Aarti Drugs Limited · NSE:AARTIDRUGS
Aarti Drugs — Q4 FY2022 Earnings Presentation
49 slides from Aarti Drugs's earnings presentation, May 9, 2022
Slide 1: Cover letter to stock exchanges
Corporate Office : Mahendra Industrial Estate, Ground Floor, Plot No. 109-D, Road No. 29, Sion (East), Mumbai - 400 022. (India) Tel .: 022-2407 2249 / 2401 9025 (30 Lines) e e e Fax.: 022-2407 3462/ 2407 0144 Aarti Drugs Limited Email: admin@aartidrugs.com website: www.aartidrugs.com Manufacturers
Slide 2: Aarti Drugs Limited Q4FY22 Investor Presentation
AARTI DRUGS LIMITED Q4FY22 Investor Presentation
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aarti Drugs Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securiti
Slide 4: Table of Contents
Table of Contents • Company Overview ………………………………………………………………………….04-19 • Industry Overview ……………………………………………………………………………20-24 • Aarti 2.0: Sustainable Growth & Long-term Value Creation ……………..25-34 • Financial Highlights ……………………………………………………………………….…35-39 • Historical Performance at a Glance ………………
Slide 5: Company Overview
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Slide 6: Vision & Mission
Vision & Mission Vision Mission We shall become the first-choice vendor of Bulk Drugs and achieve a leadership position by: • Seek global market leadership • Assuring consistent quality and timely delivery at competitive price • Focus on growth and development of the product • Providing customized s
Slide 7: Management team
Management team Experienced management with deep understanding of pharmaceutical sector Mr. Prakash M. Patil Mr. Rashesh C. Gogri Mr. Harshit M. Savla Mr. Harit P. Shah Mr. Adhish P. Patil Chairman, MD & CEO Managing Director Joint Managing Director Whole Time Director Chief Financial Officer Shri P
Slide 8: Key Milestones
Key Milestones 2022 Consolidated Revenue Rs. 2,500 Cr 2017 Pinnacle Life Science Pvt. Ltd. crossed Rs. 100 crores turnover 2020 Crossed Rs. 2,000 Cr 2003 Consolidated Turnover & Rs. 1996 Listed On National Stock 200 Cr Formulations Turnover Amalgamation of Rupal Chemical Exchange of India Limited In
Slide 9: Key Facts & Figures
Key Facts & Figures Largest producer of Nimesulide in the world. 12 3,993 Manufacturing MT/Monthly Facilities Capacity Largest producer of Metronidazole in Largest producer of India Ketoconazole in the world 80+ 1,10,330 Finished Products Sq.m Plant Area Leadership in API One of the leading Manufact
Slide 10: Diversified presence across segments
Diversified presence across segments Presence Across API, Formulation, Specialty Chemicals, Intermediates Segments Active Pharmaceuticals Ingredients Formulation Specialty Chemicals, (API) Intermediates & Others ▪ Leading API producer of 50+ molecules for anti- ▪ Diversified into formulation through
Slide 11: Revenue Break-up
Revenue Break-up Segmental Revenue Therapeutic-wise Revenue 4% 4% 10% 4% 9% 17% 43% 13% 82% 14% API Formulation Anti-biotic Anti-protozol Anti-inflammatory Speciality Chemicals Intermediates & Others Anti-diabetic Anti-fungal Others Focus on growing the contribution from lifestyle & chronic therapeu
Slide 12: State-of-the-art Integrated manufacturing facilities
State-of-the-art Integrated manufacturing facilities Baddi Pinnacle Plant Formulation Plant WHO-GMP Sarigam-1 WHO-GMP Sarigam-2 WHO-GMP/ COFEPRIS/CEP E-22 W-61 ▪ Australian Government – Department of Health and EUGMP & WHO-GMP Ageing - Therapeutic Goods Administration ▪ EUGMP / WHO-GMP / Japanese Ac
Slide 13: Manufacturing capabilities
Manufacturing capabilities Noble Metal Hydrogenation (Catalytic Reduction) Carboxylation at various pressures Reaction Capabilities Cyclocondensation Ammonolysis (Amidation) Grignard Reaction Nitration Methoxylation Condensation Dehalohydrogenation Aldol Condensation Reduction Halogenation (Cl, Br,
