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

Capex for R&D programs planned around $15 million for FY'21 and FY'22, funded through monetization of certain molecules. (Page 10) Overall capital expenditure planned at around Rs. 500 crore for FY'21. (Page 5) Investment of $25 million for acquiring 25% equity stake in SOFIE Biosciences, a strategic partnership enhancing Radiopharma and CMO capabilities. (Page 14) Plans for de-bottlenecking and maximizing capacity in API and Remdesivir plants with full utilization expected in 2H FY'21. (Pages 13, 12) Expansion of RUBY-FILL installations into Europe and other international markets as part of R

Any current/future new fundraising through debt or equity?

The company approved a Rs.100 crore NCD (Non-Convertible Debenture) raising as an enabling resolution, primarily to reduce high-cost debt and interest costs, not to add new debt. Management is actively working on refinancing bonds maturing in October 2021 for the pharma business, aiming to partly refinance through banks and partly using internal resources, with concrete updates expected by the next quarter. The company aims to continue deleveraging by generating healthy cash flows and reducing debt as much as possible depending on cash generation in H2 FY21 and FY22. No concrete plans cu

Future growth expectations in sales/revenue/volumes?

Pharma segment expects good growth excluding Remdesivir finished doses/API, driven by CDMO running at full capacity and API plant utilizing debottlenecking investments. (Page 15) In CDMO, further growth possible by utilizing capacity in Montreal plant; generics production capacity expanded by 80-90% at Roorkee plant. (Page 15) LSI segment anticipates close to double-digit revenue growth and significant EBITDA growth with higher margins and healthy cash generation for FY21. (Page 4) Nutritional products demand expected to improve in H2 FY21 with strong pricing environment continuing. (Page 1

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

Pharma segment expects good growth excluding Remdesivir, driven by CDMO, API, and Generics with capacity expansions underway (Page 15). Overall revenues improved in Q2 FY21 with Pharma revenue at Rs.1,516 crore and LSI at Rs.784 crore; reported EBITDA Rs.493 crore with 20.8% margin (Page 5). Pharma EBITDA grew 91% quarter-on-quarter; LSI EBITDA grew 12% quarter-on-quarter (Page 5). Expected double-digit revenue growth and significant EBITDA growth in LSI business with healthy cash generation in FY21 (Page 4). Net debt reduced by Rs.193 crore in H1 FY21, with continued focus on deleveraging thr

Current/ Expected Orderbook/ Pending Orders?

For the CDMO business, long-term contract orders continue to get renewed, and since the plant is operating at 100% capacity, the order book number is no longer reported as it loses relevance. The API business had a plant closure for about two months but is now operating at full capacity with a strong order book. Q2 showed substantial improvement over Q1, and better performance is expected in Q3 and Q4. For COVID-related contracts in the CMO business, Rs. 500 crore revenue is expected over the next 10 to 12 months, including Remdesivir and vaccine-related products. Remdesivir plant is alr

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Jubilant Pharmova LtdQ3 FY20Pharmaceuticals & Biotechnology

Jubilant Pharmova Ltd Q3 FY20 Earnings Call Analysis

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

Price: ₹972P/E: 32.0Market Cap: ₹14.8K CrSector: Pharmaceuticals & Biotechnology

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Pharma segment expects good growth excluding Remdesivir finished doses/API, driven by CDMO running at full capacity and API plant utilizing debottlenecking investments. (Page 15)
→In CDMO, further growth possible by utilizing capacity in Montreal plant; generics production capacity expanded by 80-90% at Roorkee plant. (Page 15)
→LSI segment anticipates close to double-digit revenue growth and significant EBITDA growth with higher margins and healthy cash generation for FY21. (Page 4)
→Nutritional products demand expected to improve in H2 FY21 with strong pricing environment continuing. (Page 13)
→Drug Discovery & Development Solutions segment expects strong growth with a healthy pipeline and doubling chemistry research capacity by Q1 FY22. (Page 4)
→Radiopharma business tracking as per budget with plans to expand RUBY-FILL installations beyond North America into Europe and other global markets. (Pages 13-12)

Margin guidance

Category 3

→Pharma segment expects good growth excluding Remdesivir, driven by CDMO, API, and Generics with capacity expansions underway (Page 15).
→Overall revenues improved in Q2 FY21 with Pharma revenue at Rs.1,516 crore and LSI at Rs.784 crore; reported EBITDA Rs.493 crore with 20.8% margin (Page 5).
→Pharma EBITDA grew 91% quarter-on-quarter; LSI EBITDA grew 12% quarter-on-quarter (Page 5).
→Expected double-digit revenue growth and significant EBITDA growth in LSI business with healthy cash generation in FY21 (Page 4).
→Net debt reduced by Rs.193 crore in H1 FY21, with continued focus on deleveraging through healthy cash flow generation (Page 5).
→Proprietary Novel Drugs programs focused on precision medicines with potential for monetization starting next 12-18 months (Pages 10, 5).
→Reorganization to be completed by January 2021 to unlock further value (Page 5).
→No explicit forward EPS guidance but improving operational performance suggests positive earnings trajectory.

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Fundraise plans

Yes

→The company approved a Rs.100 crore NCD (Non-Convertible Debenture) raising as an enabling resolution, primarily to reduce high-cost debt and interest costs, not to add new debt.
→Management is actively working on refinancing bonds maturing in October 2021 for the pharma business, aiming to partly refinance through banks and partly using internal resources, with concrete updates expected by the next quarter.
→The company aims to continue deleveraging by generating healthy cash flows and reducing debt as much as possible depending on cash generation in H2 FY21 and FY22.
→No concrete plans currently for participating in the PLI Scheme or additional equity fundraising are mentioned.
→The reorganization and demerger process is underway, expected to complete by January 2021, but this relates to structural changes, not new fundraising.

Order book

Yes

→For the CDMO business, long-term contract orders continue to get renewed, and since the plant is operating at 100% capacity, the order book number is no longer reported as it loses relevance.
→The API business had a plant closure for about two months but is now operating at full capacity with a strong order book. Q2 showed substantial improvement over Q1, and better performance is expected in Q3 and Q4.
→For COVID-related contracts in the CMO business, Rs. 500 crore revenue is expected over the next 10 to 12 months, including Remdesivir and vaccine-related products.
→Remdesivir plant is already fully utilized with many orders lined up domestically and for export; registrations have been filed in about 70 countries, with exports to approximately 15+ countries so far.

Capex plans

Yes

→Capex for R&D programs planned around $15 million for FY'21 and FY'22, funded through monetization of certain molecules. (Page 10)
→Overall capital expenditure planned at around Rs. 500 crore for FY'21. (Page 5)
→Investment of $25 million for acquiring 25% equity stake in SOFIE Biosciences, a strategic partnership enhancing Radiopharma and CMO capabilities. (Page 14)
→Plans for de-bottlenecking and maximizing capacity in API and Remdesivir plants with full utilization expected in 2H FY'21. (Pages 13, 12)
→Expansion of RUBY-FILL installations into Europe and other international markets as part of Radiopharma business growth. (Page 12)
→No concrete plans currently for participation in PLI Scheme after recent changes. (Page 13)

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