Granules India Limited

Krishna Prasad

CMD, GRANULES INDIA LIMITED

Kvs Ram Rao

JOINT MD AND CEO, GRANULES INDIA LIMITED

Priyanka Chigurupati

EXECUTIVE

Sandip Neogi

CHIEF FINANCIAL OFFICER, GRANULES INDIA LIMITED

Ashish Chovatia

ORIENT CAPITAL

Krishna Prasad Sir

CMD; Dr. KVS Ram

Sandip Sir

Chief Financial Officer.

INR 1020 Crore

ad a decent performance in Q1 and see positivity going forward. Our revenues for the quarter were INR 1020 Crore with EBIDTA of INR 212 Crore and PAT at INR 128 Crore. Compared to Q1 of the previous fiscal year,

INR 212 Crore

and see positivity going forward. Our revenues for the quarter were INR 1020 Crore with EBIDTA of INR 212 Crore and PAT at INR 128 Crore. Compared to Q1 of the previous fiscal year, we had a 20% growth in reven

INR 128 Crore

forward. Our revenues for the quarter were INR 1020 Crore with EBIDTA of INR 212 Crore and PAT at INR 128 Crore. Compared to Q1 of the previous fiscal year, we had a 20% growth in revenue, 10% growth in gross

20%

TA of INR 212 Crore and PAT at INR 128 Crore. Compared to Q1 of the previous fiscal year, we had a 20% growth in revenue, 10% growth in gross margin, 5% growth in EBIDTA and 6% growth in PAT. We had r

10%

PAT at INR 128 Crore. Compared to Q1 of the previous fiscal year, we had a 20% growth in revenue, 10% growth in gross margin, 5% growth in EBIDTA and 6% growth in PAT. We had recorded a sequential gr

5%

red to Q1 of the previous fiscal year, we had a 20% growth in revenue, 10% growth in gross margin, 5% growth in EBIDTA and 6% growth in PAT. We had recorded a sequential growth in terms of absolute va

6%

s fiscal year, we had a 20% growth in revenue, 10% growth in gross margin, 5% growth in EBIDTA and 6% growth in PAT. We had recorded a sequential growth in terms of absolute values in gross margin, EB

INR 180 Crore

ability. As you can see from our investor presentation, our operational cash flow had increased to INR 180 Crore as compared to INR 75 Crore in the last quarter. Our free cash after a capex expenditure of INR

INR 75 Crore

our investor presentation, our operational cash flow had increased to INR 180 Crore as compared to INR 75 Crore in the last quarter. Our free cash after a capex expenditure of INR 82 Crore was INR 98 Crore. An

INR 82 Crore

rore as compared to INR 75 Crore in the last quarter. Our free cash after a capex expenditure of INR 82 Crore was INR 98 Crore. And we expect this to improve going forward due to various measures that are in

INR 98 Crore

to INR 75 Crore in the last quarter. Our free cash after a capex expenditure of INR 82 Crore was INR 98 Crore. And we expect this to improve going forward due to various measures that are in process. During

22.5%

key studying material for metformin. Our European business had seen good traction and contributed 22.5% to our Q1 revenue. The growth for Europe in upcoming years will be driven majorly by partnership b

“I'm happy to inform you that we had a decent performance in Q1 and see positivity going forward.”

“And we expect this to improve going forward due to various measures that are in process.”

“The growth for Europe in upcoming years will be driven majorly by partnership business model.”

“Our endeavor for the whole of the balance year quarter-by-quarter will be to make sure that we generate more cash and bring the debt situation down.”

“If you could provide an update on the pricing and more on the end-user pricing in terms of customers and how you see this trend actually going forward?”

“And also, we also sell not only APIs and PFIs to the top brands, we also sell our tablets to these people, and we also have our GCH, Granules Consumer Health in the US through which we sell different types of paracetamol tablets to all the chain stores like Walmart and Target and other people.”

“There will be a downward trend based on the price of PAP.”

“And my next question was on peptides, if you could provide like a similar guidance or outlook on how you see the pricing evolve in going forward?”

