management discussion & analysis for the fourth quarter ... · received gmp certificate for the...
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Management Discussion & Analysis for the Fourth Quarter FY19
Financials (Stand-alone) (` In Lakhs)
Particulars
Unaudited Audited
Quarter Ended For the Year Ended
Jan. 19 –
Mar. 19
Oct. 18 –
Dec. 18
Jan. 18 –
Mar. 18 Gw %
Apr. 18 –
Mar. 19
Apr. 17 –
Mar. 18 Gw %
Gross Sales (Net of Sales Returns):
Formulation :
- Domestic 14503 15252 15109 (4.0) 60619 59498 1.9
- Export
Regulated Market : 4698 4815 6475 (27.4) 16085 27564 (41.6)
Emerging Market : 2374 2036 2283 4.0 7265 7169 1.3
Export Total 7072 6851 8758 (19.3) 23350 34733 (32.8)
Formulation … ( A ) 21575 22103 23867 (9.6) 83969 94231 (10.9)
API :
- Domestic 965 803 636 51.7 3197 2432 31.5
- Export 1542 1420 911 69.3 5025 3655 37.5
API Total … ( B ) 2507 2223 1547 62.1 8222 6087 35.1
CRO & Analy. Services (C) 415 474 472 (12.1) 1946 1413 37.7
Gross Sales (A+B+C) 24497 24800 25886 (5.4) 94137 101731 (7.5)
Other Operating Income 705 1456 1077 (34.5) 2637 2427 8.7
Income from Operation 25202 26256 26963 (6.5) 96774 104158 (7.1)
EBIDTA 2855 2478 4942 - 7671 13486 -
Operating Profit 1758 1577 3854 - 3613 9713 -
Profit/(Loss) Before Tax 940 390 2580 - (924) 4843 -
Profit/(Loss) After Tax 1163 534 2050 - (284) 4120 -
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Financial Highlights
Net revenues for the quarter were at ` 245.0 crores, against ` 258.9 crores,
same quarter last year. For the year, the net revenues were at ` 941.4 crores,
as against ` 1017.3 crores last year.
During the quarter, material consumption was 33.1 % of the net sales,
compared to 33.8 % for the same quarter last year. Staff cost to net sales are
23.6 % compared to 19.6 %. Depreciation/Amortization are at ` 19.5 crores,
compared to ` 16.3 crores. Research & Development (R&D) expenses are at
5.4% compared to 5.3 % at ` 13.1 crores as against ` 13.8 crores for the same
quarter last year. Other expenses to net sales are 29.2 % at ` 71.5 crores,
compared to 26.3 % at ` 68.1 crores.
For the year, material consumption was 34.0 % of the net sales, compared to
34.3 % last Year. Staff cost to net sales are 24.6 % compared to 21.7 %.
Depreciation/Amortization are at ` 71.6 crores, compared to ` 67.7 crores.
Research & Development (R&D) expenses to net sales are 5.5 % at ` 51.5
crores, compared to 5.3 % at ` 53.5 crores. Other expenses to net sales are
30.6 % at ` 288.1 crores, compared to 27.9 % at ` 283.5 crores.
Earnings Before Interest, Depreciation, Tax and Amortization (EBIDTA) to net
sales for the quarter is 11.7 % at ` 28.5 crores, compared to 19.1 % at ` 49.4
crores, for the same quarter last year.
Earnings Before Interest, Depreciation, Tax and Amortization (EBIDTA) to net
sales for the year is 8.1 % at ` 76.7 crores, compared to 13.3 % at ` 134.9
crores last year.
Rating The Company’s working capital facilities are rated as [ICRA] A1 (Pronounced as ICRA A One) and long term borrowings are rated as [ICRA] A+ (Pronounced as ICRA A Plus) by ICRA.
[ICRA] A1 Instruments rating are considered to have very strong degree of
safety regarding timely payment of financial obligations. Such instruments
carry lowest credit risk.
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[ICRA] A Instruments rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk. The rating of [ICRA] A+ is one notch higher than [ICRA] A. Finished Dosages Indian Pharma Market (IPM) As per AWACS, Indoco ranks 30th in the IPM, with market share of 0.66 % as on
Mar’19. For the fourth quarter FY19, IPM growth is 9.9 %, whereas Indoco’s
growth is 12.5 %. The Company has shown good growth amongst 21-30 ranked
Corporates. For the year, Apr-Mar’19, IPM growth is at 9.6%, whereas Indoco’s
growth is at 8.2%.
As per SMSRC, Indoco ranks 23rd with prescription (Rx) share of 0.86 % as on
Feb’19 MAT basis.
Indoco’s Domestic Formulation Business:
The revenues from Domestic formulations business for the quarter is ` 145.0
crores, as against ` 151.1 crores for the same quarter last year.
For the year, the revenues are at ` 606.2 crores, as against ` 595.0 crores last
year.
Details of revenues from major therapies are as follows: (` In Lakhs)
THERAPY Q4FY19 Q4FY18 Gw %
Stomatological 2554 2406 6.2
Respiratory 2333 2848 (18.1)
Gastro Intestinal 2055 2144 (4.1)
Anti-Infective 2017 2360 (14.5)
Vitamin/Mineral/Nutrient 1388 1020 36.1
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Details of revenues from major brands are as follows: (` In Lakhs)
Brand Q4FY19 Q4FY18 Gw %
Cyclopam 1586 1718 (7.7)
Febrex Plus 1332 1563 (14.8)
Cital 889 872 2.0
Sensodent K 805 760 5.9
Methycal 755 433 74.5
ATM 718 807 (11.0)
Oxipod 678 780 (13.1)
Karvol Plus 511 507 0.8
Sensoform 446 445 0.4
Cloben G 414 455 (8.9)
New product introductions:
During the quarter, the Company launched 1 new product. For the year, the
total number of new product launches stands at 10 i.e., 2 in Acute, 5 in
Sub-Chronic and 3 in Chronic.
