JB Chemicals & Pharmaceuticals Limited

30%

he challenging operating environment. During Q1 FY'23, revenues on a reported basis increased by 30% year-on- year to INR 785 crore. Domestic f ormulations delivered good growth and crossed a revenue

INR 785 crore

ting environment. During Q1 FY'23, revenues on a reported basis increased by 30% year-on- year to INR 785 crore. Domestic f ormulations delivered good growth and crossed a revenue INR 400 crore in a quarter. Th

INR 400 crore

year-on- year to INR 785 crore. Domestic f ormulations delivered good growth and crossed a revenue INR 400 crore in a quarter. This is all-time high revenue that we have generated f or India business as on today

2.6 crore

number 15 in IPM as per IQ. And also happy to report that J.B's. prescription base increased f rom 2.6 crore prescription in quarter 1 FY'22 to 4.09 crore in quarter 1 FY'23, growing at 57%. Just to give

4.09 crore

report that J.B's. prescription base increased f rom 2.6 crore prescription in quarter 1 FY'22 to 4.09 crore in quarter 1 FY'23, growing at 57%. Just to give brief highlights on what has been happening in

57%

ased f rom 2.6 crore prescription in quarter 1 FY'22 to 4.09 crore in quarter 1 FY'23, growing at 57%. Just to give brief highlights on what has been happening in our inorganic business that we acqu

INR 33 crore

we have also completed the acquisition of 4 paedia brands, on a combined basis, this account f or INR 33 crore in sales in FY'22. This acquisition will provide J.B. a comprehensive portf olio with well-known b

INR 100 crore

ions during quarter 1 FY'23 as we reported. Also happy to share that we could surpass a revenue of INR 100 crore f or quarter 1 FY'23 in the world of CDMO segment, which is ever highest that we have achieved. Wi

rs,

consistent execution in the world of CMO segment through new launches as well as adding new partners, healthy mix between private and public market in South Af rica and continued demand revival in sele

20%

al business reached new highs during the quarter. The reported revenue growth of 30% comprised of 20% organic growth and the rest coming through the new acquisitions made last quarter and t his quarte

INR 418 crore

lar also aided our growth. Overall, f or the quarter, the domestic business reported a revenue of INR 418 crore, and international business reported a revenue of INR 366 crore, which is a growth both year-on-ye

INR 366 crore

tic business reported a revenue of INR 418 crore, and international business reported a revenue of INR 366 crore, which is a growth both year-on-year and quarter-on-quarter. The gross margin f or quarter 1 came

“Our aspiration in domestic market is to make our big brands bigger, f ocus on both market share and prescription gains f or our acquired portf olio and organic portf olio, target f ocused lif e cy cle management in existing brands and pursue new brand launches, which will continue to do as committed.”

“Overall, we hope to sustain the gross margin closer to 64% f or the f iscal with the March improvement coming through in Azmarda margins on the expiry of LOE.”

“Given the high inf lation prevailing across the world, we've been trying to maintain our operating margins in the range of 24% to 26%, and this quarter's operating margin was in line with our guidance.”

“Our guidance f or overall year f or CDMO business, the way trajectory we are looking at and this quarter, we could plunge INR 100 crore, we will continue to see plus/minus 10% demand f or which we have order book f or next 3 to 4 months.”

“So you are saying that FY'23, the CDMO business contribution to f ull year revenues will be around 13%, 14%?”

“And right now, what is stopped on the agenda is to how to at least have critical mass of patients who are getting diagnosed, and this is overall more benef icial f or the patient community and post LOE sets in, let us look at it in terms of where the price sets in because it will be overall more benef it for the Indian population who will be getting quality medicine at af f ordable price.”

“So going f orward, can we expect that the impact would be closer to 100 basis points then on a normalized basis?”

“Chemicals which will be working with higher cost of inventory in FY'22 because there was a lot of procurement that was done towards second half of FY'22.”

“And sir, you also had given up EBITDA margin guidance of 24% to 26% f or FY'23.”

“So the guidance that we have given is a guidance of range between 24% to 26%.”

