. We are working with who’s who in nutraceuticals and cosmeceuticals.

Tushar Bohra:A clarification on the number you mentioned. So this Rs.1200 crores CAPEX does not include the Richcore acquisition and possibly anything on the sterileside. Is it a fair assumption to make?Dr. Satyanarayana Chava:Yes.

Andre:Hi, this is Andre, Sangeeta's partner. One is, as far as the EBITDA margins are concerned, is it good for us to expect these to increase with time with the effect of operating leverage? And my second question was that in the FTF business, it was marginal QoQ line. Should we read anything into this or is this another variation?

Dr. Satyanarayana Chava:I think the slight decline in FDFrevenues from Q2 to Q3 is only order execution, and nothing significant there. And when it comes to EBITDA margins, as we mentioned, we can't give you a specific number, but we will keep on mentioning, we are confident to maintain 30% or more EBITDA despite our continued growth in our top line.

Sangeeta Purushottam:I had a follow up question, that when we're looking at the composition of business, in FDF, it's been sort of flattish like you mentioned in synthesis, and bulk of our growth has really come from the antiviralAPI, even within the generic API division we've seen oncofallen and other APIs stabilize. Now, what is outlook on Onco if other API and this is in Generics?These are the divisions which are really going to lead to a mix for you going forward.

Dr. Satyanarayana Chava:The Onco APIs will have revenues around Rs. 300, because we are not adding the oncology sales related to a CDMO business. This is a generic oncology APIs. And in other APIs, because significant revenue in other APIs is coming from contract manufacturing, so the sales will be bulky. So you might have seen in Q1, we have done Rs. 135 crores, in Q3, we've done Rs.100 crores,but in Q4, the sales will be bigger than Q3. So it is a timing of deliveries in other APIs.The products what we're validating in other APIs, will see commercial sale in FY'22 and there are a good number of APIs commercial suppliers in FY'23. The growth in other APIs is also very good attractive rate right now.

Sangeeta Purushottam:In the Generic Synthesis, I don't see any concerns in terms of growth. This is something where the numbers are picking up forward?

Dr. Satyanarayana Chava:InSynthesis, yes. Because of some delivery commitments to be done in Q4...Q4 was bulky last year and we expect Q4 will be bulky this year as well in the synthesis division. But if you look at our last three quarters, we have done Rs.100 crores in Q1, Rs.116 crores in Q2, Rs.127 in Q3, so it is growing, and we're very happy with thatgrowth.

Dipan Mehta:Can you give us an overview on the pricing scenario for tenders as well as the open market sales,are you witnessing any pricing pressure from year-on-year ago, quarter to now and even quarter-on-quarter?

Dr. Satyanarayana Chava:I think we indirectly answered this question.As we mentioned, despite of our growth in top line, we're able to maintain the EBITDA margin.That clearly gives an indication that quality of business is very good, and we are not compromising profitability for just top line growth. So we are comfortable right now and we expect we'll be able to manage the slight decline in prices by effective cost control measures by the way of procurement or operations improvement.We do expect the numbers will be good.

Dipan Mehta:But the margin can be maintained also because of change of product mix. So, my specific question is that for the same product, quarter-on-quarter can you give us some idea as to what the price declines have been in the range of 3% to 5% or in the range of 8%to 10% something give us an idea that what is the kind of pricing impact which may be there on the top line which has of course been covered by better cost management and improving on the product mix?My question is around for the same type of products,molecules on an average basis what would be the price decline,I am not asking product wise,overall for the company on an aggregate basis,something to give us an idea as to what we are dealing with in terms of price erosions?

Dr. Satyanarayana Chava:Our sales in US and Europe is a quarter of our formulations sales and we are not seeing any price decline significantly there. And when it comes to the LMIC, ARV segment because these tenders are not weekly tender or monthly tender,pricing are reasonably stable over a period of a few quarters. So there is no pricing decline for every tender.Moderator:Thank you.

Ranvir Singh:Can you give me a break up of finished doses between ARV and non-ARV?

Dr. Satyanarayana Chava:As I mentioned, it is 75%and 25%.

Ranvir Singh:Now this is for advanced countries and...?

Dr. Satyanarayana Chava:Yeah, yeah, our LMIC sales are predominantly ARVsand then Europe and North Americaarenon-ARVs.

Ranvir Singh:Okay, but TLE600 we had rollout in US as well, right?

Dr. Satyanarayana Chava:That's not a very significant sale.

Ranvir Singh:I think previous participant has already asked this, but just in general, because the selling price of TLD is $75 and people were selling it at a discount,so, this discount has increasingly been higher,the tender price is much-much lower than what the selling price is versus last year or how is the trend there,in general for industry for all players I wanted to understand?

Dr. Satyanarayana Chava:You have to look at how much of backward integration people are doing. If somebody buys APIs and participation in tenders,somebody buys intermediates and make APIs and participate in tenders. Somebody makes starting materials and make intermediates and APIsand participate in tender.So the profitability margins depend on where they stand. So for integrated players like ours, we have biggest advantage of maintaining profitability versus people who are non-integrated by APIs, and do formulations. Some people even don't do formulations, some people outsource formulations manufacturing by buying APIs and giving it to somebody else for formulations. For those companies, the profits will be even less. So you have to look at how integrated the offering in ARV is more important to maintain profitability, just not the top line.

Ranvir Singh:Just a clarity aboutRichcore revenue is built in this quarter.Any amount or it's not at all?

Dr. Satyanarayana Chava:Norevenue or profitability included in Q3,probably we will do it from Q4 onwards.

C Srihari:Recently,one month injectable has been approved by the USFDA. I would like to know what kind of impact that could have on the ARV portfolio? And on the FDFfront, could you give some kind of just outlook?

Dr. Satyanarayana Chava:Maybe I'll answer your long acting injectables business. So, we are in ARV business sincelast two decades and we are watching the developments very carefully. And if there is a disruption, we want to be part of the disruption rather than follow it. As you could see, the transition from Efavirenz, Dolutegravir,we took benefit out of that disruption.And even if Tenofovir will move to another low dose Tenofovir Alafenamide, we have approvals in place and we have another combination products under development, which we are filing probably next week. And if there is a long acting injectable will enter market.When and how will be depending on the WHO guidelines which are not yet released.And even if it is as part of the treatment guidelines, it will be not before 2025 and we have the APIs developed already and depending on the guidelines, we will develop formulations and if there is a disruption because of this, I am sure we will be part of that. So you can be rest assured on that.

C Srihari:You mentioned that the quarterly run rate is sustainable. So, what is the kind of growth guidance you will give for FY'22 for the ARV business? Dr. Satyanarayana Chava:We're not giving specific growth, but we are comfortable to say we will continue to grow in API business not only FY'21 but also in FY'22.C Srihari:On the FDFfront, would it be possible to give the volume share? You said 25% of the revenue comes from the developedmarkets.

Dr. Satyanarayana Chava:I can't give you those details. If there are very specific questions, please write to us and we are happy to share you the details.

C Srihari:The 25%, how do you see moving over the long-termnext two to three years?

Dr. Satyanarayana Chava:We will increase that share ofrevenue coming from Europe or North America than what we have today significantly because of productslaunch planned which are non-ARV. So that revenue share will go up.

Charulata Gaidhani:If you could give byproduct, the traction in ARV API?Dr. Satyanarayana Chava:The majority growth in ARV APIs sales came from our three core products–Tenofovir,Lamivudine, Efavirenz and Dolutegravir. All four products sales have increased significantly.

Charulata Gaidhani:Second question pertains to the Europe partnership.Have you filed for marketing authorization?

Dr. Satyanarayana Chava:It is a very interesting question. Our partner had marketing authorizations.We are becoming their contract manufacturer as an additional site. So the approval will be much easier. So our growth in those products in FY'23 has nothing to do with approvals. So our facility was approved by European authorities and products are approved by the authorities and we are becoming a contract manufacturer to them, where we make APIand also formulations for them.

Charulata Gaidhani:Can you name the partner?

Dr. Satyanarayana Chava:No.

KRITI INDUSTRIES LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-27T09:31:00.003-08:00

KRITI INDUSTRIES LTD

Q3 FY 21 RESULTS ANALYSIS

PVC PIPE MANUFACTURER

15+ STATES & UTs

32+ACRES - STATE OF ART PLANT

600+ DEALERS & DISTRIBUTORS

800+EMPLOYEES

Kriti Industries (India) (in Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	221	90	155	71	151	47	146
Raw Materials	138	90	94	57	94	47	53
RM%	63	100	61	81	62	0.59	-37.6
Interest	2.92	2.32	2.94	4.54	4.52	-35.4	25.86
P B T	23.72	7.25	9.32	1.99	5.66	319.08	227.17
Tax	5.97	1.74	2.47	-4.5	2.17	175.12	243.1
N P T	17.8	5.51	6.84	6.49	3.49	4096	222
NPT MARGIN	8.03	6.12	4.4	9.14	2.31	247.62	31.21
Equity	4.96	4.96	4.96	4.96	4.96	0	0
Basic EPS	3.58	1.11	1.38	1.31	0.7	411.43	222.52

Yearly Results of Kriti Industries (India) (in Rs. Cr.)	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Net Sales	534	569	428	365	462
RM%	75.83	84.19	82.14	80.59	78.94
Raw Materials	405.09	478.74	351.26	293.74	364.88
Interest	17.26	14.77	12.53	12.08	15.85
P B T	21.56	10.47	14.1	13.24	19.32
Tax	2.32	3.85	4.87	4.37	7.63
Net Profit	19.24	6.62	9.22	8.87	11.69
NPT MARGIN	3.6	1.16	2.16	2.43	2.53
Equity	4.96	4.96	4.96	4.96	4.96
Reserves	98.84	80.33	74.61	65.39	57.53
Equity Dividend (%)	15	15	15	15	18
Basic EPS	3.88	1.33	1.86	1.79	2.36

MP 57.95

PE 4.05

52 Week Range 10 70.95

Volume 66,571

3 year CAGR growth

Revenue 12.30%

Net Profit 30.40%

Operating Profit 15.80%

Price Performance

1 Week -1.11%

1 Month -0.94%

3 Months 61.20%

1 Year 194.91%

3 Years 11.34%

STRENGTHS

Promoters increasing shareholding QoQ

Rising Net Cash Flow and Cash from Operating activity

Company with high TTM EPS Growth

Strong Annual EPS Growth

Good quarterly growth in the recent results

Growth in QUARTERLY Net Profit with increasing Profit Margin (QoQ)& (YOY)

Book Value per share Improving for last 2 years

Company with Zero Promoter Pledge

Recent Results : Growth in Operating Profit with increase in operating margins (YoY)

rising net profit margins - quarterly as well as TTM basis

OPPORTUNITIES

current TTM PE Ratio less than 3 Year, 5 Year and 10 Year PE

Profit making Companies with High ROCE and Low PE

Negative to Positive growth in Sales and Profit with Strong Price momentum

Highest Recovery from 52 Week Low

Stock with Low PE (PE < = 10)

Shareholding Pattern

Promoters have increased holdings from 66.16% to 66.34% in Dec 2020 qtr.

Institutional Investors holding remains unchanged at 0.0% in Dec 2020 qtr

Kriti Industries LTD.(KIL) was founded in 1982. The trusted choice of experts, farmers and common man, its brand kasta is one name that resounds to all. With the capacity of 1,10,000 tonnes per annum, KIL offers the most extensive range of plastic products in india. KIL manufactures premium quality piping products and solution, accessories, gas piper, telecom ducts, submersible pipes and casing pipes.

Group governance

Kriti Group comprises three companies of Kriti Industries (India) Limited, Kriti Nutrients Limited and Kriti Auto Engineering & Plastics Pvt. Limited.

Its focus has been on adopting modern, state of art technology, building sales with strong distribution network and continuous product up-gradation by its team in close association with its key customers.

It cater to customers in Food, Feed, Pharma and Confectionery for soya value added products. The group also provide extruded and moulded plastic products for agriculture, horticulture, infrastructure for various industries and for FMCG Automobile industry. Kriti’s marketing network is spread deep down from large to small towns in over 15 states of India. Kriti’s products are exported to almost all countries in South East Asia, China, Japan and Europe.

Kriti is planning to extend its reach to individual customers to enhance its B&B share in total business volume. It is also planning to add newer Food products for its retail sales network.

Having introduced Inline drip systems, Kriti is increasing its product offering for agriculture, horticulture and infrastructure segments.

Kriti also plans to introduce new products for providing comprehensive plumbing solutions.

Kriti is in an exciting phase of its journey and is poised to leap miles ahead. We are looking to your continued support in this journey.

Businesses

The Company is engaged in the manufacture of polymer pipes.

These comprised Poly Vinyl Chloride (PVC) and Poly Ethylene (PE) used in the downstream applications of potable water supply, irrigation, building construction and infrastructure.

The Company widened its product range to address a majority of sizes (small to large diameter across classes and ratings).

