Aarti Drugs Limited
6,538words
5turns
0analyst exchanges
0executives
Key numbers — 40 extracted
rs,
Rs. 100
crore
Rs.
2,500
Rs. 2,000
Rs.
200
Rs. 200
Rs. 1,000 crore
100%
Rs. 100 crore
4,077
MT
37%
80%
Guidance — 5 items
Empowerment
opening
“• CRAMS industry has posted 48% CAGR between FY15-18 and expected to witness a strong growth over 25% over 2018-21 Formulations Biosimilars • Largest exporter of formulations in terms of volume, with 14% market share and 12th in terms of export value.”
Empowerment
opening
“❑ Outlay: ₹ 15,000 crore worth of incentives for 6 years (for financial years 2020-21 to 2028-29) ❑ Incentives: The rate of incentive on incremental sales (over base year) of pharmaceutical goods covered under Category 1 & 2 will be 10% for FY 2022-23 to FY 2025-26, 8% for 2026-27 and 6% for 2027-28.”
Empowerment
opening
“The rate of incentive on incremental sales (over base year) of for pharmaceutical goods covered under Category-3 will be 5% for FY 2022-23 to FY 2025-26, 4% for 2026-27 and 3% for 2027-28.”
Empowerment
opening
“❑ Received approval for 2-Methyl-5Nitro-Imidazole (2-MNI) with a committed production capacity of 4,000 MTPA and a committed investment outlay of ~ ₹78 crores under Target Segment III (Key Chemical Synthesis Based KSMs/Drug Intermediates) ❑ Expecting ~ ₹80 crores of incentives over 6 years through this scheme ❑ This will help the company to diversify its product portfolio, increasing the top-line, and enhancing the profitability & margin profile.”
Empowerment
opening
“❑ Backed by a strong balance sheet, and robust free cash flow the committed capex will be funded mostly generation, through internal accruals 23 Aarti 2.0: Sustainable Growth & Long-term Value Creation 1.”
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Risks & concerns — 1 flagged
stringent product quality control, strict QA and QC dept to ensure that product is at the mark of the quality as per various pharma copeial standards • The Board has an optimum combination of Executive and Non-Executive directors and gender diversification • Risk Management Governance • Occupational Healthy Policy • Policies governing related party transactions • In compliance with all regulatory requirement of the Audit Committee • Mechanism of Stakeholders Board.
— Empowerment
Speaking time
1
1
1
1
1
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Opening remarks
Empowerment
Free Government approved and certified vocational course training for women to generate employment. • Healthcare: Primary Healthcare Infrastructure Development and Improvement around the manufacturing facilities. • Gender Diversity: ~40% women staff at HO, contributing in various departments such as marketing, factory level, women are employed at QC QA, regulatory affairs, etc. departments. finance, procurement. At • Stakeholder Management: No unfair trade practices events in the last 5 years. stringent product quality control, strict QA and QC dept to ensure that product is at the mark of the quality as per various pharma copeial standards • The Board has an optimum combination of Executive and Non-Executive directors and gender diversification • Risk Management Governance • Occupational Healthy Policy • Policies governing related party transactions • In compliance with all regulatory requirement of the Audit Committee • Mechanism of Stakeholders Board. periodic Relationship reporting
Barriers
Presence in Highly Specialized API Segment 2. Unique Competitive Position 6. Capex to drive the next leg of growth 3. Poised to overcome industry challenges 5. Robust Balance Sheet 4. Diversified product and client mix High Entry Barriers : Presence in Highly Specialized API Segment Over a decade, API manufacturing has transitioned towards highly regulated, specialized business How API Manufacturing Has Evolved Impact Regulations ❑ Stringent pharmacopoeia standards ❑ Addition of elemental ❑ Tightened impurity profiling ❑ Rigorous carcinogenicity checks Cost Structure Higher capex requirements to adhere to ever rising quality, environmental & regulatory requirements High R&D costs Tightened Regulations Quality & Environmental Standards Higher Capex Requirements ❑ Lower Competitive Intensity: Various small-scale manufacturers have exited due to unviability of cost structure ❑ High Entry Barriers: High entry barriers for new entrants due to cost structure and compliance requirements ❑ API
Captive consumption
Rs. 300 crores Revenue Growth Higher Margins Higher RoCE 30 Product-wise Capex Plans Anti Diabetic Anti - Fungal ▪ CEP approval in 2016 which opened up European markets ▪ Manufacturing over 1,000 TPM making it one of the largest metformin player ▪ Coming up with 2,000 TPM capacity via brown field expansion in Phase I ▪ Launch of Gliptins will further strengthen this therapeutic category. ▪ Further consolidation of its worldwide leading position. ▪ Recently expanded the capacity, further extending the lead. Speciality Chemicals ▪ Incremental expansion of our multipurpose chloro-sulphonation line in existing block Fluoro-Quinolones ▪ Further 40% brown field expansion of one antibiotic product ▪ Greenfield expansion in near future R&D Product Pipeline Antiprotozoal ▪ Strong pipeline of products under R&D for future growth ▪ Further consolidating the position in Indian Market. Existing technology and Chinese JV. ▪ Contract manufacturing of specialty chemicals and intermediates ▪ Incrementa
Investor Relations Advisor
CIN: L37060MH1984PLC055433 CIN: U74140MH2010PTC204285 Mr. Rushikesh Deole Email: investorrelations@aartidrugs.com Contact no.: +91 22 24048199 Mr. Jigar Kavaiya / Mr. Chinmay Madgulkar E: jigar.kavaiya@sgapl.net / chinmay.m@sgapl.net T: +91 9920602034 / +91 9860088296 www.aartidrugs.com www.sgapl.net
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