Slide 14: Strong R&D thrust on continuous innovation
Strong R&D thrust on continuous innovation R&D Center at Tarapur R&D Center at Turbhe, Mumbai ▪ Supports manufacturing facilities at Tarapur and Sarigam on ▪ Supports development of complex generics for in-house 01 API process development formulation business ▪ Pilot plant used for kilo scale manufa
Slide 15: Diversified geographic presence
Diversified geographic presence Presence in 100+ Countries across Top 10 Countries - Exports 6 Continents ensures Brazil Mexico diversification and risk minimization Pakistan Turkey Europe Indonesia UAE 12% 12% Egypt Bangladesh FY21 FY22 Asia Switzerland Germany North America Market 58% 54% FY21 FY2
Slide 16: ESG Initiatives
ESG Initiatives Environmental Social Governance • Converted multiple facilities into to Zero • Woman Empowerment: Free Government • The Board has an optimum combination of Liquid Discharge (ZLD) approved and certified vocational course training Executive and Non-Executive directors and • Dual Fired
Slide 17: Our Esteemed Clientele across segments
Our Esteemed Clientele across segments 16
Slide 18: Awards & Accolades
Awards & Accolades 1991-92 2005-06 2012 2014 2015-2019 CHEMEXCIL AVAYA GLOBAL CONNECT CHEMEXCIL CHEMEXCIL ABBOTT Outstanding Customer Outstanding Appreciation as Business partner of the Performance in Export Responsiveness Performance in Latin business partner year American Export 2001 2009 2013 201
Slide 19: Corporate Social Responsibility
Corporate Social Responsibility Donation of Inverter, Water filters, Air coolers Steel cupboards, Table chair sets, Washing Machines, Wooden Medicine Racks, Examination Stools to Coconut Tree Plantation various villages 18
Slide 20: Industry Overview
19 Industry Overview
Slide 21: Indian Pharmaceutical Industry
Indian Pharmaceutical Industry 50% 20% #1 Highest FDA Global Vaccine Of Global approvals generic Supply 25% demand 30% outside USA Of Annual Of medicine UNICEF Active Pharmaceutical Ingredient (API) Market 40% demand in UK 60% demand US$55 ▪ India is the third largest active pharmaceutical ingredien
Slide 22: Indian Pharmaceutical Industry – Key Segments
Indian Pharmaceutical Industry – Key Segments Experienced management with deep understanding of pharmaceutical sector Active Pharmaceutical Ingredients (APIs) CRAMS • Domestic API consumption is expected to reach US$ 18.8 billion by FY22 • Fragmented market with more than 1,000 players • In Apr’19,
Slide 23: Multiple Triggers will lead to high Growth Momentum
Multiple Triggers will lead to high Growth Momentum ▪ Rising domestic population ▪ 100% FDI in the pharmaceutical sector under Robust ▪ Higher Insurance Coverage penetration automatic route Increased Domestic Investments Demand ▪ Increased government spending on hospitals and healthcare ▪ Artificial
Slide 24: Pharmaceutical Production Linked Incentive (PLI) Scheme
Pharmaceutical Production Linked Incentive (PLI) Scheme The scheme is aimed towards pushing domestic manufacturing of key starting materials (KSMs), drug intermediates and active pharmaceutical ingredients (APIs) to reduce import dependence on such input materials. How Sector Will Benefit How Aarti
Slide 25: Aarti 2.0: Sustainable Growth & Long-term Value Creation
Aarti 2.0: Sustainable Growth & Long-term Value Creation 6. Capex to drive the next leg of growth 1. High Entry Barriers : 5. Robust Presence in Balance Highly Sheet Specialized API Segment 2. Unique 4. Diversified Competitive product and 3. Poised to Position client mix overcome industry challenges
Slide 26: High Entry Barriers: Presence in Highly Specialized API Segment