The Company possesses the capability to manufacture a variety of complementary PVC/HDPE fittings

Presence

The Company’s headquarters are based in Indore; its manufacturing facility is located in Pithampur. The Company’s sales footprint extends largely across Madhya Pradesh, Rajasthan, Maharashtra and Telangana.

The Company enhanced its focus in additional states during the year under review, broad-basing its national presence and addressing a larger addressable national market.

Performance

The Company registered revenues of Rs.536.08 crore and Profit after Tax Rs.19.23 crore. The Company reported a cash profit of Rs.26.95 crore and EBITDA margin of 8.89% in 2019-20.

MANAGEMENT

Mr. Shiv Singh Mehta : Chairman & Managing Director

Mr. Saurabh Singh Mehta : Whole Time Director

Mrs. Purnima Mehta : Director

PRODUCTS

Agriculture

Micro-Irrigation

Building Products

Industrial Solutions

ANNUAL REPORT 2019-20

Margins growth

A focus on value-addition, superior products and the ability to capitalise on raw material price movements widened margins.

Profitable growth

The Company reported revenues of Rs.536.08 crore in FY 2019-20 in spite of a slowing economy, while generating an EBITDA Rs.47.68 crore.

Outperformance (%)

Revenues declined 6% on account of lower raw material prices while EBITDA grew 53%.

Revenue decline 6%

EBITDA growth 53%

PAT MARGIN

FY2018-19 1.16%

FY2019-20 3.62%

Lower debt

We focused on the repayment of long-term debt that strengthened our liquidity for the moment and our credit rating for the future (influencing our overall cost of mobilised finance).

Long-term debt

FY2018-19 29.95 CR

FY2019-20 23.32 CR

MARKET COVERAGE

We focused on increasing our long-term presence in Maharashtra and Telangana through a deeper presence across a larger number of districts.

The Company’s interest cover weakened from 2.96 in FY2017-18 to 2.52 in FY2018-19 but revived to 3.19 in 2019-20. This was largely on account of superior cost management and payback from projects

The Company’s debt cost was higher at 10.68% in FY2019-20. This ratio should ideally be read in conjunction with net debt/operating profit (an increase indicating higher liquidity)

The future

(i) enhance plant utilisation by expanding markets and applications.

(ii) market a large volume in Maharashtra at non-discounted realisations;

(iii) enter different sectors (gas and building products) to service multiple growth drivers - to sell our products through the year.

(iv) The offtake of polymer pipes with agricultural applications is growing year on year, largely independent of the country’s economy. The replacement of steel pipes with polymer equivalents is growing and extending to the 1200 mm diameter segment. The penetration of pipes is only 45% of the total market, indicating a vast multi-year head room. (iv) Indian government announced a major initiative to grow the national gas grid network within a time-bound programme, which is expected to translate into an unprecedented demand for polymer gas pipes;

(v) the Company intends to widen its portfolio to building pipes, addressing the large real estate sector. (vi) country’s water table is high following an extended 2019 monsoon, which augurs well for the offtake of polymer pipes.

(vi) possesses an under-borrowed Balance Sheet, low exposure in the building products and gas segments that can only grow from this point onwards, sound credit rating, short receivables cycle, adequate manufacturing capacity, credible quality certifications and a trusted brand to widen its presence from one to three downstream sectors.

(vii) Company has invested in data analytics and information sharing; the concurrence of a number of improvement-centric projects augurs well for our productivity.

(viii) Company is optimistic that this measured approach should translate into the Company growing to Rs.1200 crore revenues by 2023 derived through a deeper presence in the States of our existing presence and the addition of Karnataka.

(ix) It took a number of years to grow to more than 500 crore in revenues; Now, company expects to more than double our revenues in a fraction of the time, enhancing value for all our stakeholders

The Company’s revenues were Rs.536.08 crore in 2019-20, while reducing long-term debt by 30.19%, strengthening the platform of the Balance Sheet to sustain multi-year growth.

Irrigation investments: The government has allocated Rs.2.83 lakh crore for agriculture and allied activities, irrigation and rural development in the Union Budget 2020-21.

Government policy: The government intends to double farm incomes by 2022. Favourable policies like the Pradhan Mantri Krishi Sinchai Yojana, Swachch Bharat Mission and introduction of more Smart Cities are projected to catalyse the demand for PVC pipes. Telecom: The optical fibre market in India is projected at US$ 424 million by 2020 on account of growing adoption of smart phones, broadband services and 5G rollout. The optic fibre cable comprises tens of strands of glass fibre, each no thicker than a human hair and capable of transmitting the entire Encyclopedia Britannica’s contents in less than a second. (Source: TechSci Research).

Piped gas: Following the completion of the ninth city gas distribution bidding round, city gas distribution would be available in 178 GAs comprising 280 districts spread over 26 States and Union Territories covering more than 50% of India’s population and 35% of its GA. India also launched the tenth city gas distribution bidding round in 50 GAs spread over 124 districts in 14 States to potentially reach piped gas to 200 lakh households.

Kriti’s Competitiveness Holistic: Kriti Industries has graduated from a water transmission products company to a fluid transportation products company. The extrusion of polymer products is being adapted to other areas (gas and optic fibre cables).

National relevance: We grew our business in national priority areas likely to attract government policies and consumer traction. In view of this, our polymer extrusion business addresses increasingly relevant downstream interventions (water transmission, gas transportation and optic fibre ducts).

Broadbasing: We believe that any-market competitiveness is derived from business broadbasing. the Company broadbased its manufacturing infrastructure through capacity addition, widened its products portfolio, expanded its geographic footprint and intends to widen its presence across downstream sectors (beyond water transmission).

State-of-the art: The Company consciously invested in state-of-the-art manufacturing facilities - a higher one-time investment in exchange for a sustainable advantage (productivity, quality and efficiency). Financial conservatism: The Company believes in any-market competitiveness derived from a conservative Balance Sheet. The Company invested in building its business through accruals, paying down long-term debt and moderating its receivables.

Brand: The Company invests 1% of revenues in brand building. It generates about 76% revenues from trade partners who retail to consumers. The Company’s Kasta brand generates a consumer pull without any price discount. The brand stands for positive attributes (‘Expert ka vishwaas’, ‘bharosa’, ‘superior’, ‘best’ and ‘peace of mind’).

One-stop: The Company is a one-stop provider of polymer extruded products – from 20 mm to 710 mm diameter and applications extending from water to drip irrigation to gas to telecom. This has enhanced our share of the primary customer’s wallet (distributors). Manufacturing capacity: The Company broad-based its manufacturing capacity by 25% in 2018-19 and kept its capacity at a constant in 2019-20. This is one of the largest capacities at a single location across the polymer pipe sector in India. This capacity has been structured for peak requirement during the post-monsoon season. The plant usually operates at peak utilisation during this period. The objective of the Company is to enter new sectors with round-the-year applications that could strengthen the Company’s capacity utilisation (and profitability).

Product portfolio: The Company’s portfolio comprises a range of PVC pipes and fittings, strengthening its recall as a one-stop solution provider. This has increased the Company’s ability to address a larger share of the customer’s wallet. The proportion of fittings (value-added) accounted for 5.20% of the turnover during the year under review.

Product mix: The Company leveraged its rich experience in product design and manufacture to graduate to larger-diameter pipes. The Company possesses capabilities to manufacture pipes up to 710 mm diameter, addressing larger water throughput requirements and larger government outlays. The Company also developed larger diameter pipes addressing the gas sector.

Value-added: The Company is a value-added player in a commoditised space. The Company manufactured products addressing the highest quality standard and generating a premium. Value-added fittings accounted for 6% of the Company’s revenues.

Quality: The Company manufactured around a high consistent quality standard (across narrow tolerances), resisting the use of a lower price/quality of raw material to enhance profitability. This addressed the growing emergence of discerning farmers who would prefer to invest in a premium quality product when making a long-term capital expenditure (as opposed to buying low-priced products of suspect quality).

Location: The Company is present in Madhya Pradesh where 70% of the state’s population depends on agriculture.

Geographic footprint: The Company’s geographic broadbasing extended from a longstanding presence in Madhya Pradesh, Rajasthan, Uttar Pradesh and Haryana to contiguous states like Maharashtra and Telangana, the most decisive expansion after 35 years of being present principally in two Indian states.

The organisation has matured to a point – scale, brand, bandwidth, distribution and Balance Sheet – where a wider geographic footprint will accelerate its competitiveness and transform it from a regional brand into a multi-zonal organisation and pan-India presence. Micro focus: The Company has treated each district as a unique market, helping map the growing needs of individual farmers. The Company is directly present through trade partners at tehsil levels (as opposed to taluka levels for most). The result is that the Company is a market leader in Madhya Pradesh (65%) and Rajasthan (45%).

Distribution radius: The Company is engaged in the manufacture of a hollow product, making it competitive to market as close to the plant as possible. The Company prefers to route products out of the single unit but deliver with speed to its primary customers (trade partners). The Company maximised sales within 500kms of its manufacturing facility.

Distribution intensity: The Company does not just market products wide; it has also selected to market products deep within its existing footprint. This priority has been manifested in the Company reaching products down to towns, enhancing proximity to consumers and making it a preferred vendor.

Contiguous growth: The Company believes in incremental geographic expansion: from one district to the contiguous other, leveraging economies of brand spending, distribution presence and managerial bandwidth.

Customer mix: The Company is largely a retail-focused company, accounting for 76% of revenues in 2019-20. The institutional sales generate volumes marked by long receivables; the rest of the business is largely cash and carry, strengthening the Company’s cash flow.

Sectoral mix: The Company is broad-basing its personality beyond water transportation applications towards fluid transportation. The Company intends to manufacture extruded products for application in the rapidly growing gas sector. The Company will manufacture pipes of a larger diameter for this application.

Primary customers: In the Company’s markets of Madhya Pradesh and Rajasthan, the primary customers (trade partners) are Kasta’s biggest ambassadors: they have worked with the Company for years, experienced virtually no product returns and provided the opportunity to add other dealerships to their profile. The result is that the Kriti associated has proved beneficial for their respect, status and business. The Company embarked on the creation of a similar network in the new States of our presence through a prudent selection of distribution partners based on their integrity, financial depth and long-term commitment to the business.

New market selection: The Company entered new States that represent the springboard of its future, accounting for a sizable share of the Indian extruded polymer products market. Some of these States have been affected by drought and erratic monsoons, making water storage and transmission imperative for agricultural survival.

BAJAJ HEALTHCARE LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-24T05:00:00.003-08:00

BAJAJ HEALTHCARE LTD

Q3 FY 21 RESULTS ANALYSIS

About Bajaj Healthcare Limited

Bajaj Healthcare Limited is a leading manufacturer of APIs, Intermediates and Formulations established in the year 1993.

It specializes in manufacturing of of Amino Acids, Intermediates, API, formulations & Nutraceuticals.

The company has state-of-art manufacturing facilities, of which 6 units are dedicated to APIs, 2 units to Intermediates and 1 unit for formulations.

These facilities are designed to meet the requirements of both advanced as well as emerging market opportunities.

BHL has a strong presence globally in countries like Europe, USA, Australia, Africa, Middle East and South America.

Management

Sajankumar R Bajaj Chairman & Managing Director
Anil C Jain Managing Director
Rupesh H Nikam Whole Time Director & CFO

Financial Performance

Comparison –Q3FY21v/s Q3FY20

Revenue from operations increased by79.64% from Rs.992.7mn in Q3FY20 to Rs.1783.34mn in Q3 FY21 mainly driven by strong performances of our products across the board.

 The EBITDA increased by 3.4xfrom Rs.134.91mn in Q3FY20 to Rs.458.16 mn in Q3FY21 led by surge in sales of value added and high margin products.

EBITDA Margin (%) increased to 25.44% from 13.57%

 Finance cost increased merely by 16.26% from Rs.16.55mn in Q3FY20 to Rs.19.24mn in Q3FY21 despite of sales growing by 80%

 Net profit stood at Rs.264.23mn in Q3FY21, compared to 61.96mn in Q3FY20

 PAT margins increased to14.67 % in Q3FY21 from 6.23% in Q3FY20

Financial Comparison

Summary of 9M FY21 v/s 9M FY20

Income from operation recorded a growth by 80.03% from Rs 2,915.12mn in9MFY20 to Rs.5,248.02mn in 9 M FY21mainly driven by strong performances of the key product lines.

 The EBITDA increased by 3.3x from Rs.319.38mn in 9M FY20 to Rs.1,064.67mn in 9M FY21and EBIDTA margins expanded by almost 1.8xfrom 10.94 % in9M FY20 to 20.10% in 9M FY21 led by surge in sales of value added and high margin products.

