BAJAJ HEALTHCARE LTD - Q3 FY 21 RESULTS ANALYSIS

 

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%