Alembic Pharmaceuticals Limited · NSE:APLLTD
Alembic Pharmaceuticals — Q2FY22 Earnings Presentation
15 slides from Alembic Pharmaceuticals's earnings presentation, Nov 11, 2021
Slide 1: Alembic Pharmaceuticals: Bottom of earnings + Reasonable Valuations
BUY TP INR 1200 Company Update Upside 51% ALEMBIC PHARMACEUTICALS LTD Bottom of earnings + Reasonable Valuations Vinit Gala, CFA Analyst November 11th, 2021 Vinit.gala@mnclgroup.com In the interest of timeliness, this document is not edited
Slide 2: Investment Thesis
INVESTMENT THESIS Alembic Pharmaceuticals Ltd (‘ALPM’) reported in-line numbers for Q2FY22 on the back of strong momentum in domestic business BBG code ALPM IN and better gross margins (~74% vs ~71% in Q1FY22). US business continued to remain under pressure on the back of pricing pressure in the bas
Slide 3: US Business Outlook
US BUSINESS OUTLOOK Theophylline market share loss playing out. F3 re-inspection surprising given the recent EIR ¡ Given that Glenmark launched the product in June, Q2FY22 saw full impact of the ¡ General injectable plant has already been audited by the USFDA on Feb-2021, deemed competition for Theo
Slide 4: Cost Rationalization
COST RATIONALIZATION Cost rationalisation initiatives to support EBITDA margins 33% Other Expenses (INR mn) and % to Sales 32% 6,500 31% 30% 31% 35% 30% 29% 30% ¡ ALPM spelled out its cost rationalization initiatives as a it changed its US business 5,500 30% strategy to focus more on volumes and to
Slide 5: Quarterly Performance
QUARTERLY PERFORMANCE Y/E March (Rs. mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Net Sales 9,489 12,409 12,091 12,068 13,413 14,570 13,143 12,804 13,260 12,923 Raw Materials 2,044 2,726 2,985 2,639 3,378 3,120 2,930 3,145 3,851 3,273 Employee Costs 2,149 2,178 2,269 2,4
Slide 6: Quarterly Performance
QUARTERLY PERFORMANCE Y/E March (Rs. mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 US 3,450 5,390 5,150 5,770 5,960 5,820 5,120 4,750 3,690 3,489 ROW 1,080 1,070 1,490 1,320 1,750 1,970 1,710 2,330 1,970 1,938 International Business 4,530 6,460 6,640 7,090 7,710 7,790 6,8
Slide 7: Quarterly Performance
QUARTERLY PERFORMANCE EBITDA & PAT Margin trends (%) Profit after tax trends (INR mn) 3,500 22% 22% 22% 25% 0.6 22% 22% 3,000 19% 20% 22% 3,253 19% 18% 19% 20% 0.5 2,500 2,927 2,856 13% 0.4 14% 13% 2,429 12% 13% 15% 28% 30% 30% 28% 12% 2,000 27% 27% 27% 24% 0.3 19% 20% 1,500 18% 1,645 10% 1,639 0.2
Slide 8: Quarterly Performance
QUARTERLY PERFORMANCE 70% Domestic Business Growth (INR in Mn) 3,000 API Business Growth (INR in Mn) 80% 36% 34% 70% 6,000 40% 2,500 2,790 2,640 60% 2,630 5,000 30% 2,455 50% 2,000 30% 40% 5,040 2,140 2,140 4,000 4,810 20% Rs. mn 30% 4,150 4,180 1,500 20% Rs. mn 3,000 3,580 5% 10% 1% 0% 0% 10% 3,060
Slide 9: Key Takeaways
KEY TAKEAWAYS US Business API & RoW Business ¡ F3 (New Injectable) plant: USFDA re-inspection was triggered by 2 additional ¡ API business de-grew on account of large Azithromycin base in Q2FY21; Ex approvals. Form 483 was issued with 10 observations. Azithromycin growth encouraging ¡ Theophylline c
Slide 10: Valuations
VALUATIONS Valuation as per DCF What's in the price? ¡ ALPM has corrected significantly on the back of US business underperformance and thus is Total Enterprise value as per DCF 2,02,130 now trading at ~18x PE(x) FY22E Less: Net debt (FY22E) -4,744 ¡ Pain point being the US generics business where t
Slide 11: Ukoniq: Valuations
UKONIQ: VALUATIONS Particulars FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 Est Peak Market Potential for MZL & FL 400 400 400 400 400 400 400 400 400 400 400 400 Penetration in MZL + FL 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 100% 100% Sales (USD mn) 40 80 120 160 200 240 280 320 36
Slide 12: Key Surprises & Risks
KEY SURPRISES & RISKS Key Surprises ¡ Further monetisation by Rhizen: We expect Rhizen to further monetise Tenalisib in other geographies, which will trigger higher dividend payments for ALPM from Rhizen. ¡ Early commercialisation of Injectable facility: F3 (New Injectable) plant remains key for the
Slide 13: Financials
FINANCIALS Y/E March (Rs mn) FY19 FY20 FY21 FY22E FY23E Y/E March (Rs mn) FY19 FY20 FY21 FY22E FY23E Net Sales 39,347 46,058 53,931 53,871 66,140 SOURCES OF FUNDS % growth 26% 17% 17% 0% 23% Capital 377 377 393 393 393 Raw Materials 9,927 10,394 12,572 14,545 17,196 Reserves & Surplus 26,811 31,820
Slide 14: Financials
FINANCIALS Y/E March FY19 FY20 FY21E FY22E FY23E Y/E March (Rs mn) FY19 FY20 FY21E FY22E FY23E Growth ratios (%) Pre-tax profit 7,493 10,435 13,682 10,743 15,510 Net sales 25.7 17.1 17.1 (0.9) 22.9 EBITDA 39.1 42.9 27.4 (20.1) 38.1 Net chg in working capital (727) (6,691) 2,329 (2,398) (3,808) Adjus
Slide 15: Thank You!
Thank You! Disclaimer: Monarch Networth Capital Limited (hereinafter MNCL), a publically listed company, is engaged in services of retail broking, credits, portfolio management and marketing investment products including mutual funds, life & general insurance and as such prepares and shares research
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