Granules India Limited · NSE:GRANULES
Granules India — Q3 FY2021 Earnings Presentation
32 slides from Granules India's earnings presentation, Jan 28, 2021
Slide 1: Exchange filing cover letter
Gg GRANULES REGISTERED OFFICE GRANULES INDIA LTD., 2nd Floor, 3rd Block, My Home Hub, Madhapur, Hyderabad - 500 081, Telangana, INDIA. Tel: +91 40 30660000, Fax: +91 40 23115145, mail@granulesindia.com, www.granulesindia.com CIN: L24110TG1991PLC012471 Dated January 28, 2021 To, National Stock Exchan
Slide 2: Granules India Limited Investor Presentation
Granules India Limited Investor Presentation December 2020
Slide 3: Safe harbor
Safe harbor The Presentation is to provide the general background information about the Company’s activities as at the date of the Presentation. The information contained herein is for general information purposes only and based on estimates and should not be considered as a recommendation that any
Slide 4: Table of Contents
Table of Contents 2 5 5-year Company Financial 1 Overview 4 Highlights 7 Q3FY21 Key Focus Sustainability Highlights Areas in FY21 3 6 Growth Drivers, Leadership Market Team Opportunities
Slide 5: Quarter at a Glance
Quarter at a Glance Revenue up 20% YoY, EBITDA margin expanded 190 bps YoY, followed by PAT growth of 129% YoY in Q3FY21 on back of new launches and better utilization of Metformin block YoY ROE and ROCE improved to 29% and 32.4%, respectively Four new launches such as Ramelteon, Dexmethylphenidate
Slide 6: Q3FY21 vs. Q3FY20: Consolidated Financial Highlights
Q3FY21 vs. Q3FY20: Consolidated Financial Highlights 1 (₹ Mn) Revenues Gross Profit and Gross Profit Margins EBITDA and EBITDA Margins Revenue from operations in Q3FY21 grew by 20% YoY, driven by four new 8,445 4,535 launches this quarter and an increase in 7,040 2,116 market share of existing produ
Slide 7: Geographical Mix
Increasing contribution from higher-margin FDs, generics, while remaining backward integrated in APIs (₹ Mn) Strong growth momentum witnessed across geographies Finish Dosage and PFI segments grew 11% & 48% YoY 8,445 Segment Revenue Geographical Mix 7,040 8,445 7,040 4,221 4,359 3,794 3,726 1,572 1,
Slide 8: 5-Quarter Consolidated Revenues, PAT
5-Quarter Consolidated Revenues, PAT 1 (₹ Mn) Revenues 8,581 8,445 7,040 7,356 5,999 Revenue declined 1.6% QoQ due to MEIS benefits withdrawal Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 PAT PAT declined 10% QoQ due to higher material cost and one-time product 1,636 loss taken during the quarter. (Further 1,
Slide 9: Q3FY21 vs. Q2FY21 Gross Margin Analysis
Q3FY21 vs. Q2FY21 Gross Margin Analysis Gross Profit and Gross Profit Margins Q3FY21 Gross Margin adjusted for these items nearly the same as that of Q2FY21 4,970 4,380 4,535 3,569 Particulars Q3FY21 Q2FY21 QoQ 3,208 59.5% Reported Gross Margin 4,535 4,970 57.9% 53.7% Reported Gross Margin % 53.7% 5
Slide 10: Q3FY21 vs. Q2FY21: EBITDA and EBITDA Margin Analysis
Q3FY21 vs. Q2FY21: EBITDA and EBITDA Margin Analysis Q3FY21 EBITDA margin adjusted for these items is in same range as Q2FY21 (₹ Mn) 2,564 Particulars Q3FY21 Q2FY21 QoQ 2,116 Reported EBITDA 2,116 2,564 1,836 Reported EBITDA Margin % 25.1% 29.9% -4.8% 1,632 Adjustment 23.2% 999 25.1% Less : Metformi
Slide 11: Continuous Improvement In Financial Metrics
Continuous Improvement In Financial Metrics (₹ Mn) Net Debt & Net debt-to-EBITDA (x) ROE (%) Free Cash Flow 7,888 29.0% 1,099 24.4% 29.3% 1.4x 6,133 6,121 6,058 5,998 19.8% 590 1.2x 522 373 19.9% 214 0.8x 0.7x 0.7x Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q3FY20 Q4FY20 Q
Slide 12: Business Structure