Net profit stood at Rs.618.31 mn in 9M FY21, compared to Rs.126.73mn in 9M FY 20 recorded an absolute growth of 4.9x

Recent notable Developments

A. Product Developments

BHL has successfully executed pilot scale batch for two new API’s i.e. Methyl dopa & Acyclovir in therapeutical segment;

a)Methyldopa is a prodrug and is metabolized in the central nervous system, works by relaxing blood vessels so blood can flow more easily. It is used to treat Lowering high blood pressure, helps prevent strokes, heart attacks, kidney problems. Dizziness, light headedness, drowsiness, headache, stuffy nose, and weakness are some common side effects that may occur.

b) Acycloviris a synthetic analog of the purine nucleoside, guanosine, with potent antiviral activity against herpes simplex virus’s type 1 and 2, varicella-zoster virus and other viruses of the herpes virus family. It is used to treat infections caused by certain types of viruses. Nausea, diarrhoea, headache, or vomiting are some common side effects that may occur.

B. Commercial Updates

Update on Production Linked Incentive (PLI) Scheme

Production linked incentive (PLI) scheme intends to boost domestic manufacturing of identified Key Starting Materials (KSMs)/Drug Intermediates (Dis) and Active Pharmaceutical Ingredients (APIs) in India.

BHL has submitted application under the PLI scheme for manufacturing of some key APIs / Intermediates with the GOI. Applications for the schemes closed on 30th November 2020, and awaiting approvals from respective authority.

The production-linked incentive (PLI) schemes received 215 applications from 83 bulk drug makers and 28 applications from 23 medical device manufacturers, the department of pharmaceuticals said.

A maximum of 136 applications for bulk drugs and 28 applications for medical devices will be approved.

Updates on manufacturing facilities acquired from Saraswat Co-operative Bank Limited:

BHL had acquired manufacturing facilities from Saraswat Co-operative Bank Limited under the SARFAESI Act., for a purchase consideration of Rs.610 million

BHL would be manufacturing API’s like Mefenamic Acid, Arthemether Lumefranrine, Aceclofenac, Albendazole and Nimesulide at the above facilities.

These API’s are primarily used in pain management, anti-malaria and tapeworm infection.

BHL in its endeavor to move up the value chain, is revamping its existing 3 API manufacturing facilities of Nutraplus India Limited. The revamp, which is underway and expected to be completed by February 2021.

BHL expect the commencement of production to start from April 2021.These facilities would considerably enhance BHL’s capacity to address the international market and meet demand surges from the domestic market

Update about factory premises situated at Plot No. N-178, MIDC, Tarapur: Maharashtra

Pollution Control Board (“MPCB”) has issued a notice dated January 14, 2021 directing the closure of operations at the above Unit situated at Plot No. N-178, MIDC, Tarapur, Boisar 401 506 for alleged violation of the provisions of Water (Prevention and Control of Pollution) Act, 1974, Air(Prevention and Control Pollution), Act, 1981 and the Rules made there under.

BHL’s above said unit admeasured to 1000 sq. mtrs, with an installed capacity of 20MTPA. Production at this unit is restricted to small volume of intermediates, which do not contribute significantly to the sales. BHL has undertaken necessary measures to ensure business continuity of the products being manufactured at this facility.

The manufacturing of these products is being transferred to other units and all necessary steps have been taken to avoid any short comings and overcome any consequences.

BHL’s major priority and focus would be to get the unit back in operation and expect the unit to be in operation within 15 days.

Accordingly, BHL has taken necessary steps to provide an appropriate response to the said notice. BHL stands by its commitment to long term sustainability and ethical way of doing business.

Fire accident dt 13-02-20 at Tarapur Unit

There was a minor fire accident at one unit situated on Plot no. N-128 at M.I.D.C, Tarapur, Maharashtra in the first half of. February 13, 2021.

Due to prompt action by alert staff the fire was brought under control and no substantial loss of property or injury to human life has occurred in the incidence.

However, the Company is ascertaining the extent of loss and has already informed to the Insurance Company as the entire factory and goods therein are adequately insured. Company is taking steps to ensure normal operation at the plant at the earliest. Any further material development in this regard will be updated

Updates on Generic business:

BHL has planned to enter into Generic Market and also has identified several products to launch in a phased manner. This segment will cover all major therapeutic segments like Chronic, Acute and Dermatological range of products.

BHL expects that revenue from generic division to commence from the first quarter of FY 2021-22

Around 1.7xofY-o-Y growth(9 months)in the API segment was mainly on account of strong performance & growth from our leading APIs. Formulation segment revenues grew by around 3xon a Y-o-Y (9 months)basis on the account of business from our existing clients and addition of few new clients”

Guidance for FY21

BHL expects to deliver similar uptick in revenues for Q4 FY21 on account of accelerated growth in sales volume mainly driven by upsurge in demand for few of our key products in the API segment.

Addition of new capacities and product’s will further add fuel to the growth of the company.

BHL has reported healthy upside in EBITDA margins for nine months ending December FY20 and further expects margin accretion in line with their expectations and guidance given by the management, this will be mainly attributed to further backward integration, volume growth and better realisation from BHL’s key products

QUARTERLY RESULTS :

Quarterly Results of Bajaj Healthcare Ltd (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	178.33	206.63	139.83	118.5	99.27	79.64	-13.7
Raw Materials	118.02	154.24	103.88	89.65	76.71	53.85	-23.48
Interest	1.92	2.17	2.05	1.39	1.65	16.36	-11.52
P B T	39.94	28.26	20.43	14.01	9.23	332.72	41.33
Tax	13.51	8.14	5.14	4.41	2.85	374.04	65.97
Net Profit	26.42	20.12	15.29	9.6	6.38	314.11	31.31
Equity Share Capital	13.8	13.8	13.8	13.8	13.8	0	0
Basic EPS	19.15	14.58	11.08	6.96	4.62	314.5	31.34

MP 465

PE 6.07

VOLUME 7091 VERY LOW

52 Week Range 185 600

TECHNICALS

VERY BEARISH

Face Value 10

Price Performance

1 Week -3.24%

1 Month -1.26%

3 Months 0.57%

YTD 4.31%

1 Year 102.17%

3 Years 145.54%

AJANTA PHARMA LIMITED - Q3 FY 21 RESULTS ANALYSIS

2021-02-24T04:57:00.005-08:00

AJANTA PHARMA LIMITED

Q3 FY 21 RESULTS ANALYSIS

About Ajanta Pharma Limited

Ajanta Pharma is a speciality pharmaceutical formulation company having branded generic business in India and emerging markets, generic business in US and institution business in Africa.

Many of company’s products are 1st to market and are leading in their sub-therapeutic segments.

Company’s state of the art R&D centres for formulation development and API are located at Mumbai.

Company has 8 world class manufacturing facilities located in India and Mauritius.

Recently Company has commercialised its sterile eye drops manufacturing block at Guwahati.

For last 10 financial years, company has posted healthy performance with its consolidated total income growing at 20% CAGR and net profit at 28% CAGR.

Q3 FY 2021 performance highlights (compared to Q3 FY 2020)

 Revenue from operations at Rs. 749 cr. against Rs. 651 cr.; up 15%.

· EBITDA at Rs. 242 cr. against Rs. 186 cr.; up 30%; EBITDA at 32% of revenue from operations.

 Profit after tax at Rs. 177 cr. against Rs. 108 cr.; up 64%; PAT at 24% of revenue from operations.

9 Months FY 2021 performance highlights (compared to 9 Months FY 2020)

 Revenue from operations at Rs. 2,133 cr. against Rs. 1,906 cr., up 12%.

 EBITDA at Rs. 747 cr. against Rs. 532 cr.; up 41%; EBITDA at 35% of revenue from operations.

 Profit after tax at Rs. 495 cr. against Rs. 339 cr., up 46%; PAT at 23% of revenue from operations.

India

Q3 FY 2021, India sales was Rs. 220 cr. (against Rs. 195 cr.), up 13%.

9M FY 2021, India sales was Rs. 595 cr. (against Rs. 592 cr.), up 1%.

As per Iqvia MAT December 2020, we have posted healthy growth of 13% in Cardiology (segment growth of 14%), 2% de-growth in Ophthalmology (segment de-growth of 3%), 3% growth in Dermatology (segment growth of 4%) and 14% growth in Pain Management (segment de-growth of 1%).

Exports

Q3 FY 2021, total export sales were Rs. 524 cr.(against Rs. 448 cr.) posting growth of 17%.

Segment wise break-up is given below:

Emerging market

branded generic Sale was Rs. 286 cr. against (Rs. 240 cr.) posting 19% growth.

US Generic Sale was Rs. 161 cr. (against Rs. 159 cr.) posting 1% growth.

Africa Institution Sale was Rs. 77 cr. (against Rs. 49 cr.) posting 58% growth.

9Months FY 2021, total export sales were Rs. 1,506 cr. (against Rs. 1,300 cr.) posting growth of 16%. Segment wise break up is given below:

Emerging market

branded generic Sale was Rs. 851 cr. against (Rs. 726 cr.) posting 17% growth.

US Generic Sale was Rs. 464 cr. (against Rs. 372 cr.) posting 25% growth.

ANDA Status as on 31-Dec-2020

Cumulative Approvals (incld. TAs) 42

Commercialised 36

Under Approval 18

Approvals (FY2021) (incld. TAs) 9

Filing (FY 2021) 2

TA – Tentative approval

Africa Institution Sale was Rs. 191 cr. (against Rs. 202 cr.) posting 5% de-growth.

R&D

During Q3 FY 2021, R&D expenses were Rs. 40 cr., (Q3 FY 2020 Rs. 35 cr.) which is 5% of revenue from operations.

During 9 Months FY 2021, R&D expenses were Rs. 100 cr. (9 Months FY 2020 Rs.114 cr.) which is 5% of revenue from operations.

INVESTORPRESENTATION

Q3 FY 2021 2ND FEBRUARY 2021

Content

1.India Business2.Global Business 3.Infrastructure 4.Financial Highlights

1.INDIA BUSINESS

INDIA BRANDED GENERICS

15 Divisions for 4 segments

270+ Product Basket

1st to Market Products

3,000+ MRs = Building Efficiency

Continue to Focus on 4 Therapeutic Segments

· Dermatology : Growth recovering (3% Growth)

· Pain Management : Consistently Performing well (14% Growth)

· Cardiology : Growth Recovering (13% Growth)

· Ophthalmology : 2nd largest in India (-2%)

· Overall Pharma Market in Dec 20 : 5% Growth for Ajanta; 4% for IPM

INDIA SALES : 220 CR(13%) IN Q3 FY 21; 595 CR IN 9M(1%)

India Ranking : Opthal :2; Derma : 15; Cardio : 18; Pain :34; Overall Ajanta : 29;

GLOBAL BUSINESS :

Branded Generic Emerging Markets:

Product Registration : 1300+

Countries across Asia & Africa : 29

Customised Product Market : 200+

Broader Therapeutic Segments

Anti Malaria; Antibiotics;Gynecology; Vitamins; Gastro;Anti-Histamines; Respiratory;Neurology; Ophtholmology; Pain

USA

42 Final Approvals; 9 in 9M FY 2021; 18 under approval36 products on shelf;3 products launched in Q3; Focus on sound execution for customer delight;

Export Sales in Q3 Consolidated :

From 448 cr to 524 Cr;YoY; 17% up Total Exports;

Branded Generics :240 cr to 285Cr 19% Up;

US Generics from 159 Cr to 161 Cr; 1% up YoY

Institution : 49 cr to 77 cr 58% Up

Total Consolidated Sales - Q3

India 13% Up YoY from 195 cr to 220 Cr (1% in 9M)

Exports 17% Up YoY from 448 Cr to 524 Cr (16% in 9M)

Total Sales 35% Up YoY from 643 Cr to 744 Cr(11% in 9M)

Overall - India Growth 13%;Exports Growth 17% and Total sales growth is 17%

3.INFRASTRUCTURE

Formulation Mfg :

3 facilities in Aurangabad MH;

1 at Dahej,Guj; 1 at Guwahati;

1 at Pithampur, MP;

1 At Mauritiuous

API Mfg :

1 at Waluz, Aurangabad, MH (Captive consumption)

R&D :Rs.40 CR (5%) in Q3; Rs.100 Cr in 9 M(5%)

R&D spend excl Capex was 164 CR(6%) in FY 2020.