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 ❑ Lower Competitive Intensity: Various small-scale manufacturers ❑ Stringent pharmaco
Slide 27: Unique Competitive Position
Unique Competitive Position Economies of Superior quality International scale presence Long-term relationship; repeat business from Client customers diversification Good purchasing 3+ decades of Less regional power experience dependence Known brand in Process improvement Phase-Wise Capex to API spac
Slide 28: Well poised to overcome industry challenges
Well poised to overcome industry challenges Specialised player in the highly challenging Pharmaceutical Industry Industry’s Unique Challenges Our Core Competencies High R&D costs Demonstrated manufacturing excellence for 3+ decades Long gestation period R&D focused, driven by continuous improvement
Slide 29: Diversified Product and Client mix
Diversified Product and Client mix Presence across Segments, Geographies, API Therapies & Customers to ensure Growth and Risk Minimization ▪ API business contributes ~80% of sales in FY22 ▪ Domestic - Export mix at 63%:37% for FY22 Segmental Geographic ▪ Presence across 100+ countries ▪ Focus on inc
Slide 30: Robust Balance Sheet
Robust Balance Sheet Strong cashflows led to robust Balance Sheet giving financial flexibility for Growth Strong net operating cashflow generation Low leverage provides Balance Sheet strength Rs. crores Mar-22 Net Operating Cashflow Net Debt to Equity Equity Net Debt Net Debt 538.1 251 1.20 1,100 1,
Slide 31: Capex to drive the next leg of growth
Capex to drive the next leg of growth Capex of Rs. 600 crores planned Capex plans Phase wise capex will lead to distributed investments Majority of the capex to be funded through internal accruals and minimal debt Brownfield expansion and debottlenecking of API facilities Brownfield expansion at Bad
Slide 32: Product-wise Capex Plans
Product-wise Capex Plans Anti Diabetic Anti - Fungal ▪ CEP approval in 2016 which opened up European markets ▪ Further consolidation of its worldwide leading position. ▪ Manufacturing over 1,000 TPM making it one of the largest metformin player ▪ Recently expanded the capacity, further extending the
Slide 33: Aarti 2.0: Sustainable Growth & Long-term Value Creation
Aarti 2.0: Sustainable Growth & Long-term Value Creation Growth Drivers Value Creation Drivers Expansion Capex Backward Prudent Capital Sustainable Integration Allocation Increased product Brownfield expansion offering to existing for existing products at Growth Backward integration for Planned cape
Slide 34: Product Pipeline
Product Pipeline As of 31-Mar-22 API Finished Dosages Product Under Development Product Under Development : New Product Under Development: LATAM & Age Molecules For regulated Markets Emerging Markets 1 3 1 1 3 1 4 1 5 1 1 1 1 1 1 1 Anti-Diabetic Anti Fungal Anti Diabetic Anti-Protozol Anti Hypertens
Slide 35: Financial Highlights
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Slide 36: Key Highlights
Key Highlights Rs. 697.2 Crores Rs. 89.0 Crores Rs. 55.3 Crores Consol. Revenue Consol. EBITDA Consol. PAT Result 9MQ4 Highlights Highlights ~ 82.3% ~9.6% Share of API Business Share of Formulation Business Highlights Rs. 2,499.9 Crores Rs. 340.8 Crores Rs. 205.0 Crores Highlights Consol. Revenue Co
Slide 37: Q4 FY22 and FY22 Result Highlights
Result Highlights Rs. crores Revenue EBITDA & EBITDA Margin (%) PAT & PAT Margin (%) 10.3% 8.0% Q4 FY22 Highlights 16.3% 12.8% +9% +7% +39% 697 89 52 55 82 503 Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 Revenue EBITDA & EBITDA Margin (%) PAT & PAT Margin (%) 20.5% 13.7% 13.0% 8.2% FY22 Highligh
Slide 38: Segmental Break-up