Business Structure 2 All are 100% Granules India Ltd Wholly-owned (GIL) Subsidiaries Granules Granules Granules USA Granules Europe Pharmaceuticals Lifescience Pvt. (GUSA) Ltd (GEL) Inc (GPI) Ltd Granules Consumer Health (GCH) • GIL: Presence across the entire pharmaceutical manufacturing value chai
Slide 13: Multiple Drivers Provide Visibility For Long-Term Growth
Multiple Drivers Provide Visibility For Long-Term Growth 3 Core US New Business Generics Products ✓ Focus on volume-based products such as ✓ Fully-integrated infrastructure including ✓ Filing new ANDAs (7-8 ANDAs and 2-4 Paracetamol, Metformin HCl, Ibuprofen (core). R&D, manufacturing and marketing
Slide 14: Core Business
Core Business Overview Growth Drivers ✓ Presence across the entire pharmaceutical 1 Expanded to 8 molecules: Losartan, Fexofenadine and Cetrizine added to the existing core portfolio manufacturing value chain from API to finished dosages ✓ Large-scale manufacturing enables not only to sustain compet
Slide 15: Expanding the Core business to Non US markets
Expanding the Core business to Non US markets FY20 FY21 FY23 ROW ROW ROW 21% 16% 17% LATAM USA LATAM LATAM USA 8% 51% 11% USA 12% 43% 50% Europe Europe Europe 23% 28% 20% Note: *Core molecules includes paracetamol, Ibuprofen, Metformin. Core molecules will keep increasing in absolute terms on an acc
Slide 16: US Generics: Granules USA (GUSA)
US Generics: Granules USA (GUSA) • B2B: Marketing & Distribution arm for APIs, PFIs and FDs (Rx & OTC) from GIL with a top-line of $48 Mn in FY20 • B2C: Granules Consumer Health; our front-end division for private label OTC products • Incorporated in 2003 to set up a sales and marketing arm for real
Slide 17: US Generics: Opportunity by market size and dosage form in FDs
US Generics: Opportunity by market size and dosage form in FDs By OTC and Rx FY23 FY20 FY21 +17 +23 OTC New products added New products added 15% OTC Rx 29% 36% No of No of Rx No of products: products: 33 71% products: 56 OTC 16 64% Rx 85% $1,472 Mn $ 4,089 Mn $10,747 Mn FY21 FY23 By Dosage Form FY2
Slide 18: US Generics: Opportunity from Core and Non-core products expansion
US Generics: Opportunity from Core and Non-core products expansion By Core and Non-Core FY20 FY21 FY23 *Core *Core Products Products 25% 24% Non-core *Core #No of products #No of Products #No of products: 56 51% products: 49% products: 16 Non-core 33 Non-core Products Products 75% 76% $1,472 Mn $ 4,
Slide 19: Multi APIs/Oncology
Multi APIs/Oncology ✓ Two Multi-product and multi-stage API-to-FD 1 Multi-product API manufacturing facility and also, an integrated API-to-FD facility for oncology manufacturing facilities in Vizag ✓ Unit IV: Directly relates to our core business with ~15 APIs, fully commercialized 2 Infrastructure
Slide 20: Global Opportunity by market size: Unit 4-5 Multi-API/Oncology
Global Opportunity by market size: Unit 4-5 Multi-API/Oncology FY20 FY21 FY23 +7 +13 Vertically Vertically Intergrated Intergarted Vertically APIs APIs Intergrated 24% 21% APIs New APIs 42% No of APIs: No of APIs: 58% No of APIs: 08 15 28 New APIs New APIs 76% 79% $20,217 Mn $26,288 Mn $48,257 Mn 28
Slide 21: New capacity expansion: MUPS technology
New capacity expansion: MUPS technology What is MUPS technology? • Tablets, Capsules and other dosage forms which are prepared by compaction, encapsulation or blending of modified release coated pellets are based on MUPS (multi-unit pellet system) technology. • Pellets are produced for the purpose o
Slide 22: Evolving business strategy for R&D
