MARKSANS PHARMA LTD - Q3 FY 21 RESULTS ANALYSIS

 

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