Granules India which reported robust Q1FY22 results has earmarked over Rs 400 crore as part of its Capex plan for FY 22. This was one of the takeaways during their conference call with analysts, reports ICICI Direct. It has also earmarked Rs 120-14 crore as R & D expense for FY 22.

ICICI reports the key takeaways from the Q1FY22 earnings call.

Gross margin declined with a reduction in margins on paracetamol due to an increase in KSM price. As indicated, it faced challenges for para-aminophenol (PAP) in Q1. The situation is expected to improve, going forward, as one domestic company has already started production and one more is likely to start supply in the near term. The company expects PAP realisation to normalise in H2FY22.

The company has guided for 8-12% growth in core molecules and 15% growth in non-core molecules over the next three years. It expects new launches and other products to be 40-45 % of the total size by FY 25.

The management expects good visibility in the next three years and will gradually move into complex manufacturing along with high volume products in five-years.

The management also disclosed that in Unit IV facility at Vizag: 16 APIs, four used, five more APIs to be launched. At the Unit V facility at Vizag: DMF four high potent APIs, DMF for six general APIs (five for captive consumption), validating CMO opportunities.

The company has launched five controlled substances with two more expected to be launched (based on Para API).

Capex for Multiple Unit Pellet Systems (MUPS), products to be completed by Q4FY22. Two MUPS products are ready. A total of five MUPS has been approved one launched and 15 under development for USA and EU.

The management guided for maximum capacity utilisation by FY25. In anticipation, GIL acquired Genome Valley facility. Ibuprofen volumes were down due to COVID and it is expected to improve.

Latin America remains key for Pharmaceutical Formulation Intermediate Specialist (PFI), while continuing expansion in Asian and North American markets. In the USA, they have launched one large volume product with market size of above US $ 100 million and close to eight to 10 launches are scheduled for that market at a value of US $ 150 million.

Granules India reported robust Q1FY22 results. Sales were up 15.5 % YoY to Rs 849.8 crore. EBITDA in Q1FY22 was at Rs 201 crore, up 9.7 % YoY with margins at 24.7 per cent. PAT was at Rs 120.2 crore (up 7.8 % YoY).

In conclusion, the ANDA/Dossier filing as of June 2021. It has filed 69, approved—46, tentative approved two, pending—21.