“And going forward, if nothing else happens or unexpected happens in the world, we definitely see prices coming down quarter-on-quarter, and overall, there have been improvement and availability has no problem right now.”

“And based on the overall situation in international market, we will possibly double that production going forward.”

Krishna Prasad

33

Moderator

11

KVS Ram Rao

10

Yogesh Tiwari

10

Tushar Manudhane

6

Sandip Neogi

4

Varun Pattani

4

Harith Ahmed

3

Sreesankar

3

Deepan Sankaranarayanan

3

Krishna Prasad

Ladies and gentlemen, good day and welcome to the Q1 FY’23 Earnings Conference Call of Granules India Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘* and ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ashish Chovatia of Orient Capital. Thank you and over to you, sir. Thank you, Cathy. Good morning everyone. I am Ashish Chovatia from Orient Capital, and we are Investor Relations Advisor to the company. I hope that all of you and your families are safe and healthy. On behalf of Granules India Limited, I extend a very warm welcome to all participants on Q1 FY’23 financial results discussion call. Today on the call I am joined by Dr. Krishna Prasad Sir - CMD; Dr. KVS Ram Rao Sir - Joint MD and CEO; Ms. Priya

KVS Ram Rao

board of directors have approved a buyback at INR 400 per share at a total value of INR 250 Crore. After the year marked amount of INR 300 Crore for capex during the year. We are confident of ending this year with a much-improved cash flow and lower net debt position compared to FY’22 and it is proven to reward our shareholders. While the current business model continues to grow, we are all excited about our journey toward Granules 2.0 and I request Dr. Ram Rao, JMD and CEO to take you through this journey. Thank you, Mr. Chairman. Hello everyone. As a part of Granule’s long-term strategy, science, technology and innovation has been identified as an important strategic lever and key to our success by enabling us to offer differentiation and global cost leadership position in the market. Our strategy aims at creating technology platforms in chemistry and biotransformation through partnerships and internal innovations. We continue to build the organization aligned to the transformation a

Sandip Neogi

Thank you, sir. Let me now take you through the top financial performance for the quarter. Revenue: The first quarter revenue was INR 1020 Crore as compared to INR 850 Crore in Q1 FY’22, a growth of 20%. This growth is mainly caused by increase in the business across all regions and by our new launches in the US region. Revenue share of noncore molecules stood at 18%, which is a percentage high than the last year, which emphasizes our long-term strategy. The sales breakup as per the business verticals and regions are presented in our investor presentation, which is available on the website. Gross Margin: Our gross margin as a percentage for Q1 contracted by 4.6% year- on-year mainly it due to pricing pressures in the US and also increase in the cost of key starting materials, solvents and logistics. EBIDTA and EBIDTA margin: EBIDTA for the quarter was INR 212 Crore as compared to INR 201 Crore in the previous year. Same quarter as increase of 5% over the previous year mainly on account

Krish Mehta

Okay. Thank you. And my next question was on peptides, if you could provide like a similar guidance or outlook on how you see the pricing evolve in going forward?

Krishna Prasad

I was asking more from a broader perspective in terms of the raw materials and input prices. Oh, I thought it was peptide, I was wondering what… Yes, raw material pricing, at least the increase has stopped, and they have stabilized and we see some slow downward trend. And going forward, if nothing else happens or unexpected happens in the world, we definitely see prices coming down quarter-on-quarter, and overall, there have been improvement and availability has no problem right now.

Krishna Prasad

Yes. So, thanks for taking my question. One question on DCDA, if you can share some details regarding what would be the capacity for the DCDA and how will it contribute to the financials? So, what would be the cost savings and what is the requirement per unit of metformin? So, if you can share some details on it and the timelines basically. Let me start with capacity. We have the PLI sanction for 8,000 tons per annum and we will start production at that level. And based on the overall situation in international market, we will possibly double that production going forward. And pricing and the outlook with the imports coming in from China we definitely believe we have a slightly better differentiated technology unlike what Chinese use. And we think we will be slightly cost competitive, but the main thing here is supply security rather than cost. Definitely there'll be a little advantage, which will add to it. And consumption coefficients, I think that's what you have asked, yes, it's le