Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successful completion of validation for two manufacturing lines at the Indore facility, with commercial production set to commence in September.
- Continued leadership in the Critical Care division with significant advancements in antimicrobial stewardship initiatives.
- Formation of a dedicated user group for Dalbavancin, enhancing the effective utilization of this crucial antibiotic.
- Launch of innovative products like Dydro 20 MG and 30 MG sustainable tablets, improving patient compliance and treatment outcomes.
- Expansion into new international markets with new registrations in Lithuania and Sri Lanka, diversifying the company's global portfolio.
Negative Points
- Flat financial performance with minimal growth in revenue and profit margins compared to previous quarters.
- Delay in the commencement of commercial production at the Indore facility, impacting potential revenue generation.
- Challenges in managing backlog orders at the Navsari facility, leading to potential loss of business.
- High debt levels with a peak loan of around INR 300 crores, posing financial strain.
- Extended gestation period for new product approvals and market entries, delaying potential revenue from new markets.
Q & A Highlights
Highlights of Gufic Biosciences Ltd (BOM:509079, Financial) Q1 FY '25 Earnings Call
Q: Can you break up your sales between the various segments?
A: As per our strategic guideline, we are only in one segment, which is pharma. Around 50-55% is domestic sales, and 25-30% is international sales. API contributes around 5-7%. (Devkinandan Roonghta, CFO)
Q: Can you share some color on the launch of Fertimax?
A: Fertimax is a division focused on infertility. We launched three new products: Dydrogesterone 20, 30, Guficin Alpha for recurrent implantation failure, and a super purified HMG. The division was launched with a hybrid model of existing and new recruits. (Pranav Choksi, CEO)
Q: What is the revenue potential for Gufic once the Indore plant is fully operational?
A: Indore's capacity is 1.5 times that of Navsari. We expect to reach INR 1,500 crores in revenue within the next 4-5 years, with full capacity utilization by FY '27-'28. (Pranav Choksi, CEO)
Q: How are you managing the backlog in Navsari?
A: We are prioritizing orders with better margins and debtor days. Some domestic orders are being postponed to manage capacity constraints. (Pranav Choksi, CEO)
Q: What is the current debt level, and how do you plan to manage it?
A: Our term loan stands at INR 175 crores, and cash credit utilization is around INR 120 crores, totaling INR 295-300 crores. We plan to repay around INR 75-80 crores annually from FY '25-'26 onwards. (Devkinandan Roonghta, CFO)
Q: What are the steps involved in the validation of the Indore facility?
A: Media fill validation is the last step, followed by a 14-day stability test. We expect commercial production to start in September. (Pranav Choksi, CEO)
Q: How do you plan to expand into more export markets?
A: We aim to get EU approval by the end of the year, which will open up more markets. We will start filing dossiers from December, with approvals expected in 2025. (Pranav Choksi, CEO)
Q: What is the expected timeline for achieving full capacity at the Indore plant?
A: We expect to reach 30-35% capacity utilization in FY '25-'26, 60% in the following year, and full capacity by FY '27-'28. (Pranav Choksi, CEO)
Q: What is the impact of the new product launch on the market?
A: The new potassium channel inhibitor in the PPI market offers better tolerability and comparable efficacy. We aim to be early entrants in this category. (Pranav Choksi, CEO)
Q: How are you managing the financial discipline with the current backlog?
A: We are focusing on orders with better margins and debtor days, even if it means losing some business. This approach ensures long-term sustainability. (Pranav Choksi, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
