INDOCO REMEDIES LTD - Q2 FY 21 - RESULTS ANALYSIS

 

INDOCO REMEDIES LTD

Q2 FY 21 RESULTS ANALYSIS

DT 10 12 2020

 

COMPANY OVERVIEW                  

Indoco Remedies Ltd is engaged in the manufacturing and marketing of Formulations (Finished Dosage Forms) and Active Pharmaceutical Ingredients (APIs) in India.

Indoco has a strong international presence in the regulated and ROW (Rest of the World) markets.

The Company has a well-built brand portfolio of a number of products in various therapeutic segments, including high growth life style segments such as Anti-Diabetics, Cardiovascular, Central Nervous System, Musculo-Skeletal, Nutrition and Dental care.

The product range of the company includes Active Pharmaceutical Ingredients :- Tramadol HCl Antiallergic Cetirizine 2HCl Antiasthmatic Montelukast Sodium Salbutamol Sulphate Salmmetrerol Xenofoate Antibacterial Azithromycin Dihydrate Ciprofloxacin HCl Erythromycin Stearate Erythromycin Estolate Erythromycin Ethyl Succinate Anticonvulsant Lamotrigine Pregabalin* Antidepressant Quetiapine Fumarate Sertraline HCl Venlafaxine HCl.Formulation Products :-Anti-cold, Anti-spasmodic, Anti-infective, Anti-inflammatory, Stomatologicals, Anti-fungal, Cough and Cold preparations, Cardiovascular, Multivitamins, Anti- hypersensitive Toothpaste, Anti-septic Gel, Oral NSAIDs, Antibacterial Mouthwash and Gel etc                

Management                  

Suresh G Kare            Chairman     

Aditi Panandikar          Managing Director

 

Indoco Remedies (in Rs. Cr.)	Sep '20	Jun '20	Sep '19	YOY	QOQ
Net Sales	328.24	275.86	286.21	14.69	18.99
Net Profit	25.65	17.04	7.81	228.43	50.53
Equity	18.43	18.43	18.43	0	0
Basic EPS:FV 2	2.78	1.85	0.85	227	50
Other Operating Income	--	--	6.36
Total Income From Operations	328.24	275.86	292.57	12.19	18.99
EXPENDITURE
Raw Materials	76.97	62.65	71.04	8.35	22.86
Traded Goods	14.36	18.4	25.3	-43.24	-21.96
Increase/Decrease in Stocks	-1.12	0.57	-6.75	-83.41	-296.49
Employees Cost	75.15	65.83	64.14	17.17	14.16
Depreciation	18.57	19.13	18.04	2.94	-2.93
R & D Expenses	--	--	11.64
Other Expenses	102.16	79.76	94.57	8.03	28.08
Total Expenditure	286	246	277	3.25	16.26
EBIT	42	29	15	180	44.83
P/L Before Other Inc., Int., Excpt. Items & Tax	42.15	29.52	14.59	188.9	42.78
Other Income	0.52	0.26	0.58	-10.34	100
P/L Before Int., Excpt. Items & Tax	42.67	29.78	15.17	181.28	43.28
Interest	5.89	5.75	5.37	9.68	2.43
P/L Before Tax	36.78	24.03	9.8	275.31	53.06
Tax	11.13	6.99	1.99	459.3	59.23

      

MP  293

PE   26.35    

VOLUMES      2,17,175

FV   2    

52 Wk L/H     145.25   311

TECHNICAL RATING          

BULLISH

ANNUAL RESULTS
Annual	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Sales	1,106	968	1,041	1,074	1,008
Net Profit	24	-2	41	77	81
Other Income	2	6	4	3	1
Total Income	1,109	974	1,046	1,078	1,009
Total Expenditure	1,054	963	974	981	898
EBIT	54	11	71	97	111
Interest	26	20	23	6	12
Tax	4	-6	7	13	16

 

CASH FLOWS	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Operating Activities	122	132	122	88	112
Investing Activities	-55	-103	-135	-170	-110
Financing Activities	-63	-16	-38	131	-1
Others	0	0	0	0	0
Net Cash Flow	2	12	-51	49	0

 

HISTORICAL PRICES
3 YRS BEF	268.45
2YRS BEF	216.05
1YR BEF	163
3 MON BEF	218.6
1 MON BEF	260.6
1 WEEK	265.65
NOW	293

 

Type	Dividend%	Ex-Dividend date
Final	15	Sep 18, 2020
Final	15	Aug 22, 2019
Final	50	Aug 31, 2018
Final	80	Jul 31, 2017
Final	10	Jul 20, 2016

 