Evolving business strategy for R&D Core Business Emerging Business GPI High Volume and Low Value Medium Volume and Medium Low Volume and High Value products Value products Products • First line of treatment • New Products filling through • Focus on R&D R&D at GIL • Less R&D and more • Controlled Sub
Slide 23: Key focus areas for FY21
Key focus areas for FY21 Key focus areas for FY21 4 To ensure timely launches of 9 products expected To focus on Working capital management with 1 in FY21 while also increasing the market share of existing products by passing on cost benefits realized through operational efficiencies 4 high focus on
Slide 24: Building on solid base: 5-years trajectory
Building on solid base; unlocking value underway: 5-years trajectory 4 4-year CAGR 19% (₹ Mn) Gross Profit and Gross Profit Margins 25,986 52.6% 50.7% 22,792 44.9% 47.0% Revenue 16,918 10,236 14,353 13,175 13,829 47.6% 7,955 7,556 6,579 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 4-year CAGR 1
Slide 25: Increasing share from FDs while remaining backward integrated in APIs
Increasing share from FDs while remaining backward integrated in APIs: 5 years trajectory (₹ Mn) Higher revenue contribution coming from regulated market, which contributed 73% to total revenue 13,829 16,918 25,986 14,353 22,792 13,879 6,612 6,010 5,055 11,113 5,393 4,573 4,029 4,083 3,795 3,550 3,3
Slide 26: Improving returns; focus on FCF generation
Improving returns; focus on FCF generation: 4 years trajectory (₹ Mn) Net Debt & Net debt-to-EBITDA (x) Cash-to-Cash cycle (days) Free Cash Flow (FCF) 8,704 9,082 135 125 114 109 3.1x 2,645 6,138 6,058 2.4x 2.1x 1.2x Mar'17 Mar'18 Mar'19 Mar'20 -382 -1,602 Mar'17 Mar'18 Mar'19 Mar'20 Mar'17 Mar'18 M
Slide 27: Strong regulatory compliance history
Strong regulatory compliance history Value chain Facility location Installed capacity Approvals Inspection Date Outcome Bonthapally 34,560 TPA U.S. FDA, EDQM, WHO, COFEPRIS, INFARMED July-19 Clear API Jeedimetla 4,800 TPA U.S. FDA, EDQM, COFEPRIS, WHO, CDCSO March-18 Clear Vizag (Unit IV) 290 KL U.S
Slide 28: Leadership team
Leadership team 6 C Krishna Prasad Mr Prasad’s journey as pharma entrepreneur began in 1984, when he set up a paracetamol API manufacturing facility that focused on capital and process efficiency. Pharmaceutical formulations intermediates (PFIs) as a cost efficient product for Chairman and Managing
Slide 29: ESG Philosophy and Focus @ Granules
ESG Philosophy and Focus @ Granules 7 The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 (NVGs) formulated the National Guidelines on Responsible Business Conduct (NGRBC). Granules has based its sustainability policy on the 9 Principles as ment
Slide 30: Corporate Governance Philosophy and Focus @ Granules
Corporate Governance Philosophy and Focus @ Granules Sustainable growth strategy to ensure complete justice to financial, social, and environmental aspects Transparency which leads to sustainable growth Integrity in dealing with internal and external stakeholders Being accountable for what we do and
Slide 31: Glossary
Glossary API: Active Pharmaceutical Ingredient PFI: Pharmaceuticals Formulation Intermediates FD: Finished Dosage OTC: Over the counter drugs Rx: Prescription drugs IR: Immediate Release ER: Extended Release CII: Control substances PFOS: Powder for oral suspensions and solutions MUPS: Multi-unit pel
Slide 32: Thank you
Thank you Granules India Ltd Granules India IR Richa Singh Floor 2 Block 3 My Home Hub Krishna Raghunathan Consulting Madhapur Hyderabad 500081 Granules India Ltd Ernst & Young Investor Relations Practice CIN: L24110TG1991PLC012471 VP Finance and Investor Relations Voice: +91 9167772135 Voice: +91 4