- Revenues for the full year were ₹4936 Cr (3% growth YoY). Gross margin was at 55.6% and EBITDA margin was 29.1%
- There was significant volatility in the cost of raw materials, solvents and energy. The disruption in the supply chain and logistics has increased mainly due to the war in Russia and lockdowns in China. This is expected to continue in Q1 and normalization is expected from Q2 onwards.
- They invested significantly in capacity + R&D and built new partnerships in CDMO during the year despite a lot of disruption in the business environment.
- They forayed into the CAR-T cell technology during the year by acquiring a minority stake in ImmunoACT
- They are confident of achieving $1 Billion in sales in FY23 based on several product approvals, good progress in multi-site capex and order book visibility.
- They are seeing recovery in the LMIC markets compared to previous quarters which were impacted due to stocking at various channels.
- Dolutegravir continues to remain the preferred treatment regimen and they believe its use will expand to the second line and pediatric treatment as the new standard of care. They received final approval for the Lopinavir+Ritonavir combination and launched in the US market.
- They filed 1 ANDA during the quarter and a total of 4 ANDAs for FY22. They received 3 approvals during the quarter and a total of 5 approvals for FY22. They have 5 products launched in Canada and they intend to launch 2 more in the next few quarters.
- They have validated 2 products for the European market as part of a contract manufacturing partnership. They expect significant revenues from these products in FY23.
- They have a total of 31 ANDAs in the US of which 15 are Para IV filings and 10 first-to-file opportunities. They have a product specific approach when it comes to new products, not market specific.
- Brownfield expansion at Unit 2 is under qualification and will be ready by end of Q1.
- Sales from Oncology APIs was ₹72 Cr for the quarter (growth of 68%). They currently have one of the largest high-potent API capacities in India and they are going to add some new capacities in the next year as well.
- On the multi-year multi-product contract for CDMO, they executed some quantities in Q2 FY22. The capex for this project is on a fast-track.
- The capex for CDMO, which includes a dedicated R&D center and 3 manufacturing units in Vizag is progressing well. The new sites will have capabilities to handle steriles, hormones and high-potent molecules as well.
- They are ramping up the 180KL fermentation capacity. Full operational benefits of new capacities to reflect in FY23. They are doing some de-bottlenecking to further enhance capacity.
- They will be adding new fermentation capacity by the end of FY24 which will help growth in FY25. They are also in process to acquire an additional land parcel with a plan to create close to 1 million liters fermentation capacity.
- There was significant price reduction (around 10%) in ARV APIs and formulations which lead to lower gross margins. They do not expect prices to go down further and believe this is the new base. However, recovery in prices is also not expected
- Gross margins are expected to go up from here as prices of raw materials, solvents and energy start to normalize. They believe margins will not go down any further. They are also confident of achieving 30% EBITDA margins next year.
- Management believes the business has sufficient room for secular growth and they will not need a one-off to reach their $1 Billion revenue target.
- They have no plans to go into therapeutic proteins until FY25. They will be focusing on recombinant food proteins.
- Currently, their capacity is shared between Generic APIs and CDMO. As they find new opportunities, they will be creating dedicated capacities for CDMO. The new greenfield capacity coming up is specifically for CDMO. They will be starting with a reactor capacity of 600 cubic meters.
- They are currently running at optimum capacity for APIs and new capacity is expected to come online by end of FY23.
- Currently, ARV APIs contribute to about 25% of revenues and CDMO business contributes about 20%. The contributions are expected to stay the same for next year but revenues from both are expected to increase.
- They believe they need 3 things to achieve the $1 Billion target – capacities, products and markets. And they believe that they have all 3 of these things.
- They have increased their capex guidance by ₹500-600 Cr because they believe there are opportunities that will be there in the future which they want to be ready for.