Segmental Break-up Rs. crores Quarterly Year Ended FY22 Q4FY22 11% 10% 4% 82% 4% 80% 5% 4% API Formulation API Formulation Speciality Chemicals Intermediates & Others Speciality Chemicals Intermediates & Others Q4FY21 FY21 12% 13% 5% 79% 4% 78% 5% 4% API Formulation API Formulation Speciality Chemic
Slide 39: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (Rs. Crores) Q4FY22 Q4FY21 YoY% FY22 FY21 YoY% Net Revenue from Operations 694.3 501.8 38% 2,488.6 2,154.8 15% Other Income 2.9 1.O 11.3 4.5 Total Revenue 697.2 502.8 2499.9 2,159.3 COGS 477.6 319.6 1688.8 1,321.0 Gross Profit 219.6 183.1 20% 811.1 83
Slide 40: Consolidated Balance Sheet
Consolidated Balance Sheet Equities & Liabilities (Rs. Crores) Mar-22 Mar-21 Assets (Rs. Crores) Mar-22 Mar-21 Equity Non Current assets Equity Share capital 92.6 93.2 Property, Plant and Equipment 685.7 659.2 Other Equity 943.8 820.2 Capital work in progress 76.7 19.3 Non Controlling Interest -0.1
Slide 41: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Particulars (Rs. crores) FY22 FY21 Net Profit before Tax and Extraordinary items 270.0 369.0 Adjustments for: Non Cash Items / Other Investment or Financial Items 70.4 68.6 Operating profit before working capital changes 340.4 437.6 Changes in working capital -187.4
Slide 42: Historical Performance At A Glance
41 Historical Performance At A Glance
Slide 43: Strong Financial Performance
Strong Financial Performance Consolidat ed Revenue (Rs. Crores) EBITDA (Rs. Crores) PAT (Rs. Crores) 2,500 442 280 2,159 341 205 1,808 1,563 263 1,245 210 141 200 82 90 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 EBITDA Margin (%) PAT Margin (%) 20.5% 13.0% 16.0% 14.6%
Slide 44: Strong Financial Performance
Strong Financial Performance Consolidated EPS* (in Rs.) Net Worth (in Rs. Crores) Leverage (X) 30.1 1,036 1.2 913 22.1 0.9 653 15.4 544 0.6 455 0.5 8.6 9.6 0.4 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 * For EPS, adjusted includes previous year’s figures in proportio
Slide 45: Distribution to Shareholders
Distribution to Shareholders (in Rs. Crs) Distribution Policy Distributed ~Rs. 67.9 Crores as Dividend over last 7 years Distribution: ~20% Considering various financial parameters, the Company Distributed ~ Rs. 203.8 crores may elect to distribute about in form of dividend & buyback 15% to 30% of o
Slide 46: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement Particulars (Rs. crores) FY22 FY21 FY20 FY19 FY18 Net Revenue from Operations 2,488.6 2,154.8 1,806.1 1,560.9 1,243.7 Other Income 11.3 4.5 1.5 2.4 1.1 COGS 1688.8 1321.0 1,178.9 1,059.9 782.7 Gross Profit 811.1 838.3 628.7 503.4 462.1 Gross Margin (%) 32
Slide 47: Consolidated Balance Sheet Statement
Consolidated Balance Sheet Statement Equities & Liabilities (Rs. crores) FY22 FY21 FY20 FY19 FY18 Assets (Rs. crores) FY22 FY21 FY20 FY19 FY18 Equity Non Current assets Equity Share capital 92.6 93.2 23.3 23.6 23.6 Property, Plant and Equipment 685.7 659.2 642.3 622.0 597.9 Other Equity 943.8 820.2
Slide 48: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Particulars (Rs. crores) FY22 FY21 FY20 FY19 FY18 Net Profit before Tax and Extraordinary items 270.0 369.0 185.3 131.0 124.5 Adjustments for: Non Cash Items / Other Investment or Financial 70.4 68.6 86.8 75.2 74.5 Items Operating profit before working capital change
Slide 49: For further information, please contact
For further information, please contact Company: Investor Relations Advisor: CIN: L37060MH1984PLC055433 CIN: U74140MH2010PTC204285 Mr. Rushikesh Deole Mr. Jigar Kavaiya / Mr. Chinmay Madgulkar Email: investorrelations@aartidrugs.com E: jigar.kavaiya@sgapl.net / chinmay.m@sgapl.net Contact no.: +91 2