4. FINANCIAL HIGH LIGHTS :

Q3 consolidated FY 2021

Exports : 524 cr (17% Up)

Domestic : 220 cr (13% Up)

Revenue from operations : 749 Cr (15%Up YoY

EBITDA : Rs.242 Cr; 30% up

PBT : 215 Cr; 23% Up

PAT : 176 Cr; 64% Up

Total Comprehensive Income : 176 Cr ; 61%

PAT is 24% of Total Income

5 Year Track Record : (Consolidated )

Total Income has grown from 1771 Cr(2016) to 2026 (2017) to 2155 cr (2018);to2076 cr(2019); to 2680 Cr (2020)

PAT has grown from 416 cr(2016) to 507 cr(2017);to 469 Cr (2018); to 367 cr(2019) to 468 cr(2020)

PAT Margin was 24%(2016);26%(2017); 22%(2018); 19%(2019);18%(2020)

ROCE WAS 43%(2016); 40%(2017);29%(2018); 22% (2019); 22% (2020)

Ajanta Pharma (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	748.74	715.91	668.2	681.96	651.21	14.98	4.59
Raw Materials	192.06	188.63	153.87	173.53	138.34	38.83	1.82
P/L Before Tax	215.47	249.24	206.69	175.86	175.1	23.06	-13.55
Tax	38.84	79.02	58.93	46.7	67.55	-42.5	-50.85
FINAL NPT	176.63	170.22	147.76	129.16	107.55	64.23	3.77
Equity	17.39	17.54	17.54	17.54	17.54	-0.86	-0.86
Basic EPS fv 2	20.41	19.51	16.93	14.8	12.33	65.53	4.61

MP 1775.1

PE 21.74

52 Week Range

961

1,878.00

L H

Volume

95,730

Book Value Per Share 300.26

Shareholding Pattern

Promoters unpledged 0.89% of shares in last quarter. Total pledge stands at 15.17% of promoter holdings

Promoters have decreased holdings from 70.51% to 70.34% in Dec 2020 qtr

Mutual Funds have decreased holdings from 9.93% to 9.78% in Dec 2020 qtr

Number of MF schemes decreased from 17 to 16 in Dec 2020 qtr

FII/FPI have increased holdings from 7.71% to 7.9% in Dec 2020 qtr.

Number of FII/FPI investors decreased from 185 to 184 in Dec 2020 qtr

Price Performance

1 Week -1.81%

1 Month 3.13%

3 Months 16.13%

YTD 8.69%

1 Year 22.81%

3 Years 31.46%

Yearly Results of Ajanta Pharma (in Rs. Cr.)	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Total Income	2,587.87	2,055.37	2,130.86	2,001.64	1,727.53
Raw Materials	560.33	391.84	378.28	377.85	400.09
Net P/L	467.7	386.97	468.64	506.83	401.41
Equity	17.54	17.54	17.69	17.69	17.69
Reserves	2,580.86	2,226.57	2,023.68	1,550.00	1,173.17
Basic EPS	53.6	43.97	53.26	57.59	45.62
Diluted EPS	53.6	43.96	53.25	57.58	45.61

STRENGTHS

Company with high TTM EPS Growth

High Piotroski Score with High Return on Equity (ROE) and EPS Growth

Growth in Quarterly Net Profit with increasing Profit Margin (YoY)

Company with Low Debt

Increasing profits every quarter for the past 4 quarters

Increasing Revenue every quarter for the past 2 quarters

Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years

Book Value per share Improving for last 2 years

Company with decreasing Promoter pledge

FII / FPI or Institutions increasing their shareholding

Near 52 Week High

WEAKNESSES

MFs decreased their shareholding last quarter

Inefficient use of assets to generate profits - ROA declining in the last 2 years

Promoter decreasing their shareholding

OPPORTUNITIES

Brokers upgraded recommendation or target price in the past three months

Positive Breakout First Resistance ( LTP > R1)

THREATS

Upcoming Results for Nifty500 with Declining Share Price Over the Week

Increasing Trend in Non-Core Income

Insiders sold stocks

NCL INDUSTRIES LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-21T05:54:00.004-08:00

NCL INDUSTRIES LTD

Q3 FY 21 RESULTS ANALYSIS

Management

Kamlesh Gandhi Chairman

K Ravi Managing Director

N G V S G Prasad Executive Director & CFO

CAPACITIES

2,700,000 Cement Capacity(Tons)

90,000 Cement Boned Particle Board (Sq. Metres)

5 Ready Mix Concrete Units

15.75 Hydro Power Capacity (MW)

2,000 Dealers/Distributors

Cement to Building Materials – a natural progression

The first step was setting up a Plant to manufacture cement bonded particle Boards to be used as partitions, roofs and panels. This was started in collaboration with Bison Werke of Germany, the world leaders in particle board technology.

In house research and development brought about several improvements and additional features in the product. Bison Panels now have several features that provided flexibility and adaptability to suit varying requirements.

Bison Panels progressed from market acceptability to popularity. To meet the growing demand of the product, the capacity also was increased from the initial 30,000 TPA. A new plant with similar capacity was set up in Paonta Saheb, Himachal Pradesh in 2007 to cater to the North Indian market. Yet another plant at Mattapalli was commissioned in 2018. Now the total Boards capacity stands at 90,000 TPA.

The Group added to its product portfolio other products like pre-painted steel profiles for windows and partitions, paints, putties and emulsions, UPVC windows and AAC Bricks. These are all manufactured by its sister concern, NCL BUILDTEK LTD, (Formerly known as NCL ALLTEK & SECCOLOR LTD).

The Company is now in the process of setting up a state of the art ready-made doors plant, which is drawing attention of leading builders and architects.

NCL also has an Energy Division consisting of two small hydro power plants viz. 7.50 MW project on right main canal of Srisailam dam and 8.25 MW on right high level canal of Tungabhadra dam. Both the Plants have Power Purchase Agreements with respective State DISCOMs. These two projects augment the company’s revenues.

CEMENT DIVISION

Suryapet Dist.Telangana State

Krishna District, A.P.

BOARDS DIVISION

Suryapet Dist. Telangana State

Sirmour District ,Himachal Pradesh

ENERGY DIVISION

Nandikotkur TQ, Kurnool District, AP

Tungabhadra Dam, Hospet, Karnakata

READY MIX CONCRETE DIVISION

1. Visakhapatnam, A.P.

2. Visakhapatnam

3. Patancheru (V) Telangana State.

4. Keesara (M), Medchal (Dt.)Telangana State.

5. Serilinagampalli,Ranga Reddy (Dist)

6. Maheswaram (Mandal), Ranga Reddy (District), Telangana.

7. Kasimkota (M), Near Paravadapalem Busstop, AP.

DOORS DIVISION : Malkapur (V) Choutuppal (M),

Yadadri-Bhuvanagiri (Dt.) Telangana State

ANNUAL REPORT 2019-20

Performance Review & State of Company’s Affairs

After a promising start during the 1st quarter of the year 2019-20, the Cement Division had to face several challenges in the subsequent quarters.

Non availability of sand, cancellation / suspension of some of the orders by some contractors executing major orders of some State Governments were factors which impacted the demand and dispatches of cement.

On the positive side, there were better price realisation resulted in an improved profit compared to the previous year.

The Cement Division registered a Turnover of ` 1102.91 Crores which was marginally lower by 12% in comparison with the previous year.

The Boards Division recorded a lower Turnover by 6 % at ` 125.92 Crores during the year under review.

The generation of hydel power during the year was 36.80 million units, an increase of around 65 % compared to 22.36 million units in the previous year.

The Ready Mix Concrete division improved its performance during the year under review.

The Readymade Doors division commenced its commercial operations on 23rd December 2019 during the year under review.

The full results of operations of the Division are expected to be reflected in the financial statements for the current Financial Year 2020-21.

Readymade Doors:

The plant for manufacture of Readymade Doors installed at Malkapur near Hyderabad commenced its commercial operations 23rd December, 2019. The response from builders and market to the new product introduced by your Company is encouraging.

Ready Mix Concrete Units (RMC)

During the current year, your company has commenced establishment of two more RMC units at Visakhapatnam and Hyderabad and erection of machinery is in advanced stage of completion

QUARTERLY RESULTS

NCL Industries (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	369.49	348.08	260.91	246.87	210.64	75.41	6.15
Power & Fuel	81.69	78.73	--	79.02	65.05	25.58	3.76
Other Income	1.43	1.5	0.45	2.28	-1.43	-200	-4.67
Interest	4.46	5.11	6.85	7.47	8.1	-44.94	-12.72
P B T	58.47	66.51	48.01	7.37	5.77	913.34	-12.09
Tax	16.88	23.62	16.06	-0.29	0.34	4864.71	-28.54
N P T	41.59	42.9	31.95	7.66	5.43	665.93	-3.05
Equity	45.23	45.23	45.23	45.23	45.23	0	0
Basic EPS	9.2	9.48	7.06	1.72	1.2	666.67	-2.95

MP 168

PE 4.565217391

52 WEEK : L 53.2 H 176.7

Volume 2,67,839

Face Value 10

Book Value 116.83

Price Performance

1 Week 0.63%

1 Month 11.93%

3 Months 15.50%

YTD 13.03%

1 Year 96.29%

Yearly Results	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Net Sales	937.87	979.88	880.4	765.52	660.77
Raw Materials	285.81	343.85	310.88	303.77	255.9
P B T	69.18	60.99	74.37	61.66	66.87
Tax	18.34	14.21	25.26	6.93	13.79
Net Profit	50.85	46.78	49.11	54.73	53.08
Equity	45.23	45.23	45.23	36.73	36.73
Reserves	483.21	454.43	415.97	189.93	160.08
Equity Dividend Rate (%)	25	25	25	25	20
Basic EPS	11.26	10.34	12.51	14.9	14.56

SEGMENT REVENUE
	Q3 FY21	Q2 FY 21	Q3 FY20
CEMENT DN	439.71	434.68	240.59
BOARDS DN	38.47	29.01	31.14
PREFAB DN
ENERGYDN	3.93	2.42	4.42
READYMIX CONCRETE	31.42	21.2	23.49
DOORS	4.05	2.73	0.07
INTER-SEGMENTAL	-51.53	-47.54	-34.04
NET SALES	369.49	348.08	210.64
PROFIT
CEMENT DN	57.95	22.23	5.78

PROMOTERS SHAREHOLDING

Promoters pledged 3.34% of shares in last quarter. Total pledge stands at 6.33% of promoter holdings

Promoters have increased holdings from 43.7% to 43.86% in Dec 2020 qtr.

Mutual Funds have decreased holdings from 6.07% to 2.78% in Dec 2020 qtr

Number of MF schemes remains unchanged at 3 in Dec 2020 qtr

Institutional Investors have decreased holdings from 6.47% to 2.84% in Dec 2020 qtr

STRENGTHS

Promoters increasing shareholding QoQ

Effectively using its capital to generate profit - RoCE improving in last 2 years

Growth in Quarterly Net Profit with increasing Profit Margin (YoY)

Increasing Revenue every Quarter for the past 4 Quarters

WEAKNESSES

MFs decreased their shareholding last quarter

Decline in Net Profit with falling Profit Margin (QoQ)

Declining Net Cash Flow : Companies not able to generate net cash

OPPORTUNITIES

Companies with current TTM PE Ratio less than 3 Year, 5 Year and 10 Year PE

Highest Recovery from 52 Week Low

Stock with Low PE (PE < = 10)

Insiders bought stocks

THREATS

Companies where promoters have increased their pledged stocks

ORIENT ELECTRIC LTD - Q3 FY 21 - RESULTS ANALYSIS

2021-02-19T09:18:00.006-08:00

ORIENT ELECTRIC LTD

Q3 FY 21 RESULTS ANALYSIS

Management

Chandra Kant Birla Chairman
Desh Deepak Khetrapal Vice Chairman

Rakesh Khanna Managing Director & CEO

QUARTERLY RESULTS

Orient Electric Limited (in Rs. Cr.)	Dec '20	Sep '20	Dec '19	YOY	QOQ
Net Sales	618.34	433.77	495.69	24.74	42.55
P B T	69.44	43.3	29.47	135.6	60.4
Tax	17.5	10.88	10.42	67.95	60.85
Net Profit	51.94	32.42	19.05	172.7	60.2
Equity	21.22	21.22	21.22	0	0
Basic EPS.	2.45	1.53	0.9	172.22	60.13

MP 274.7

PE 28.15

52 Week Range 145.05 296.6

Volume 2,37,330

Face Value 1

Shareholding Pattern

Promoters pledge remained unchanged at 12.79% of holdings in Dec 2020 qtr.

Promoters holding remains unchanged at 38.52% in Dec 2020 qtr

Mutual Funds have increased holdings from 17.83% to 19.98% in Dec 2020 qtr.

Number of MF schemes increased from 20 to 21 in Dec 2020 qtr.

FII/FPI have increased holdings from 6.05% to 7.53% in Dec 2020 qtr.

Yearly Results of Orient Electric Limited (in Rs. Cr.)	Mar '20	Mar '19	Mar '18	Mar '17
Net Sales	2,061.82	1,864.40	1,599.77	212.28
P/L Before Tax	114.27	104.9	97.83	20.2
Tax	35.65	35.59	33.8	8.37
Net Profit	78.62	69.31	64.03	11.82
Equity	21.22	21.22	21.22	21.22
Reserves	338.17	285.36	242.03	--
Equity Dividend Rate (%)	115	100	50	--
Basic EPS	3.71	3.27	3.02	0.56

Price Performance

1 Week -1.78%

1 Month 18.41%

3 Months 21.23%

YTD 20.20%

1 Year 3.63%

3 Years 0.00%

STRENGTHS

Companies with strong financials

Stock passes majority of CANSLIM Investment criteria

High TTM EPS Growth

Growth in Net Profit &increasing Profit Margin (QoQ)(YOY)

Company with Low Debt

Increasing Revenue every quarter for the past 2 quarters

Increasing profits every quarter for the past 2 quarters

Annual Net Profits improving for last 2 years

Book Value per share Improving for last 2 years

Decreasing Promoter pledge

FII / FPI or Institutions increasing their shareholding

WEAKNESSES

RoCE declining in the last 2 years

ROE declining in the last 2 years

Declining Net Cash Flow : Companies not able to generate net cash

Revival of Home Appliances

Tailwinds : Due to heightened consumer demand for all types of home appliances in the wake of increased home bound working, together with a strong support of pent-up demand and festival season in the last quarter, led to encouraging growth in offtakes.