International Formulation Business
During the quarter, revenues from International formulations business were at
` 70.7 crores, as against ` 87.6 crores for the same quarter last year. For the
year, the net revenues were at ` 233.5 crores, as against ` 347.3 crores last
year.
USA
During the quarter, the revenues were at ` 11.3 crores, as against ` 5.9
crores for the same quarter last year. For the year, the net revenues were at
` 24.9 crores as against ` 40.5 crores last year.
Current Status of ANDAs:
9 approvals till date 37 filed, pending approval
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Europe
During the quarter, the revenues were at ` 27.8 crores, compared to ` 46.9
crores for the same quarter last year. For the year, the net revenues were at
` 106.5 crores as against ` 179.0 crores last year.
South Africa, Australia and New Zealand Business The revenues for the quarter were at ` 7.9 crores, compared to ` 11.9 crores for the same quarter last year. For the year, the net revenues were at ` 29.4 crores, as against ` 56.1 crores last year. Emerging Markets
The revenues for the quarter were at ` 23.7 crores, compared to ` 22.8 crores for the same quarter last year. For the year, the net revenues were at ` 72.6 crores as against ` 71.7 crores last year. Regulatory Status for major markets is given below,
Plant Dosage Form Inspecting Authority
Last Inspection Date
Current Status
Goa Plant I
Liquid Oral, Solid Oral,
Ointment & Capsule
USFDA 17.1.19 to 25.1.19
Company received 6 Observations (483s). Presently the Company is in communication with the Agency for submission of the compliance response. Status of Plant is OAI as per USFDA communication dated 13.3.19.
UK-MHRA 21.05.19 to 23.05.19
Inspection report awaited. Company awaits re-instatement of GMP Certificate.
SAHPRA, South Africa
18.05.19 to 25.05.19
Compliance response is under verification.
Ministry of Health Ukraine
Feb-19 Received GMP certificate from the Authority which will facilitate commencement of supplies to Ukraine
Goa Plant II & Goa Plant
III
Ophthalmic, Injectable &
Solid Oral USFDA
14.11.18 to 21.11.18
The facility was re-inspected. The inspection was successfully closed with change in Regulatory Status from OAI to VAI. EIR Report letter dated 21.03.19 confirming withdrawal of Warning Letter.
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UK-MHRA 17.9.18 to 21.9.18
Inspection concluded with No Critical Observations.
TGA - Australia
May-18 Company has received inspection closure notification on 13.5.19
SAHPRA, South Africa
18.05.19 to 25.05.19
Compliance response is under verification.
Baddi I
Solid Oral, Ointment,
Liquid Oral & Toothpaste
UK-MHRA 16.10.18 to 20.10.18
Inspection concluded with No Critical Observations. GMP Certification continues.
Baddi III Solid Oral &
Capsule UK-MHRA
16.10.18 to 20.10.18
Inspection concluded with No Critical Observations. Received GMP Certificate for the first time after acquisition from Microlabs.
Abbreviations: OAI - Official Action Indicated, VAI - Voluntary Action Indicated, EIR - Establishment Inspection Report, SAHPRA, South Africa - South African Health Products Regulatory Authority
Active Pharmaceutical Ingredients (APIs) The revenues from API business were at ` 25.1 crores, compared to ` 15.5
crores for the same quarter last year. For the year, the net revenues were at
` 82.2 crores, as against ` 60.9 crores last year.
The Company has commissioned its new API facility at Patalganga in April 2019
and the commercial dispatches to domestic markets have already begun. The
Company has received the Certificate of Suitability (CEP) from European
Directorate of Quality of Medicine (EDQM) paving the way to commence
supplies to European Markets.
CRO & Analytical Services During the quarter, revenues from CRO and Analytical Services business were
at ` 4.1 crores, compared to ` 4.7 crores for the same quarter last year. For the
year, the net revenues were at ` 19.5 crores as against ` 14.1 crores last year.
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Future Outlook The Company’s Domestic business continues to focus on brand building, new product launches, thrust on sub-chronic (Speciality) segment and penetration in the North and East Region.
Going forward, the Company’s business from US is expected to grow as ANDAs
will be commercialized at regular intervals as USFDA’s warning letter has been
lifted. Reinstatement of the EU-GMP compliance certificate for Goa Plant-I and
the latest EU-GMP approval of newly acquired solid dosages manufacturing
facility at Baddi (Plant III) will also boost the EU business. Indoco is also
consolidating its position in the Emerging Markets through active brand
promotion. Robust pipeline in multiple dosage forms will enable the Company
to have an upper edge over its competitors in the international business.
Expertise in Research & Development, backward integration in API in select
products, own CRO set-up, excellence in finished dosages manufacturing and a
strong customer base makes the Company, a preferred partner, offering
complete solutions to generic companies worldwide.
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Safe Harbour
Statements made in this Management Discussion and Analysis (MDA) describing the
Company’s objective, projections, estimates and expectations may be ‘Forward-
looking statements’ within the meaning of applicable securities laws & regulations.
Actual results could differ from those expressed or implied due to risks, uncertainties
and inaccurate assumptions.