Share Holding Pattern in (%)
Standalone	Sep-20	Jun-20	Mar-20	Dec-19
Promoters	58.69	58.69	58.69	58.69
Pledged	0	0	0	0
FII/FPI	2.22	2	1.97	2.02
Total DII	20.06	19.69	20.39	20.27
Fin.Insts	0	0.03	0.02	0.02
Insurance Co	0.14	0	0	0
MF	14.29	14.52	15.51	15.12
Others DIIs	5.63	5.14	4.86	5.13
Others	19.04	19.63	18.95	19.02
Total	100.01	100.01	100	100

 

 

Per Share Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Basic EPS (Rs.)	2.62	-0.32	4.47	8.36	8.89
Diluted Eps (Rs.)	2.62	-0.32	4.47	8.36	8.89
Book Value [Excl. Reval Reserve]/Share (Rs.)	73.75	71.69	73.25	70.68	62.56
Dividend/Share (Rs.)	0.3	0.3	1	1.6	1.6
Face Value	2	2	2	2	2
Margin Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Gross Profit Margin (%)	11.35	8.54	13.4	14.92	17.05
Operating Margin (%)	4.95	1.15	6.9	9.03	11.04
Net Profit Margin (%)	2.17	-0.29	3.95	7.17	8.12
Return Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Return on Networth / Equity (%)	3.54	-0.43	6.09	11.83	14.21
ROCE (%)	6.74	1.38	8.76	12.04	12.85
Return On Assets (%)	1.89	-0.23	3.32	6.43	8.71
Liquidity Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Current Ratio (X)	1.23	1.21	1.29	1.47	1.53
Quick Ratio (X)	0.77	0.8	0.83	0.99	0.98
Leverage Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Debt to Equity (x)	0.3	0.37	0.35	0.38	0.22
Interest Coverage Ratios (%)	2.09	0.55	3.06	15.64	8.98
Turnover Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Asset Turnover Ratio (%)	87.02	76.98	84.16	89.8	107.18
Inventory Turnover Ratio (X)	5.31	5.28	5.39	5.75	6.05
Valuation Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
P/E (x)	0	-632.19	47.46	29.8	32.68
P/B (x)	2.84	2.83	2.88	3.54	4.6
EV/EBITDA (x)	16.67	25.05	15.49	15.53	16.08
P/S (x)	1.74	1.93	1.86	2.14	2.63
Growth Ratios	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
3 Yr CAGR Sales (%)	0.98	-1.33	6.73	13.63	16.92
3 Yr CAGR Net Profit (%)	--	--	--	9.92	24.21

 

Valuation

Market Cap (Rs Cr.)    :     2,698.62

P/E               :                   47.13

Book Value (Rs)          :     73.75

Dividend (%)              :     15

Industry P/E                :     39.49

EPS (TTM)                  :     6.2

P/C                             :     21.08

Price/Book                  :     3.97

Dividend Yield.(%)      :     0.1

Face Value (RS)          :     2

Deliverables (%)        :     40.62    

Chairman's Message at the 73rd AGM DT September 24, 2020

The Domestic formulation business witnessed a double digit growth of 13.2 % at Rs.686 crore.

The Company launched eight new products, five in Cardiology, two in Diabetology and one in Dermatology segment, including two new promising products, Alogliptin with brand Aloja, and Apixaban with brand Apixabid.

Aloja was launched for the first time in India and offers once a day dosage, which facilitates better compliance for Diabetic patients with high pill burden.

Apixabid launched in December 2019 is one of the safe and highly effective Novel Oral Anti-Coagulants.

Currently, the launch activities for Apixabid are on hold in India, as Indoco is contesting a patent infringement case filed against it in the Delhi High Court by the innovator.

Although, the outcome of the patent infringement case cannot be ascertained, Indoco is strongly defending the case and expecting vacation of the stay.

On the Regulatory front, the Company has done considerable work and has developed capabilities to address the evolving regulatory guidelines. You will be glad to know that the Company has addressed most of the regulatory issues at the manufacturing sites.

The Company has submitted compliance updates to the USFDA with respect to Goa Plant I and an inspection (virtually or on-site), is expected.

In FY20, International business registered a growth of 26.9 % with revenues at Rs. 296 crore.

As a consequence of withdrawal of warning letter issued to Goa Plant II and III, the Company has started receiving approvals against its ANDAs and Dossiers, which will boost the sales for International business in the coming years.

The net revenue from API business was at Rs. 86.0 crore. The expanded capacity at the new plant will cater mainly for the internal consumption and will also help in growth of external API business.

As on date, the Company has filed 90 process patent applications for API intermediates & Finished Dosages, out of which 34 have been granted. In January 2020, the Company was honoured with the IDMA Margi Memorial Best Patent Awards for 2 of its Formulation Patents.

While we were moving well on the growth trajectory, the Covid-19 pandemic struck all of us unexpectedly. The lockdown coincided with the closing of FY20, which impacted the performance of our Domestic sales to some extent, as supply chain was interrupted.