Supply chain shift from smaller scale and unorganized sector to larger established brands.

The steep increase in commodity prices compelled all industry players to take up the prices effective Q4’21.

The forewarning of price increase propelled dealer stocking during Dec’20.

Key Highlights : Q3’FY21 : Orient rides the tide:

Orient Electric Limited (OEL) continued the growth momentum for all product segments riding on the market pull in B2C retail and e-commerce.

Institutional buying remained subdued

Overall B2C retail businesses recorded steep growth in the quarter across all product segments, fans, Water heaters, small kitchen appliances and consumer luminaires were more dominant to drive the growth engine in the quarter.

Premium products are steadily making a comeback with rising share of business. OEL registered 25% revenue growth for the Q3’FY21 with a healthy bottom-line delivery of ~175% over last year in the same period and operating margin expansion by 4.5% y-o-y for the quarter.

For the nine-month period, OEL has recorded growth of ~34% in Net Profit year on year after wiping out net loss for the complete lockdown period during April-May’20.

Q320-21 (A) Q319-20(A) YOY%

Revenue 618.3 495.7 24.7%

Op.EBITDA 84.2 45.1 86.7%

EBITDA% 13.6% 9.1% 10%

PBT 69.4 29.3 136.9%

PBT% 11.2% 5.9% 6.3%

PAT 51.9 18.9 174.9%

PAT% 8.4% 3.8% 4.6%

Gross Margin:

Gross margin contraction both Y-o-Y and sequentially Q-o-Q was primarily driven by a substantial change in segment mix and product mix with a higher increase in share of business during the quarter in ECD vs-a-vis Lighting.

With steep input cost increases resulting from ongoing commodity trends, gross margin is likely to be under continued pressure.

Expenses:

Employee Cost reduced year-on-year by 9% and Other Expenses reduced by 16% enabled by rapid digitization and process transformation. In view of the positive consumer sentiment, Advertisement and promotion expenses have resumed at last year levels during the quarter.

EBITDA:

Firm control on expenses coupled with higher scale enabled better operating leverage to offset the gross margin contraction and yet deliver an expansion in the operating margins by 450 bps during the quarter ended Dec’20 and by 260 bps for the year to date, overcoming the adverse margin impact of the complete lockdown period earlier in the year.

Finance cost:

Aggregate Finance Cost has reduced by 30% Y-o-Y for the quarter and reduced by ~17% for the year to date primarily due to repayment of working capital and term loans. However, other bank charges will continue to remain and also increase with scale.

Income Tax:

Lower corporate tax rate opted last year has helped in reducing the incidence of tax year on year.

Working capital:

Sharper inventory planning, increased collections and channel financing, coupled with restructuring Vendor terms assisted a reduction of working capital from 60 days (Rs. 364 cr.) last year to 18 days (Rs. 146 cr.) end-Dec’20. This has also resulted in improving the cash conversion cycle by around 40 days y-o-y, thereby generating stronger cash flows in the quarter.

Net Debt position as on 31st Dec’20:

• Gross Borrowings at Rs. 15 cr.

• Cash & Bank Bal = Rs. 170 cr.

• Net Debt = (-) Rs. 155 cr.

Q3 20-21 Q2 20-21 Q3 19-20

EBITDA % to Revenue 13.6% 13.3% 9.1%

PAT % to Revenue 8.4% 7.5% 3.8%

ROCE 43.0% 29.5% 28.0%

EPS 2.44 1.52 0.90

Debt to Equity 0.04 0.04 0.49

TOL/TNW 1.45 1.31 2.00

Current Ratio 1.40 1.39 1.32

Outlook: Optimistic with caution

Higher recovery rate of the virus infection, declining trend of newly affected cases, and arrival of the vaccines is building consumer sentiment and business confidence.

Adding further difficulty, lead times and costs for overseas shipments through Indian ports has aggravated.

The green field project for manufacturing capacity expansion at South India is progressing well and we expect to perform ground-breaking during Q1’FY22.

The company will continue the efforts on Working Capital reduction with sharper inventory planning and cash management, despite the onset of high seasonal volumes in the final quarter of the current fiscal, without comprising on the market shares.

Electrical Consumer Durables

ECD segment further picked up overall momentum during the quarter supported by the festive season and advance buying by Dealers due to anticipated price increase.

Coolers continued to remain depressed during the quarter, whereas all other product segments have performed well.

While all channels have shown good growths, e-commerce drove the segment volumes substantially in the quarter having grown by more than 3x over LY.

The segment was confronted with commodity price pressures and intermittent shortage of materials which is likely to continue into the next quarter. Hence, in lines with industry trends, price increases in all product lines are lined up to address the commodity pressures.

Fans

Orient registered healthy growth across all categories in the quarter though remaining lower than last year for 9-month ended Dec20 due to eroded Q1’FY21. Soaring input prices seen during the quarter and occasional shortages in materials are causing pressures on supply ahead of season.

However, the procurement teams along with the vendor partners are ensuring availability with timely interventions. Speedier adoption of SFA and DMS is helping acquire market visibility.

The margin for the segment has grown substantially on the back of controlled costs and better leverage of expenses.

Working capital has been substantially reduced y-o-y by around 40 days with better inventory planning, higher collections and restructuring of vendor terms. This has resulted in better cash generation for the segment.

Home Appliances

Encouraging growth of the segment was driven by Small Appliances and Water Heaters across all geographies. Consistent network expansion is the key enabler for driving the growth.

Retail Connect programs and launch of SFA / DMS during the quarter is being leveraged to track markets and harness expansion opportunities. New products have been launched during the quarter across all the categories. In view of the rising input costs of ABS and Steel affecting the product costs, alternate materials are also under consideration.

There has been considerable expansion of operating margins for this category due to protection of gross margins, reduction in operating costs resulting in leverage of spends.

This segment also reduced working capital by around 20 days y-o-y with strategic inventory planning together with restructuring of payment terms and also with higher collections.

Lighting & Switchgear

Demand for Consumer Lighting indicate high teens growth y-o-y in the industry in Q3’FY21. Upsurge in consumption in tier 2 and tier 3 cities is generating demand for electrical products like switches, and lighting.

CLUM growth is at a faster pace than Lamps in Q3 with changing consumer preference and rising home consumption.

LED Lamps demand continues to remains healthy fueled mainly by smaller towns. In L&S segment too, the growth in Dec’20 was driven due to advance channel buying because of impending price increase propelled by rising input prices of PC, PP, Electronic components and metals.

B2B Business environment remain sluggish as new projects are still on hold. B2G project tendering, especially in infra sector, has started and tenders are expected to be awarded in next 3-6 months.

Lighting

Consumer Lighting continued its growth trajectory during the quarter mainly driven by Consumer Luminaire business. High focus on C-Lum and effective supply planning enabled the growth.

Tender business for OEL had a high base last year which has reduced substantially due to non-clearance of new orders. The business has a good order bank awaiting execution subject to site clearances.

The significant drop in the Tender business y-o-y resulted in a negative growth for the segment, despite strong traction in the B2C.

The company has successfully entered into the Façade Lighting category and completed the prestigious “Dobra Chanti Bridge” project in Uttarakhand, “ODISHA Vidhan Sabha” building at Bhubaneswar, amongst other projects completed during this quarter.

Rising input cost concerns are influenced by prices of polycarbonate, polypropylene, and metals. Going forward, the cost push will be addressed through a combination of cost reduction initiatives and price increase. During the quarter, advance planning for component and FG sourcing helped to keep down LED Lamp cost.

Targeted focus on high wattage lamps enabled volumes and mix resulting to improvement in the margins. Lower costs, efficient sourcing and manufacturing together with a better product mix resulted to a margin expansion of Lighting business. Working Capital for Lighting reduced by around 40 days y-o-y resulting to healthy cash generation.

Switchgear

The addressable market of OEL Switches is small and in the premium segment which has been under pressure, though OEL stands to remain focused within this niche’ space only.

Accordingly, the OEL focus is on select markets and penetration in such markets coupled with the B2B segment and influencer programs. Sales promotion activities including electrician meets have resumed during the quarter.

OEL is trending at lower than last year levels in this segment primarily due to muted B2B business.

As a result, the margins have suffered y-o-y though with very low share of business.

However, this business had also reduced Working Capital by almost 90 days on a very low base.

Key developments of the quarter

Digitisation under “e-Wings”

The company’s journey in fast pacing the digital interventions and technology enablement across every touch point in the entity is progressing with promise.

Several implementations are currently underway, which have started showing some positive indications in terms of changeover of processes and efficiencies.

The level and adoption and seamless integration across all modules of digitisation will finally determine the business results delivery over a period in future.

1. TCS enablement

With the new rule of paying TCS on all collections of the company, OEL has been very agile to quickly put the digitally enabled seamless process in place during the quarter not only for complying with the rule but also to facilitate visibility, reconciliation and compliance without any added effort.

2. Sales Force Automation (SFA)

Whist the implementation was carried out in the previous quarter, but the adoption and KPI tracking with change in the ways of working has seen substantial adoption rate, not only with own sales team but also with targeted Distributor sales staff by close handholding and training.

3. Distributor Management System (DMS)

Despite all complexities of heterogenous backend systems and practices of distributors, OEL continues to progress with encouraging initial results of implementation and integration, on the ground, at the distributor point across select target distributors across all businesses.

4. Transport Management System (TMS)

User confidence on ground is continuously increasing with fast paced adoption across all warehouses and logistics touch points with supporting results of process stability showing a promise of benefit delivery.

5. Employee engagement

Employee engaging processes including attendance, leave management, recruitment, travel & expense reimbursements as well as rewards & recognition processes, all are mobility enabled real time user friendly adoption which has successfully happened during the quarter.

INDIAN BANK - Q3 FY 21 - RESULTS ANALYSIS

2021-02-19T09:15:00.002-08:00

INDIAN BANK

Q3 FY 21 RESULTS ANALYSIS

Amalgamation of Allahabad Bank into Indian Bank came in to effect on April1, 2020. Accordingly, the combined financials as on 31st December 2019 and 31st March 2020 have been arrived at by aggregation of audited numbers of two banks.

Performance Highlights - Q3 FY 21 (YoY)

Business`9.1 lakh Cr 8% UP

Deposits`5.2 lakh Cr8%UP

CASA at 41% 86 bps UP

Savings Bank 9% UP

Term Deposits7% UP

Advances`3.9 lakh Cr7% UP

RAM Rs.2 LAKH CR 12% UP

GROSS NPA 9.04% 365 BPS DOWN

NET NPA 2.35% 187 BPS DOWN

PCR 86.51% 808 BPS UP

OPERATING PROFIT Rs.3099 Cr 10% UP

Net Profit `514 Cr UP

ROA % 0.35 UP

ROE % 7.13 UP

Domestic NIM 3.13 42 bps UP

Expense Ratio 45.73% DOWN

CRAR (Basel III) 14.06% UP

Financials

Indian Bank (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Interest Earned
(a) Int. /Disc. on Adv/Bills	7,133	7,148	7,149	4,037	4,050	76	-0.21
(b) Income on Investment	2,809	2,795	2,775	1,399	1,366	106	0.5
(c) Int. on balances With RBI	68.8	99.52	180.3	49.95	46.49	48	-31
(d) Others	16.57	17.11	18.6	3.45	3.74	343.05	-3.16
Other Income	1,544.35	1,737.09	1,433.30	851.31	1,037.44	48.86	-11.1
TOTAL INTT INCOME	10,025.00	10,057.00			9,693	3.43	-0.32
NON INTT INCOME	1,397.00	1,612.00			5,769	-75.78	-13.34
TOTAL INCOME	11421	11669			44099	-74.1	-2.13
EXPENDITURE
Interest Expended	5,711.44	5,912.34	6,245.54	3,489.73	3,511.74	62.64	-3.4
Employees Cost	1,579.66	1,757.97	1,660.76	625.9	594.21	166	-10
Other Expenses	1,166.03	1,111.62	876.78	521.38	482.63	141.6	4.89
TOTAL EXPENSES	8,322.00	8,674.00			8550	-2.67	-4.06
Operating Profit	3,114	3,015	2,773	1,703	1,916	63	3.3
Provisions	2,314.36	2,284.25	2,139.05	1,888.48	1,525.53	51.71	1.32
P B T	799.85	730.4	633.96	-185.15	390.36	104.9	9.51
Tax	274	306	249	30	142	92	-11
Net Profit	526	424	385	-215	248	112	24
FINAL N P T	535	458	431	-267	291	84	17
Equity	1,129.37	1,129.37	1,129.37	608.8	608.8	85.51	0
Reserves	19,170.93	19,170.93	19,170.93	19,170.93	16,140.13	18.78	0
ANALYTICAL RATIOS
a) % of Share by Govt.	88.06	88.06	88.06	83.46	83.46	5.51	0
Basic EPS	4.74	4.05	3.82	-4.39	5.62	-15.66	17.04

