ASTEC LIFESCIENCES Q2FY23 Earnings Call Highlights
Q2FY22 performance was impacted by flooding in Mahad, hence low base.
Revenue growth driven by mix of volumes and higher realizations.
CMO Sales contributed 8% to sales in Q2FY23 vs 4% YoY.
Export sales more than doubled YoY. Contributed 69% to total revenues. Exports grew 163% in H1.
EBITDA Margins declined due to sharp increase in RM Prices for some enterprise products which cannot be fully passed on and fixed overheads for herbicide plant.
New R&D Centre construction remains on track. Fully commercialised by Jan. Expect 100+ scientists working in the centre.
Will commercialize 2 new CMO Products in H2FY23.
Goal is to have 20-25% revenues from CMO. Continue to heavily focus on CMO.
Want to 100% utilise the herbicide plant by end of 3rd year.
Want to focus on core which is in Triazole chemistry, want to expand portfolio in Triazole products.
Part of strategy was to expand into herbicide area, developed competencies within R&D, commercialised plant last year. Expanding into Sulfonilurea, backward integrating into pyrimidines and then eventually into Fluorination chemistry over medium term.
For most key products, co is fully backward integrated.
Expecting 275-300Cr CAPEX this year, 225-250cr is expected to capitalize in this year. R&D plant would be 110Cr & new MPP would be ~100Cr.
Runrate for intrdoucing new CDMO products is roughly 2 per year. Seeing a good pipeline building up.
Demand for 1 product has been pushed back.
Deferred revenues from last quarter has been added to this quarter.
Not looking at rights issue as of now.
Looking at 1.5-1.7x asset turns for all investments.
Want to have a full control on product lifecycle for all the future products.
Had a margin decline in this particular quarter ex of deferred revenues.
65-68% RM is imported in H1.
Disclaimer:- Nothing on this website should be construed as investment advice. Please consult your financial advisor before taking any decision. We are not SEBI registered RA/RIA. The author owns the stock in their portfolio at the date this post was published.