The International sales also had an impact as the government banned Paracetamol exports in the month of March 2020. However, the Company took up the matter with respective authorities and Indoco became a part of the initiative by the Indian and British Government to resume the supply of Paracetamol tablets to United Kingdom.

The first shipment after the ban of Paracetamol tablets to the UK was airlifted on 12th April, 2020 from our Goa manufacturing site. The restriction was subsequently withdrawn completely.

“Indoco Remedies Q2 FY2021 Earnings Conference Call”

November06,2020

business highlights. Net revenues for the quarter grew in double-digits by 12.9% at Rs.322.5 Crores against Rs.285.6 Crores and for the first half of the year revenues grew by 10.6% at Rs.589.3 Crores as against Rs.532.8Crores.

EBITDA to net sales for the quarter is at 18.7% at Rs.60.2 Crores compared to 11.3% at Rs.32.1 Crores and for the first half of the year, the EBITDA is 18.5% at Rs.109 Crores compared to 10.3% at Rs.52.9Crores.

PAT for the quarter is at 7.8% at Rs.25.1 Crores compared to 2.6% at Rs.7.3 Crores and for the first half of the year, the PAT is 7.2% at Rs.42.3 Crores compared to 1.8% at Rs.9.5 Crores.Now onto the Domestic formulations business Indian pharma market for the first time has bounced backaftermonthsofCOVID-19 crisis and registered a growth of 4.5% in September 2020 giving a positive growth for Q2. Indoco ranks 29 th in the IPM with market share of 62%, the source of this information is AWACS. Interms of prescription generation Indoco’s rank is maintained at 23rd in pre-COVID and during COVID period with market share of 0.7%. The source is SMSRC, July, August 2020.

Revenue from domestic formulation business degrew by 6.2% for the quarter at Rs.174.7 Crores as against Rs.186.3Crores and for the first half revenue degrew by 7.4% at Rs.322.2 Crores against Rs.347.9 Crores. During thequarter,FEVINDO-400 was launched for the treatment of mild-to-moderateCOVID-19cases. FEVINDO-400, Favipiravir is an antiviral drug effective against the RNA-based influenza virus. The drug has been approved by DCGI in the treatment of COVID-19.

FEVINDO400 reduces pill burden by 50% and ensures convenient dosing and better patient compliance. The company’s brand name lyKarvolPlus, ATM, FebrexPlus and Rexidin SRS mouth was hare being used in the prevention of COVID-19. With the launch of FEVINDO the company has moved to the next step from prevention to treatment of COVID-19.

Now on the international business front; during the quarter revenues from international formulation business grew by 63.7% at Rs.121.4 Crores as against Rs.74.1Crores and for the first half of the year, revenues grew by 62.5% at Rs.216.8 Crores as against Rs.133.5 Crores.

On a narrow base, US revenue grew by 295% at Rs.43.4 Crores as against Rs.11 Crores and for first half revenues grew by 415% at Rs.70.3 Crores as against Rs.13.6 Crores. In September 2020, Indoco received the approval for Apixaban 2.5mg & 5 mg tablet. Apixaban is a anticoagulant blood thinner and is used for patients with help problems caused by blood clotting.

During the quarter, the company dispatched four products to US for launched by partners.

The products include three injectables namely Phenylephrine, Palonosetron, Zoledron icacidan donesolid dosagen amelyFebuxostat tablet.

The company received repeat orders and encouraging forecast for the product shift in the first quarter FY20 21.

Europe revenues grew by 42.7% at Rs.56.1 Crores as against Rs.39.3 Crores and for the first half revenue grew by 34.9% at Rs.104 Crores as against Rs.77.1Crores.

Revenue for  SouthAfrica, Australia and NewZealand grew by 38% at Rs.1.8 Crores as against Rs.1.3 Crores and for the first half revenue degrew by 13% at Rs.3.5 Crores as against Rs.4.1Crores. Revenues from emerging markets were at Rs.20 Crores as against Rs.22.5 Crores and for the same quarter last quarter and for first half revenues were at Rs.39 Crores as against Rs.38.6 Crores.

Now on the regulatory update on Goa plant one. Periodic compliance updates are being timely submitted to the US FDA agency and inspection of the site by the US health regulator virtually, is on site is anticipated to be scheduled. API and CRO business revenues were at Rs.22.8 Crores as against Rs.23.4 Crores for this business. For the first half revenues were at Rs.45 Crores against Rs.47.1 Crores.

Revenues from CRO and analytical services business were at Rs.3.5 Crores against Rs.1.8 Crores and for the first half revenues were at Rs.5.2 Crores as against Rs.4.4 Crores. That is all about the business high light for the second quarter.