MP 149.9

PE 7.91

VOLUMES 18215508

52 Week Range 41.55 157

Face Value 10

Book Value Per Share 206.39

INTERESTR EXPENDED /TOTAL INCOME% : 50.01

EMPL COST 13.83

OTHER EXPENSES 10.21

TOTAL EXPENSES 72.87

OPERATING PROFIT 27.27

PROVISIONS 20.26

P B T 7

TAX 2.39

NET PROFIT 4.61

COMPONENTS	YE MAR'20	Q3FY20	Q2FY21	Q3FY21	QOQ	YOY
INTEREST INCOME	38330	9693	10057	10025	0	3
INTT EXPENSES	25273	6400	5913	5711	-3	-11
NII	13057	3293	4144	4313	4	31
NON INTT INCOME	5769	1673	1612	1397	-13	-17
OPTG INCOME	18825	4966	5756	5710	-1	15
OPTG EXP	9293	2150	2760	2611	-5	21
OPTG PROFIT	9587	2816	2995	3099	3	10
PROVISIONS	14230	4555	2583	2585	0	-43
NET PROFIT	-4643	-1739	412	514	25	NA

TOTAL INCOME	44099	11366	11669	11421	-2	NA

R O A	-0.86	-1.28	0.28	0.35
NIM DOMESTIC	2.73	2.71	3.06	3.13
ROI(DOMES)	7.61	7.5	7.83	7.25
EPS	0	0	14.61	18.21
BUSINESS PER EMPLOYEE(CR)	20.93	20.43	21.49	21.55
NET PROFIT PER EMLOYEE(LAKHS)	0	0	4.1	4.89
CASA%	40	41	41	41

SEGMENT	TARGET	ACHIEVEMENT
PRIORITY SECTOR	40%	42.35
AGRI	18	19.75
SF/MF	8	9.16
WEAKER SECTION	10	12.23
MICRO(MSME)	7.5	9.01
NON CORPORATE FARMERS	12.14	16.33

NPAs
INDUSTRY	% TO RESPECTIVE PORTFOLIO
	31.12.2019	31.12.2020
METALS	38.98	35.44
PETROLEUMETC	22.71	1.25
ENGG	46.76	23.26
TEXTILES	23.61	13.86
INFRA	13.39	10.03
POWER	18.1	11.28
REALEST	12.03	7.68
NBFC	4.33	3.14
OTHERS	11.08	8.38

MIGRATION TO DIGITAL CHANNELS
	Q2FY21	Q3FY21
BRANCH TRANSACTION	47%	36%
ATM&BNA	19%	24%
DIGITAL TRANSACTION	34%	40%

BUSINESS NETWORK
DOMESTIC BRANCHES		6003
ATMS&BNAS		5428
CORRESPONDENTS		9095
OVERSEAS BRANCHES		3

REGIONAL RURAL BANKS
BRANCHES		899

NGL FINE CHEMICALS LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-17T18:00:00.002-08:00

NGL FINE CHEMICALS LTD

Q3 FY 21 RESULTS ANALYSIS

NGL Fine-Chem Ltd is a manufacturer of pharmaceuticals and intermediates for usage in veterinary and human health. It caters to various global companies to custom manufacture high quality pharmaceuticals with reliability and flexibility.

Its business is modelled around the changing customer demands and its ability to offer value-added innovative solutions to meet and even exceed these demands.

Products

› APIs Animal Health

› APIs Human Health

› Intermediates

› Finished Dosage Form

Management

Rahul Nachane : Managing Director

Rajesh Narayan Lawande : Whole Time Director & CFO

QUARTERLY RESULTS

NGL Fine Chem (in Rs. Cr.)	Dec '20	Jun '20	Mar '20	Dec '19	Sep '19	YOY	QOQ
Net Sales	72.72	42.37	35.44	37.42	37.21	95.43	71.63
Interest	0.37	0.6	0.6	0.64	0.66	-43.94	-38.33
PBT	23.43	12.93	0.31	1.72	2.73	758.24	81.21
Tax	5.72	3.54	0.51	0.59	0.39	1366.67	61.58
FINAL NPT	17.71	9.39	-0.2	1.13	2.35	653.62	88.6
Equity	3.09	3.09	3.09	3.09	3.09	0	0
Basic EPS	28.67	15.19	-0.32	1.82	3.8	654.47	88.74

Basic EPS 28.67

MP 1499

PE 13.39

VOLUME 7472 ONLY BSE

52 Week Range : 220 1,589

Volume 7,472

BV 160

FV 5

Yearly Results of NGL Fine Chem (in Rs. Cr.)	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Net Sales	152.18	153.17	113.66	96.46	94.84
Raw Materials	70.19	63.9	50.38	38.47	39.09
Employees Cost	23.81	21.16	18.37	14.02	11.35
Depreciation	7.27	6.3	4.56	3.08	2.72
Other Expenses	43.03	37.34	28.07	22.73	22.57
Net Profit	10.6	20.13	12.59	14.24	11.4
Equity	3.09	3.09	3.09	3.09	3.09
Reserves	98.12	89.03	68.95	56.32	41.13
Basic EPS	17.16	32.58	20.38	23.05	18.45

Contract Manufacturing

Manufacturing Plants : NGL Fine-Chem Ltd has manufacturing plants located around Mumbai. These plants have been designed to meet the requirements of Drug regulatory agencies and are capable of a wide range of reaction capabilities.

Our current manufacturing facilities comprise of

Plant Area : 9000 m2

Glass Lined Reactor : 20 m3

Stainless Steel reactors : 40 m3

Gas Induction reactor : 3 m3

And other equipment consisting of Lead Lined /Mild Steel Reactor : H10 m3

Reactions ranging -30°C – 300°C can be carried out at our premises.

Pilot Plant

NGL Fine-chem Ltd has a pilot plant facility for the scale up and development of new products and processes.

The pilot plant facilities comprise of

Plant Area : 2000 sq.ft

Glass Reactor : 50 liters - 5 Nos

Stainless Steel reactors : 200 liters - 400 liters

Gas Induction reactor : 5 liters

Other equipment comprising of Bioreactor : 2000 Liters

Reaction Capabilities

Nitration

Halogenation

Hydrogenation

Chlorosulfonation

Diazotization

High temperature Reactions

Hazardous / Toxic Reactions

Oxidations

Alkylations

Custom Synthesis

The core expertise of NGL Fine-Chem Ltd is complex multi step organic synthesis for the manufacture of generic API’s and intermediates.

Our synthetic chemistry expertise coupled with problem - solving skills guide us to achieve safe and simple solutions to synthesize commercialize complex molecules, to meet your custom manufacturing needs.

We are committed to offer solutions to complete scale-up, process development and process validation and analytical services. With our complete range of reaction capabilities we work closely with you to deliver high-purity compounds as cost-effectively as possible.

Reaction Capabilities

• Nitration

• Halogenation

• Hydrogenation

• Chlorosulfonation

• Diazotizaton

• High temperature reactions

• Hazardous / Toxic reactions

• Oxidations

• Alkylations

WHY IT'S STRONG BUY

MOJO SCORE

Buy 82 Strong Buy

1 High Management Efficiency with a high ROE of 20.04%

2 Strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.49 times

3 With a growth in Net Profit of 1467.26%, the Company declared Outstanding results in Dec 20

The company has declared positive results for the last 3 consecutive quarters

CASH AND CASH EQUIVALENTS(HY) Highest at Rs 9.65 cr

NET SALES(Q) Highest at Rs 72.72 cr

PBDIT(Q) Highest at Rs 22.40 cr.

4 Stock is technically in a Bullish range

The technical trend has improved from Mildly Bullish on 02-Feb-21 and has generated 6.47% returns since then

Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST and DOW

1 YEAR RETURN - OUTPERFORMED THE SENSEX BY 239.57%

1W 5.75 % 1.71%

1M 22.86 % 4.2%

YTD 36.17 % 8.05%

1Y 263.7 % 24.13%

3Y 278.52 % 50.43%

5Y 618.71 % 124.47%

10Y 9276.15 % 191.04%

Dec 20 Results: : Outstanding result- Financial Trend score in Dec 20 is 33 which has improved of previous quarter score of 29

22 May : BRIEF-NGL Fine Chem Re-Appoints Rahul Nachane As MD

BUY TARGET : Rs 485.00

Shashank Kanodia(ICICIdirect.com) on 20th Mar 18

THINGS YOU SHOULD KNOW

Bulk Deal : No bulk deals in the last 1 week

Block Deal : No Block deals in the last 1 week

Dec 20 Results: : Outstanding result- Financial Trend score in Dec 20 is 33 which has improved of previous quarter score of 29

Industry Pharma

Market cap Rs 947.09 Cr (Micro Cap)

P/E 21.71

Industry P/E 31.29

Dividend Yield 0.12%

Debt Equity -0.27

Return on Equity 21.27%

Price to Book 7.55

Net Sales Rs 72.72 cr

Net Profit (Quarterly Results - Dec 2020) ::Rs 17.71cr

TECHNICAL RATING VERY BULLISH

STRENGTHS

Rising Net Cash Flow and Cash from Operating activity

Company with high TTM EPS Growth

Good quarterly growth in the recent results

Growth in Net Profit with increasing Profit Margin (QoQ)

Company with Low Debt

Increasing Revenue every quarter for the past 3 quarters

Increasing profits every quarter for the past 3 quarters

Company with Zero Promoter Pledge

Recent Results : Growth in Operating Profit with increase in operating margins (YoY)

Near 52 Week High

Stock gained more than 20% in one month

Companies with rising net profit margins - quarterly as well as TTM basis

Strong Momentum: Price above short, medium and long term moving averages

ANNUAL REPORT 2019-20

We reported net sales turnover of ₹ 149.45 Crores, net EBITDA of ₹ 23.87 Crores and PAT of ₹ 10.60 Crores in 2019-2020. Veterinary APIs accounted for 89% of the overall API sales whereas remaining was contributed by the human APIs, veterinary formulations and others. Exports continued to comprise the large part of our revenue at 74.03%.

I am further happy to state that the brownfield expansion at Tarapur, commissioned in February 2019, has commence commercial production. The validation batches are being undertaken for four products which are at different stages.

In addition, we have acquired Macrotech Polychem Pvt Ltd for a consideration of ₹ 7 Crores. We have commenced manufacturing at its facilities and are expecting higher utilisation in the coming years.

As we look to 2020-21 and beyond, we are in a great position to continue to grow from strength to strength. With a clear and compelling purpose, solid foundation and a well-positioned product portfolio, we shall continue to move ahead as per our long-term goals.

Warm Regards,

Rahul Nachane

Managing Director

Total Revenue from Exports Business 74.03%

Total Revenue from Indigenous Business 25.97%

PRODUCTWISE REVENUES:

Human APIs 2%

Veterinary APIs 89%

Veterinary Formulations 5%

Intermediates 2%

Others 2%

ASAHI INDIA GLASS LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-16T09:39:00.002-08:00

ASAHI INDIA GLASS LTD

Q3 FY 21 RESULTS ANALYSIS

It manufactures 3 types of Glass (1) Automotive Glass (2) Architectural Glass (3) Consumer Glass

Board of Directors

Mr. B. M. LabrooChairman

Mr. Sanjay Labroo Managing Director & C.E.O

Mr. Satoshi Ogata Dy. Managing Director & C.T.O. (Auto)

In a span of over three decades, AIS’s Automotive Glass SBU has grown from a single-location manufacturing to five state-of-art manufacturing facilities across India including a facility each at Bawal, Haryana; Roorkee, Uttarakhand; Chennai, Tamil Nadu; Taloja, Maharashtra and the latest plant being built at Patan, Gujarat.

These strategically located manufacturing facilities ensure seamless QCDDM to all automotive OEMs across India. AIS’s strong focus on R&D and its penchant for state-of-the-art technologies helps it deliver breakthrough solutions to its customers, even as it easily meets the most stringent quality norms of both global and domestic OEMs. With a market share of approx. 73% in the passenger vehicle segment, AIS’s Auto Glass is with nearly three out of every four cars, SUVs and MUVs manufactured in India.

During the financial year, AIS saw its auto glass products on most of the new launches including S-Presso from Maruti Suzuki; Venue, Grand i10 Nios and Aura from Hyundai Motors; Seltos from Kia Motors; Altroz from Tata Motors; Triber from Renault and Hector from MG Motors.

