RPG Life sciences hosted a conference
call on May 2, 2024. In the conference call, the company was represented by Mr
Vishal shah- CFO and Mr Yugal Sikri- Managing director.
Key takeaways
of the call
Domestic Formulations, the biggest
contributor to the company’s business, recorded 15% YoY sales growth in FY24.
The company registered growth in both value and volume - significantly and
consistently ahead of the market based on its 5 pillar-growth strategy.
Company’s new products contribution in domestic
formulations business improved consistently (currently >25%) because of new
launches in specialty & chronic segments and line extensions of legacy
products.
The company intends to enter other specialties
like Gastro and Derma, which will emerge as future growth drivers of domestic
formulations business.
The International formulations business registered
15% YoY growth in FY24. International formulations business new
products/customers/markets contribution continues to improve (currently stands
at 30%).
In FY24, API business registered healthy
growth of 7% YoY driven by continuous thrust on new customer development. The
company is modernizing its API Plant and building strong product pipeline. The
company aims to make API its third engine of growth.
The comprehensive smart life cycle
management program is shaping some of the company’s ‘textbook’ legacy brands
into mega brands and niche specialty portfolio into mega portfolio.
Both Naprosyn and Immunosuppressants
segments clocked sales greater than Rs 70 crore each in FY24. Management
expects both segment to reach its aspirational target of Rs 100 crore sales each.
New launches in specialty and chronic
therapies are helping the company’s Specialty business. The company is also
launching new products in new category – biosimilars.
In FY24, Domestic Formulations
contributed 67% to total sales, International Formulations 18% and APIs 15%.
The company’s 5 pillars of profitable domestic
business growth are, (1) Product portfolio rejuvenation, (2) Strategic brand
assets building, (3) Customer coverage deepening, (4) Sales force effectiveness
augmentation and (5) Profitability improvement.
The company’s 3 pillars of step-wise global
business build up are, (1) building immunosuppressant portfolio, (2) Focus on
products with specific/ competitive advantage and (3) Expand footprints in
emerging/select markets like Myanmar, Vietnam, Philippines, Sri Lanka, Egypt,
Sudan, Thailand, and South Africa.
The company continues to invest in plant
upgradation and capacity expansion.
The company indicated that large part of
capex is done and now new capex will mainly be maintenance capex.
The Company continues to remain
debt-free.
The company’s Salesforce productivity is
consistently improving (currently >5 lakhs).
To improve margin, the company continued
its diligent thrust on cost control measures like Opex and COGS.
The board Recommended equity
dividend of Rs 16 per share of Rs 8 each (200 %) for the financial year ended
March 31, 2024.
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