Nikhil Chopra

19

Lakshay Kataria

9

Jason D'Souza

4

Moderator

4

Anubhav Aggarwal

4

Nikhil Mathur

3

Rashmi Sancheti

3

Abdulkader Puranwala

3

Rahul Jeewani

2

Neelam Punjabi

1

Jason D'Souza

Ladies and gentlemen, good day, and welcome to J.B. Pharma Q1 FY'23 Earnings Conf erence Call as on 5 August, 2022. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity f or you to ask questions af ter the presentation concludes. Should you need assistance during the conf erence call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone phone. Please note that this conf erence is being recorded. I now hand the conf erence over to Mr. Jason D'Souza, Vice President at J.B. Pharma. Thank you, and over to you, sir. Thank you. Thank you, Stephen. Welcome to the earnings call of J.B. Pharma. We have with us today the management of J.B. Pharma, Mr. Nikhil Chopra, CEO and Whole Time Director; and Mr. Lakshay Kataria, Chief Financial Of f icer. Mr. Kunal Khanna has taken ill today, and as a result, is not able to attend this call. Bef ore we begin, I would like to state that some of the statements in today's discussion may be f o

Nikhil Chopra

Thanks. Thank you, Jason, and good af ternoon, and a warm welcome to everyone joining us today f or the discussion on the operating and the f inancial perf ormance f or J.B. Pharmaceutical during Q1 FY'23. I shall commence with a review of our f irst quarter perf ormance and share some thoughts on our business. Later on, our CFO, Mr. Lakshay Kataria, will continue with the f inancial highlights. Af ter our remarks, we would be glad to engage with all of you over a discussion. Gentlemen, we are all on the call, we are pleased to report a healthy growth in top line underlined by strong sustained trends in the domestic business and complemented by robust improvement in our international business. It is heartening that we have been able to deliver this perf ormance despite the challenging operating environment. During Q1 FY'23, revenues on a reported basis increased by 30% year-on- year to INR 785 crore. Domestic f ormulations delivered good growth and crossed a revenue INR 400 crore in a

Lakshay Kataria

The gross margins, as you all know, have taken the impact of inf lationary pressure in terms of input costs, packing material costs, which have been managed through a slew of cost management and pricing initiatives. The good news is that we've seen sof tening in certain packing materials like aluminums and also on the international f reight costs. But given the continued volatility that we see on the geopolitical and the economic f ront globally, we continue to monitor the situation, particularly f or the f uel supplies and API prices. Overall, we hope to sustain the gross margin closer to 64% f or the f iscal with the March improvement coming through in Azmarda margins on the expiry of LOE. Given the high inf lation prevailing across the world, we've been trying to maintain our operating margins in the range of 24% to 26%, and this quarter's operating margin was in line with our guidance. On the EBITDA f ront, the Q1 FY'23 operating EBITDA was at INR 190 crore, including an adjustment

Nikhil Chopra

Yes, Rahul. This is Nikhil Chopra. So overall, we saw the demand coming across all the markets outside India because the CDMO business, what we do is outside India. And this was overall more happened because of the cough and cold, which where our major dominant portf olio is. Equally, if you look at in quarter 4 last year, we could see the surge happening, which has continued in quarter 1. And as I see, because this all businesses, we do with all the multi-national partners and f or them, quarter 3 of ours is the last quarter f or them. So the way we are seeing trajectory this year that the orders f or our CDMO business are more f ront-loaded, that is what we see and that is what I commented that we have a robust order book f or at least next 3 to 4 months. And overall, as the year-end comes and Christmas comes in, there we see overall demand overall being tepid, and they keep enough stocks to cater the market. Our guidance f or overall year f or CDMO business, the way trajectory we ar

Rahul Jeewani

So you are saying that FY'23, the CDMO business contribution to f ull year revenues will be around 13%, 14%?

Nikhil Chopra

And sir, second question on the India business. You spoke about the organic growth f or our India portf olio being mid -teens. But if you can also comment quantitatively on how Sanzyme and Azmarda have grown during the quarter because on Sanzyme, you have been trying to implement this prescriber overlap as well as geographical synergies, which you see between your and Sanzyme portf olio. So anything which you could highlight on the growth trends f or both Sanzyme and Azmarda? So overall, both the assets, Rahul, which is a combination of Sanzyme, let me start with Sanzyme, we are seeing a monthly render of around INR 12 crore to INR 13 crore. And this is showing growth of mid to high teens, that is what I can say at this moment of time. And the overall plan that we have put in place with 3 benef its that we enjoyed , J.B. as compared to Sanzyme as an entity was more f rom a prescriber base, more f rom a geographical f ootprint and equally lif e cycle management. So we have started seein