QUARTERLY RESULTS

Asahi India Glass (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	747	634	227	595	684	9.2	17.8
Raw Materials	214.57	209.64	45.13	210.24	226.48	-5.26	2.35
TOTAL EXPENSES	646	589			641	0.88	9.79
Interest	35.05	38.64	36.93	34.95	36.85	-4.88	-9.29
P B T	109	55	-97	19.2	44	147	99
Tax	38.83	20.73	-33.58	-31.39	15.3	153.79	87.31
Net Profit	69.9	33.9	-63.4	50.6	28.8	143	106
FINAL NPT	73.91	37.29	-62.7	52.53	32.17	129.75	98.2
Equity	24.31	24.31	24.31	24.31	24.31	0	0
Basic EPS(FV:1)	3.04	1.53	-2.58	2.16	1.3	133.85	98.69

MP 290.85

PE 23.92

52 Week Range L 119 H 302

Volume 85,312 NSE

Book Value Per Share 53.01

3 year CAGR growth

Revenue 3.80%

Net Profit 0.90%

Operating Profit 1.60%

Price Performance

1 Week -1.29%

1 Month 0.33%

3 Months 29.38%

1 Year 10.51%

3 Years -19.64%

Yearly Results	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Net Sales	2,638.60	2,904.51	2,628.02	2,372.99	2,207.37
Raw Materials	875.99	960.5	888.36	824.66	759.47
P B T	160.97	272.99	264.7	192.19	142.06
Tax	19.45	92.12	92.99	57.54	60.02
N P T	141.52	180.87	171.71	127.52	82.04
FINAL NPT	153.72	190.18	177.38	131.33	86.95
Equity	24.31	24.31	24.31	24.31	24.31
Reserves	1,277.9	1,191.4	1,051.3	902.41	329.74
Basic EPS	6.32	7.82	7.3	5.4	3.58

Shareholding Pattern

Promoters unpledged 0.44% of shares in last quarter. Total pledge stands at 10.67% of promoter holdings

Promoters holding remains unchanged at 54.27% in Dec 2020 qtr

Mutual Funds have decreased holdings from 1.24% to 0.72% in Dec 2020 qtr

Number of MF schemes increased from 24 to 25 in Dec 2020 qtr.

FII/FPI have decreased holdings from 1.16% to 1.15% in Dec 2020 qtr

STRENGTHS

Growth in Net Profit with increasing Profit Margin (QoQ)

Increasing Revenue every quarter for the past 2 quarters

Increasing profits every quarter for the past 2 quarters

Book Value per share Improving for last 2 years

Company with decreasing Promoter pledge

Near 52 Week High

Strong Momentum: Price above short, medium and long term moving averages

WEAKNESSES

MFs decreased their shareholding last quarter

RoCE declining in the last 2 years

ROE declining in the last 2 years

ROA declining in the last 2 years

Declining Cash Flow from Operations for last 2 years

Degrowth in Revenue and Profit

Declining Net Cash Flow : Companies not able to generate net cash

Major fall in TTM Net Profit

OPPORTUNITIES

Highest Recovery from 52 Week Low

RSI indicating price strength

THREATS

Upcoming Results for Nifty500 with Declining Share Price Over the Week

Stocks with high PE (PE > 23)

MARKSANS PHARMA LTD - Q3 FY 21 RESULTS ANALYSIS

2021-02-15T20:20:00.000-08:00

MARKSANS PHARMA LTD

Q3 FY 21 RESULTS ANALYSIS

BUSINESS DESCRIPTION -

Marksans Pharma Ltd., headquartered at Mumbai, is engaged in Research, Manufacturing & Marketing of generic pharmaceutical formulations

Company manufactures tablets(plain, enteric coated and film coated), hard & soft gelatin capsule, oral liquids and ointments

Its manufacturing facilities are accredited by USFDA, UKMHRA and Australian TGA

MANAGEMENT

Mark Saldanha MANAGING DIRECTOR AND CEO

About Q3 FY 21 : I am pleased to share that we delivered another outstanding quarter led by all round growth. We maintained our momentum with a 24.6% revenue growth and operational improvement with a record EBITDA of Rs. 91.1 crore. We remain cautiously positive of continuing the said traction in the forthcoming quarters in the light of gradual reopening of lockdowns in developed markets.

QUARTERLY RESULTS

Marksans Pharma (in Rs. Cr.)	Dec '20	Sep '20	Jun '20	Mar '20	Dec '19	YOY	QOQ
Net Sales	358	356	331	335	288	24.6	0.53
Raw Materials	112	118	92	145	75	48.18	-4.9
Traded Goods	66.67	52.72	43.46	6.72	53.13	25.48	26.5
Other Expenses	78.01	65.75	78.86	72.16	59.77	30.52	18.65
Interest	1.68	1.93	1.55	2.04	1.65	1.82	-13
P B T	77.6	65.9	61.4	57.6	38.3	102.5	17.8
TAX	18.7	15.16	12.04	14.82	8.78	113	23.4
N P T	58.94	50.73	49.37	42.74	29.56	99.39	16.18
Equity	40.93	40.93	40.93	40.93	40.93	0	0
Basic EPS	1.42	1.21	1.2	1	0.71	100	17.36

MP 56.05

PE 9.87

VOLUME 7,00,071

52 Week Range L 9.85 H 66.2

Volume 7,00,071

3 year CAGR growth

24.6%(YoY) Revenue

92.6%(YoY) EBITDA

99.4% PAT

195.6 Cash (₹ cr.)

Financial Highlights

•Q3FY21

•Operating Revenue was ₹ 358.4 cr.; Y-o-Y growth of 24.6%

•EBITDA was ₹ 91.1 cr.; Y-o-Y growth of 92.6% •EBITDA Margin stood at 25.4% for Q3FY21 as against 16.4% in Q3FY20

•PAT stood at ₹ 58.9 cr., Y-o-Y growth of 99.4% 9MFY21

9MY FY 21

•Operating Revenue was ₹1,046.0 cr.; Y-o-Y growth of 30.9%

•EBITDA was ₹ 244.2 cr.; Y-o-Y growth of 98.5% •EBITDA Margin stood at 23.3% for 9MFY21 as against 15.4% in 9MFY20

•PAT stood at ₹ 159.0 cr., Y-o-Y growth of 104%

· GPT MARGIN 60.5%

· NPT MARGIN 16.6%

· ROCE 11.6%

· ROE 24.5%

· NET DEBT TO EBITDA -0.6

Anti-Biotic 13

Anti hair fall (male)14

Anticancer 17

Miscellaneous 17

Anti-Allergic 33

Central Nervous System(CNS) 76

Gastrointestinal 93

Cough & Cold 149

Cardiovascular System(CVS) 164

Anti-Daibetic 209

Pain Management 350

Focus on Regulated Markets

•Marksans commenced business with CRAMS directed at the UK and Australian markets

•Entered the regulated Australian market with the acquisition of Nova in 2005

•Entered the regulated UK market with the acquisition of Bell Sons & Company Ltd. in 2007 and Relonchem Limited in 2008

•Entered the US market in 2011-12 and acquired Time-Cap Laboratories in 2015

•The Company now has a global presence across 25 countries

Forward Integrated Business Model

Marksans commenced operations as a formulations manufacturing enterprise

•The Company entered front-end marketing in regulated markets through acquisitions

•The Company was among a few Indian mid-sized companies with frontend marketing capabilities

•The Company invested in a state of- the-art R&D facility, strengthening integration

Wider Product Basket

Marksans commenced its journey with products addressing the pain management segment

•The Company focused on high-growth areas impacted by lifestyle disorders

•The Company launched soft gelatin capsules, a niche category

•The Company now offers products across >10 therapeutic segments

Forward Integrated Business Model

R&D and Manufacturing

Supply chain and distribution

End Consumers

Long-term Strategy

Strategic Focus on Regulated Markets

Global Footprint

Marksans Pharma entered into strategic tie-ups and acquired key players in major markets to expand its global footprint

Higher Margins

Company can generate higher margins by eliminating third parties from the value chain

Currently, the company markets products in 25+ countries

with the UK and the US being the largest

European Countries

Other prominent markets include Australia, New Zealand, Canada and several other European countries

Regulatory Approvals

These markets are empowered with regulatory approvals which allows the company to sell its products without restrictions

Proprietary Marketing Presence

Marksans is among a handful of Indian players with a proprietary marketing presence in the world’s largest pharma market such as US, UK and Australia

Expansion in Regulated Markets

The Company expects to expand in the regulated markets through integrated product development, cGMP compliance, regulatory compliance and utilization of latest technologies

Marksans Pharma generates ~95% of its revenues from regulated markets

Niche Formulations with few Competitors

DIFFERENTIATED OFFERINGS

Focused on softgel capsules with a view to build a differentiated set of offerings in the crowded generics market

LIMITED COMPETITION

Given the challenges in preparing Softgel formulations plus other economic, technical and patent constraints there are not many players in this segment

HIGH BARRIERS TO ENTRY

High capex requirements and operational costs further restrict entry

SELECTIVELY TARGETED LARGER MARKETS

Marksans has filed softgel products in all major markets including USA, UK, Europe, Canada, Australia & Russia. Of this, US alone is potentially a USD9 billion market

NEW APPROVALS

6 new approvals are awaited in US

MFG CAPABILITIES WITH REGULATORY APPROVALS :

Marksans’ Goa facility has a capacity to turn out 2.4 billion softgel capsules per annum, and has all the necessary approvals by USFDA, UKMHRA, TGA & other key regulatory authorities

Marksans Pharma is currently one of the most active Indian firms focused in Softgel segment

UK Business & Opportunity by market size

OVERVIEW OF THE MARKET

The UK & EU pharmaceutical market is estimated to grow from ~USD 468 billion in 2016 to ~USD 585 billion by 2030,at a CAGR of 1.6%, driven primarily by a robust life sciences industry.

COMPANY PRESENCE

•One of the top 5 Indian pharma companies in the UK.

•UK business is driven by its two subsidiaries, Relonchem and Bell.

•Bell has a strong OTC portfolio with 450+ OTC/SKU products and 50+ products in pipeline.

•Relonchem’s portfolio comprises 162 MA’s.

OUTLOOK

•Company has 50+ products in the pipeline in different stages to cater to UK market.

•Company is awaiting approval for ~20 MAs in the UK market.

Expansion Strategy for UK

REVENUE FY20

•Wide UK customer base and 100% reach within the distribution channel.

•Broad and diversified range of product portfolio with well recognized brands.

•Captured a large share of OTC and generic markets.

ORGANIC GROWTH

•Working on receiving USFDA approval for Southport facility to commence exports to USA.

•Increase in partnership with major national distributors, pharmacies, retailers and chemist wholesalers.

NEW PRODUCTS IN PIPELINE

•Developing a range of narcotic & dermatology products

•Range of oral solid products under-development to increase market share in generic and OTC markets

•Investment in manufacturing facility to develop oral liquid solutions

INORGANIC GROWTH

•For rapid expansion into various therapy areas and other markets including UK and Europe, the company plans to acquire product licenses.

REVENUE FY 25

•Sustainable revenue growth

•Consistently delivering on profit margins

•Focus towards Europe, USA and other export destinations

•One of the key OTC product supplier and private label manufacturer in the industry

US Business & Opportunity by market size

OVERVIEW OF THE MARKET

The US holds over 30-40% of the global pharmaceutical market. Nominal spend on medicine was USD 511 billion in 2019, and is expected to grow at projected CAGR of 4-5% over near term, due to favorable government programs and policies.

COMPANY PRESENCE

•In June 2015, Marksans acquired Time-Cap Labs which enabled Marksans to expand its offering in US market.

•50+ products in various therapy area segments.

•Proprietary marketing presence with 100% integration of Time-Cap Laboratories.

•Strong distribution channel marketing for both OTC and Rx products.

OUTLOOK

•Strengthen company’s US operations in the coming years

•Add 4-5 new products to its portfolio during the year under review

Expansion Strategy for US

revenue FY 20

•50+ products in various therapy area segments

•Positioned in the niche soft gel category

•Strong distribution channel marketing for both OTC and RX products

•23 ANDAs filled till date

ORGANIC GROWTH

Expanding presence in other North American region

•Increase in ANDA fillings for soft gel dosage

•Partnership with leading retailers

•Exploiting untapped potential of drugs going off patent

NEW PRODUCTS IN PIPELINE

25 products identified with a focus on soft gels and OTC products

•15 products in R&D

INORGANIC GROWTH

Planning to acquire ANDAs to cut short development time

•Increasing capacity in India and US facility to meet future requirements

revenue fy 25

Expected to grow rapidly to achieve a high growth platform in FY25

Mfg Capabilities

Goa,India

Southport,UK

Farmingdale, USA

Key Focus Areas

STRATEGY

1. Expansion

1.Expansion of current product portfolio in regulated market

2 Product Launch

New product development and launch

3 Inorganic Expansion

Inorganic expansion to enhance manufacturing capabilities and product portfolio

4 Backward Integration

Backward integration into API manufacturing

GUJARAT GAS LTD - Q3 FY 21 - RESULTS ANALYSIS

2021-02-15T20:19:00.000-08:00

GUJARAT GAS LTD

Q3 FY 21 RESULTS ANALYSIS

Gujarat Gas is engaged in processing, transmission, and distribution of natural gas. It supplies gas to industrial, commercial and domestic customers.

