Any current/future new fundraising through debt or equity?

The company plans a greenfield expansion with a CAPEX of Rs. 150-200 crores over the next 2-3 years, mainly for diversification into new nutrition areas. Funding will be through a combination of internal accruals and some amount of debt. There is a possibility of reducing or avoiding external debt if real estate monetization works out. They are actively engaging with potential real estate buyers to monetize non-core land assets, which would help pay down existing debt and fund future expansion. No concrete deal or due diligence process has started yet for the monetization but the intent is cle

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

Fermenta Biotech plans a greenfield expansion with a CAPEX of approximately ₹150-200 crores over the next 2-3 years. The expansion includes setting up new plants in Saykha, Gujarat (near Dahej), focusing on nutrition portfolio diversification. New products targeted include minerals such as iron (ferrous salts) and calcium salts, with significant market opportunity bolstered by government fortification programs. Premixing plants for fortified foods like milk and rice are part of this strategy, aiming to capture a substantial emerging market. The Dahej plant has completed backward integration fo

Future growth expectations in sales/revenue/volumes?

Animal feed volumes are expected to maintain or increase, with potential for 60-70% volume growth once new products get approved by customers. Animal feed prices remain volatile; growth depends on market prices recovering from current lows ($18-$20/kg). Human Vitamin D3 sales are near full capacity; new expansion expected to add 25-30% capacity by end of Q4 FY21. Backward integration to start benefiting margins from Q3 FY21 onwards, expected to improve EBITDA margins by 100-200 bps. New products like vitamin K1 manufacturing to start by Q1 next year, targeting existing customers. Greenfield ex

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

Expectation to maintain EBITDA margins in the range of 20-25% over the next 4-5 years with new and existing business contributing about 50:50 to revenue. Backward integration (manufacturing cholesterol in-house) expected to provide 20-25% savings on cholesterol raw material costs, potentially improving EBITDA margins by 100-200 basis points starting Q3 FY21. Capacity expansion in human healthcare segment expected to increase overall capacity by 25-30%, with commissioning targeted by end of Q4 FY21. Utilization of expanded capacity expected to be immediate. Animal feed business volumes ex

Fermenta Biotec.Q2 FY21Pharmaceuticals & Biotechnology

Fermenta Biotec. Q2 FY21 Earnings Call Analysis

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

Price: ₹417.55P/E: 22.4Market Cap: ₹1.2K CrSector: Pharmaceuticals & Biotechnology

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

Animal feed volumes are expected to maintain or increase, with potential for 60-70% volume growth once new products get approved by customers.
Animal feed prices remain volatile; growth depends on market prices recovering from current lows ($18-$20/kg).
Human Vitamin D3 sales are near full capacity; new expansion expected to add 25-30% capacity by end of Q4 FY21.
Backward integration to start benefiting margins from Q3 FY21 onwards, expected to improve EBITDA margins by 100-200 bps.
New products like vitamin K1 manufacturing to start by Q1 next year, targeting existing customers.
Greenfield expansion at Saykha expected to commence by Q4 FY22 or Q1 FY23, diversifying product portfolio.
The company aims to maintain 20-25% EBITDA margins with balanced revenue streams from existing and new businesses over next 4-5 years.

Margin guidance

Category 1

Expectation to maintain EBITDA margins in the range of 20-25% over the next 4-5 years with new and existing business contributing about 50:50 to revenue.
Backward integration (manufacturing cholesterol in-house) expected to provide 20-25% savings on cholesterol raw material costs, potentially improving EBITDA margins by 100-200 basis points starting Q3 FY21.
Capacity expansion in human healthcare segment expected to increase overall capacity by 25-30%, with commissioning targeted by end of Q4 FY21. Utilization of expanded capacity expected to be immediate.
Animal feed business volumes expected to grow by 60-70% from current levels once new products gain approvals, though prices remain volatile and demand is currently subdued due to COVID-19 impacts.
Long-term revenue growth driven by growing demand for human Vitamin D3 and recovery in animal feed sector post-pandemic.
New greenfield projects with investments of Rs. 150-200 crores planned over 2-3 years for further diversification and growth.

See what Fermenta Biotec. management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

The company plans a greenfield expansion with a CAPEX of Rs. 150-200 crores over the next 2-3 years, mainly for diversification into new nutrition areas.
Funding will be through a combination of internal accruals and some amount of debt.
There is a possibility of reducing or avoiding external debt if real estate monetization works out.
They are actively engaging with potential real estate buyers to monetize non-core land assets, which would help pay down existing debt and fund future expansion.
No concrete deal or due diligence process has started yet for the monetization but the intent is clear.
No mention of immediate equity fundraising; focus seems on financing via internal and debt sources combined with asset monetization.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders for Fermenta Biotech Limited. However, from the discussion, the following relevant points can be inferred: - The company has seen strong demand in the human Vitamin D3 segment with close to full capacity utilization. - Animal feed segment volumes are currently suppressed but expected to recover along with pricing. - New product launches like Vitamin K1 and minerals (iron and calcium salts) are expected to expand the market opportunity. - The company is focusing on increasing volumes by 60-70% in the animal segment once demand recovers. - Backward integration benefits from Q3 FY21 onwards could improve gross margins and support order fulfillment. - Contract manufacturing operations in Europe are undergoing tests with sales expected to ramp up post-validation. No direct data on order book size or specific pending orders are disclosed.

See what Fermenta Biotec. management said on order book — free account, 30 seconds.

Capex plans

Yes

Fermenta Biotech plans a greenfield expansion with a CAPEX of approximately ₹150-200 crores over the next 2-3 years.
The expansion includes setting up new plants in Saykha, Gujarat (near Dahej), focusing on nutrition portfolio diversification.
New products targeted include minerals such as iron (ferrous salts) and calcium salts, with significant market opportunity bolstered by government fortification programs.
Premixing plants for fortified foods like milk and rice are part of this strategy, aiming to capture a substantial emerging market.
The Dahej plant has completed backward integration for manufacturing cholesterol, a key raw material, improving cost efficiency.
Funding for the CAPEX will be a combination of internal accruals and some external debt, potentially offset by real estate monetization.
New production facilities (e.g., for Vitamin K1) are expected to be operational by end of the current financial year or early next year.
An American subsidiary has been set up to expand US market footprint.

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