Any current/future new fundraising through debt or equity?

No additional borrowing is planned currently as the company is managing increased working capital requirements through its own internal resources. The company has around Rs. 43 crores of short-term loans outstanding, which they intend to repay as they mature. There is no mention of any immediate plans for equity fundraising. The company is exploring inorganic expansion through acquisition of a second manufacturing unit but is focused on finding the right candidate before any commitment. Planned capital expenditure includes about Rs. 4 crores this year to increase manufacturing capacity from 12

Any current/future capex/capital investment/strategic investment?

Anuh Pharma plans to undertake a capex of approximately Rs. 4 crore in the current year to increase manufacturing capacity from 1200 metric tons to 1500 metric tons per year. The company is actively seeking a second manufacturing unit for inorganic growth to diversify and reduce dependency on the current Boisar site. Investment strategy includes utilizing surplus funds, including cash and liquid assets (approximately Rs. 86 crore), for such expansion when the right acquisition candidate is found. The company prefers to wait for a suitable strategic acquisition opportunity rather than rushing i

Future growth expectations in sales/revenue/volumes?

The company targets a top-line growth of around 30% for the current financial year, aiming for approximately ₹485-500 crore in sales revenue. Domestic and export sales are expected to be nearly balanced, with domestic sales around ₹240 crore and exports about ₹250 crore. Export demand is currently stronger due to reopening of countries post-COVID. Volume-wise, capacity utilization is about 65% of 1200 metric tons, with ongoing expansion to increase capacity to 1500 metric tons. Additional capex of ₹4 crore is planned to support capacity increase. The company is developing local sourcing for in

Future growth expectations in earnings/operating earnings/profits/EPS?

Anuh Pharma expects top-line growth of around 30%, targeting approximately Rs. 480-500 crores for the current financial year (April 2021 - March 2022). Domestic sales are anticipated around Rs. 240 crores, with exports around Rs. 250 crores, with export demand being stronger due to post-COVID country openings. Bottom-line improvement is a priority over top-line numbers, with significant profit growth observed in recent quarters. EBITDA margin is expected to improve from the previous year's 12.76%. The company is focusing on selling higher margin "profit builder" products rather than just volum

Current/ Expected Orderbook/ Pending Orders?

As of 1st October 2021 (current quarter), the pending order status is reported as good. Sales of key products like Gliclazide, Ambroxol, Erythromycin, and Sulfadoxine were very good last quarter. The management expressed confidence in achieving target top line and bottom line for the financial year April 2021 to March 2022. They are facing some delays and shortages in procurement of certain intermediates from China but are developing alternative local sourcing, expected to complete in two months. Export market demand is strong in upcoming quarters, supporting optimistic order book outlook. Dom

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Anuh Pharma LtdQ3 FY21Pharmaceuticals & Biotechnology

Anuh Pharma Ltd Q3 FY21 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹78.2P/E: 18.8Market Cap: ₹788 CrSector: Pharmaceuticals & Biotechnology

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company targets a top-line growth of around 30% for the current financial year, aiming for approximately ₹485-500 crore in sales revenue.
→Domestic and export sales are expected to be nearly balanced, with domestic sales around ₹240 crore and exports about ₹250 crore.
→Export demand is currently stronger due to reopening of countries post-COVID.
→Volume-wise, capacity utilization is about 65% of 1200 metric tons, with ongoing expansion to increase capacity to 1500 metric tons.
→Additional capex of ₹4 crore is planned to support capacity increase.
→The company is developing local sourcing for intermediates to ensure steady supply and reduce dependence on China.
→They are also exploring inorganic growth through acquisition of a second manufacturing unit.
→Two to three new products are planned to be introduced before the end of the year.
→Focus remains on bottom-line profitability along with revenue growth.

Margin guidance

Category 3

→Anuh Pharma expects top-line growth of around 30%, targeting approximately Rs. 480-500 crores for the current financial year (April 2021 - March 2022).
→Domestic sales are anticipated around Rs. 240 crores, with exports around Rs. 250 crores, with export demand being stronger due to post-COVID country openings.
→Bottom-line improvement is a priority over top-line numbers, with significant profit growth observed in recent quarters.
→EBITDA margin is expected to improve from the previous year's 12.76%.
→The company is focusing on selling higher margin "profit builder" products rather than just volume.
→Temporary raw material cost pressures due to China and supply challenges are being addressed by developing local sourcing alternatives.
→Capex of Rs. 4 crore underway to increase manufacturing capacity from 1200 to 1500 metric tons, and plans for inorganic expansion are in place.
→Overall, the outlook is cautiously optimistic with expected better quarters ahead.

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Fundraise plans

→No additional borrowing is planned currently as the company is managing increased working capital requirements through its own internal resources.
→The company has around Rs. 43 crores of short-term loans outstanding, which they intend to repay as they mature.
→There is no mention of any immediate plans for equity fundraising.
→The company is exploring inorganic expansion through acquisition of a second manufacturing unit but is focused on finding the right candidate before any commitment.
→Planned capital expenditure includes about Rs. 4 crores this year to increase manufacturing capacity from 1200 to 1500 metric tons, funded from internal accruals.
→Overall, Anuh Pharma is a cash-surplus company and aims to deploy surplus funds either via organic capex or potential acquisition, with no current debt or equity fundraising announced.

Order book

Yes

→As of 1st October 2021 (current quarter), the pending order status is reported as good.
→Sales of key products like Gliclazide, Ambroxol, Erythromycin, and Sulfadoxine were very good last quarter.
→The management expressed confidence in achieving target top line and bottom line for the financial year April 2021 to March 2022.
→They are facing some delays and shortages in procurement of certain intermediates from China but are developing alternative local sourcing, expected to complete in two months.
→Export market demand is strong in upcoming quarters, supporting optimistic order book outlook.
→Domestic market faces price pressures due to DPCO regulations, impacting formulation companies.
→Overall, the order book appears steady with good visibility especially on export orders.

Capex plans

Yes

→Anuh Pharma plans to undertake a capex of approximately Rs. 4 crore in the current year to increase manufacturing capacity from 1200 metric tons to 1500 metric tons per year.
→The company is actively seeking a second manufacturing unit for inorganic growth to diversify and reduce dependency on the current Boisar site.
→Investment strategy includes utilizing surplus funds, including cash and liquid assets (approximately Rs. 86 crore), for such expansion when the right acquisition candidate is found.
→The company prefers to wait for a suitable strategic acquisition opportunity rather than rushing into inorganic expansion, likening the search to "finding the right bride."
→The last major expansion was commissioned in December 2019, involving about Rs. 70 crore of capex funded internally.
→Additional capex investments are expected to be somewhat lower than depreciation, keeping fixed assets stable or declining marginally.

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