MANAGEMENT

Anil Mukim Chairman

Sanjeev Kumar Managing Director

QUARTERLY RESULTS

Gujarat Gas (in Rs. Cr.)	Dec '20	Sep '20	Dec '19	YOY	QOQ
Net Sales	2886	2560	2564	12.54	12.73
TOTAL EXP	2381	1946	2320	2.66	22.35
Interest	24.32	33.87	46.46	-47.65	-28.2
P B T	523.96	634.32	263.25	99.04	-17.4
Tax	131.78	159.53	66.85	97.13	-17.39
FINAL NPT	392.3	475.48	197.3	98.83	-17.49
Equity Share	137.68	137.68	137.68	0	0
BASIC EPS	5.7	6.91	2.87	98.61	-17.51

MP 449.5

PE 19.71

VOLUME 8,66,539

FV 2

52 Week Range 190.5 477

Annual	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Sales	10,300	7,754	6,174	5,092	6,105
Total Expenditure	8,984	7,057	5,551	4,606	5,648
Net Profit	1,198	416	291	219	187

CASH FLOWS	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Operating Activities	1,419	956	782	700	637
Investing Activities	-466	-603	-430	-458	375
Financing Activities	-502	-349	-270	-251	-1,224
Others	0	0	0	0	0
Net Cash Flow	451	2	81	-8	-211

Performance Highlights - - of the third Quarter ended on 31" December 2020 jQ3 FY21)

Average gas sales volume for the quarter was at 11.44 mmscmd, up by 23% compared to corresponding quarter previous year.

During the current nine months period ended on 3Ist December 2020, the Company commercialised 83 new CNG stations. Detail of sales volume for current quarter is as under:

Sales Volumes (in mmscm) Q3 FY21

Industrial 843

CNG 142

PNG - Domestic 59

PNG - Commercial 9

Total in mmscm 1,053

The company's gas sales volume has shown a robust recovery post lockdown.

During the current quarter, in industrial and CNG category, the gas sales volume is up by 29% and 2% respectively compared to corresponding quarter previous year, and 16% and 20% respectively compared to previous quarter.

On Expenditure side - Raw Material consumption has gone up by 27% and other expenses have gone up by 11.31 % QoQ , which are the causes for reducing the Profit QoQ by over 17% QoQ.

The company currently continues to flow total gas volume above 11.50 mmscrnd as against FY20 average sales of 9.44 mmscrnd.

The Company currently has a comfortable liquidity position and prepaid term loans of Rs.988 crore during the nine months period ended on 3Ist December 2020, while continuing to service its debt obligations.

STRENGTHS

strong financials
Rising Net Cash Flow and Cash from Operating activity
Company with high TTM EPS Growth
Strong Annual EPS Growth
RoCE improving in last 2 years
Return on equity (ROE) improving since last 2 year
ROA improving since last 2 year

Growth in Quarterly Net Profit with increasing Profit Margin (YoY)
Increasing Revenue every quarter for the past 2 quarters
Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years
Annual Net Profits improving for last 2 years
Company with Zero Promoter Pledge
Recent Results : Growth in Operating Profit with increase in operating margins (YoY)
Strong Momentum: Price above short, medium and long term moving averages

WEAKNESSES

Decline in Net Profit with falling Profit Margin (QoQ)

OPPORTUNITIES

Brokers upgraded recommendation or target price in the past three months
Positive Breakout First Resistance ( LTP > R1)

Highest Recovery from 52 Week Low
RSI indicating price strength

Shareholding Pattern

Promoters holding remains unchanged at 60.89% in Dec 2020 qtr
Mutual Funds have increased holdings from 7.14% to 7.23% in Dec 2020 qtr.
Number of MF schemes remains unchanged at 25 in Dec 2020 qtr
FII/FPI have decreased holdings from 9.07% to 9.01% in Dec 2020 qtr
Number of FII/FPI investors increased from 206 to 207 in Dec 2020 qtr.
Institutional Investors have decreased holdings from 16.38% to 16.33% in Dec 2020 qtr

3 year CAGR growth

Revenue 26.6%

Net Profit 75.8%

Operating Profit 30.0%

TECHNICAL RATING : VERY BULLISH

Price Performance

1 Week 18.30%

1 Month 16.93%

3 Months 44.65%

YTD 19.38%

1 Year 49.01%

3 Years 164.12%

Buy Gujarat Gas; target of Rs 475: Emkay Global Financial

Emkay Global Financial is bullish on Gujarat Gas has recommended buy rating on the stock with a target price of Rs 475 in its research report dated February 06, 2021.

Interest cost declined 28% qoq, with net debt down 19% to Rs.7.0bn.

Gas sales volumes grew 16% qoq (23% yoy) to 11.45mmscmd.

Industrial PNG was up 17% qoq (29% yoy) to 9.2mmscmd, with Morbi up 20% to ~7.0mmscmd. On a yoy basis, CNG/Dom. PNG/Comm. PNG was up 2%/up 11%/down 18% to 1.5/0.6/0.1mmscmd.

Net realization fell 3% qoq, while gas cost rose 9%, resulting in a gross margin decline of 24% qoq to Rs.7.8/scm (an 18% beat though). Opex/scm fell 10% qoq to Rs.1.9 (down 12% yoy and 12% below est.). EBITDA/scm came in at Rs5.8, down 28% qoq/up 35% yoy.

Outlook

We raise FY21/22/23E EPS by 14%/16%/13%, building in 5-7% higher volumes as well as EBITDA/scm each, based on strong run-rate and management guidance. We increase our DCF-based TP by 27% to Rs475 with a lower 10% WACC. Retain Buy with OW.

Buy Gujarat Gas; target of Rs 505: ICICI Direct

ICICI Direct is bullish on Gujarat Gas has recommended buy rating on the stock with a target price of Rs 505 in its research report dated February 09, 2021.

Gujarat Gas’ Q3FY21 results were better than our estimates on all fronts.

Revenues increased 12.9% YoY at Rs 2829.4 crore (our estimate: Rs 2608.5 crore) as sales volume jumped 22.9% YoY during the quarter. Sales volume at 11.4 mmscmd was above estimate of 10.6 mmscmd.

Realisation was at Rs 26.9/scm (our estimate: Rs 26.7/scm).

Higher-than-expected realisation coupled with lower gas costs led to increase in gross margins that improved by Rs 1.2/scm YoY to Rs 7.8/scm (our estimate: Rs 7.3/scm).

EBITDA was at Rs 614.8 crore, up 65.9% YoY (our estimate: Rs 476.4 crore).

Subsequently, PAT increased 99.5% YoY to Rs 392.2 crore (our estimate: Rs 280.1 crore).

Outlook

We roll over valuations to FY23 and maintain BUY on the stock with a revised TP of Rs 505 (21x FY23E EPS) (earlier Rs 400/share).

RELIANCE INDUSTRIES LTD - Q3 FY 21- RESULTS PRESS STATEMENT - EXCERPTS - AND ANALYSIS

2021-02-01T00:45:00.000-08:00

RELIANCE INDUSTRIES LTD

Q3 FY 21 RESULTS

PRESS STATEMENT

- EXCERPTS -

AND ANALYSIS

22nd January 2021

RESULTS AT A GLANCE (Q-O-Q)

CONSOLIDATED - RIL

• Revenue for the quarter was Rs.137,829 crore ($ 18.9 billion) higher by 7.4%

• EBITDA before exceptional item for the quarter was Rs.26,094 crore ($ 3.6 billion) higher by 12.0%

• Net Profit before exceptional item for the quarter was Rs.15,015 crore ($ 2.1 billion) higher by 41.6%

• Cash Profit before exceptional item was Rs.21,473 crore ($ 2.9 billion) higher by 27.5%

• EPS before exceptional item was Rs.20.5 per share, increased 38.2%

STANDALONE – RIL

• Revenue for the quarter was Rs.71,454 crore ($ 9.8 billion) higher by 10.9%

• EBITDA before exceptional item for the quarter was Rs.12,306 crore ($ 1.7 billion) higher by 4.2%

• Net Profit before exceptional item for the quarter was Rs.8,744 crore ($ 1.2 billion) higher by 33.6%

• Cash Profit before exceptional item for the quarter was Rs.9,376 crore ($ 1.3 billion) higher by 30.2%

• Exports for the quarter was Rs.31,559 crore ($ 4.3 billion) decline of 8.5%

CONSOLIDATED RESULTS FOR QUARTER ENDED 31ST DECEMBER, 2020

· STRONG SEQUENTIAL REBOUND ACROSS ALL BUSINESSES

· HIGHEST EVER QUARTERLY CONSOLIDATED PAT BEFORE EXCEPTIONAL ITEMS AT Rs.15,015 CRORE

· RECORD QUARTERLY CONSOLIDATED EBITDA BEFORE EXCEPTIONAL ITEMS AT Rs. 26,094 CRORE

· RECORD QUARTERLY EBITDA FOR DIGITAL SERVICES AT Rs.8,942 CRORE

· HIGHEST EVER QUARTERLY EBITDA FOR RETAIL AT Rs.3,102 CRORE

· RIL AND BP ANNOUNCE THE START OF PRODUCTION FROM R CLUSTER, ULTRA-DEEP-WATER GAS FIELD IN BLOCK KG D6 OFF THE EAST COAST OF INDIA

STRATEGIC UPDATES

• Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries Limited (RIL) completed the capital raise of ₹ 47,265 crore for 10.09% equity stake. This is the largest fund raise in the sector.

• Reliance Industries Limited (RIL) and BP announced the start of production from the R Cluster, ultra-deep-water gas field in block KG D6 off the east coast of India. RIL and BP are developing three deepwater gas projects in block KG D6 – R Cluster, Satellites Cluster and MJ – which together are expected to meet ~15% of India’s gas demand by 2023. These projects will utilise the existing hub infrastructure in KG D6 block. RIL is the operator of KG D6 with 66.67% participating interest and BP holds 33.33% participating interest.

• The Company supported job creation in the economy during the pandemic-impacted period and generated in excess of 50,000 new jobs during April – December 2020 in Consumer businesses and last mile delivery.

CONSOLIDATED – JIO PLATFORMS LIMITED

• Revenue including access revenues for the quarter was Rs.22,858 crore ($ 3.1 billion) higher by 5.3%

• EBITDA for the quarter was Rs.8,483 crore ($ 1.2 billion) increase of 6.4%

• Net profit for the quarter was Rs.3,489 crore ($ 477 million) growth of 15.5%

• Total Customer base as on 31st Dec 2020 of 410.8 million, net addition of 5.2 million customers.

• ARPU during the quarter of ₹ 151.0 per subscriber per month as against ₹ 145.0 per subscriber per month in the trailing quarter

• Total data traffic during the quarter of 1,586 crore GB; 4.0% growth

CONSOLIDATED – RELIANCE RETAIL

• Revenue for the quarter was Rs.37,845 crore ($ 5.2 billion) lower by 7.9%

• EBITDA for the quarter was Rs.3,087 crore ($ 422 million) higher by 53.9%

• Net profit for the quarter was ₹ 1,830 crore ($ 250 million) higher by 88.1%

• Cash Profit for the quarter was ₹ 2,482 crore ($ 340 million) higher by 76.3%

• 12,201 operational physical stores; 327 stores opened during the quarter

• Area of operation – 31.2 million sq. feet as compared to 29.7 million sq. feet in trailing quarter.

OPERATIONAL HIGHLIGHTS

CONSOLIDATED JIO PLATFORMS LIMITED (In ₹ crore)	3Q FY21		2Q FY21		% chg. w.r.t. 2Q FY21		9M FY21
Value of Services	22,858		21,708		5.3%		64,843
Revenue from Operations	19,475		18,496		5.3%		55,225
EBITDA	8,483		7,971		6.4%		23,786
EBITDA margin*		43.6%		43.1%		43.1%
Net Profit	3,489		3,020		15.5%		9,029

• JPL has achieved a milestone this quarter with annualised revenue run-rate in excess of US$ 10 billion with strong Revenue and EBITDA growth.

• Consolidated Value of Services, including access revenues, grew by 5.3% Q-o-Q to ₹ 22,858 crore on back of higher ARPU and FTTH expansion.

• Consolidated EBITDA grew by 6.4% Q-o-Q to ₹ 8,483 crore and EBITDA margin of 43.6% up from 43.1% Q-o-Q owing to growing revenue and operating leverage.

• Consolidated Net Profit grew by 15.5% to ₹ 3,489 crore, Q-o-Q

• Total Customer base as on 31st Dec 2020 of 410.8 million, net addition of 5.2 million customers.

• ARPU during the quarter of ₹ 151.0 per subscriber per month as against ₹ 145.0 per subscriber per month in the trailing quarter

• Total data traffic during the quarter of 1,586 crore GB; 4.0% growth Q-o-Q

• Total voice traffic during the quarter of 97,496 crore minutes; 4.6% growth Q-o-Q