Analyst Notes

Jul 5, 2023

GUJARAT THEMIS BIOSYN LTD. (GUJTHEM)
  1. Indian Pharma company making APIs using fermentation process
  2. Core competency in their fermentation technique which is difficult to master and requires high capex to install (High Entry Barrier)
  3. Major products include Rifamycin S @ 10000 kg/month and Rifamycin O @ 6000 kg/month
  4. Rifamycin S used for Rifampicin which treats Tuberculosis (TB) and other diseases and Rifymycin used for Rifaximin which treats gastrointestinal diseases.
  5. Only 2 customers – Lupin (45%) and Optrix (55%) [Lupin is an Indian public company with a market cap of around 40,000 Cr.] (Buyer concentration risk)
  6. Only other company which has a license to produce Rifamycin is Macleods (Has filed for an IPO)
  7. Y-o-Y Sales growth of 30% to 149 Cr in FY23; Y-o-Y Profit growth of 33% to 58 Cr in FY23; OPM of 50% in FY23 and 51% in FY22
  8. PE ratio at 20, PEG ratio at 0.28, ROCE @ 61.1% and ROE @ 45.9%

Mohammad Arham

Equity Analyst

Disclaimer: This is not a recommendation. The stock is under study. Premium members will be notified if and when we take any position in the stock.

Jul 7, 2023

NATURAL CAPSULES LTD. (NATCAPSUQ)
  1. Indian pharma company manufacturing Capsule shells and Steroidal APIs
  2. Major offerings in capsules include Hard Gelatin capsules (Company claims to be the 2nd largest Indian manufacturer) and HPMC (vegetarian) capsules
  3. HPMC capsules to target nutraceutical products. Nutraceutical market to grow at 15% CAGR between 2023-28.
  4. Planning to manufacture Steroidal APIs using fermentation technology
  5. 3 out of 4 planned APIs accepted under PLI scheme by GOI. These are: Prednisolone, Betamethasone and Dexamethasone.
  6. Indian API market to grow at 7-8% CAGR over next 3-5 yrs.
  7. Major competitors: Capsugel (world’s largest manufacturer of capsules), Qualicaps and ACG (ACG is the largest capsule manufacturer in India)
  8. Y-o-Y sales growth at 26% to ₹ 170 Cr., Y-o-Y profit growth at 33% to ₹ 18 Cr., OPM FY23 at 21% and FY22 at 19%
  9. PE is 18.4, PEG at 0.24, ROCE is 16.1% and ROE is 17.9%

Mohammad Arham

Equity Analyst

Disclaimer: This is not a recommendation. The stock is under study. Premium members will be notified if and when we take any position in the stock.