Key highlights from Gland Pharma Limited (GLAND) Q1 FY23 Earnings Concall
Management Update:
- GLAND said it is experiencing increased attrition and is ensuring the company builds enough resources, keeping in mind anticipated growth initiatives of the company.
Q&A Highlights:
- Dheeresh Pathak from White Oak Capital asked about the profit share number for 1Q23. Ravi Shekhar CFO replied that it’s about 10% of the revenue.
- Dheeresh Pathak from White Oak Capital enquired about capex guidance for FY23 and where the company will be spending the money. Ravi Shekhar CFO said that the capex guidance remains same of INR300 crore. In Pashamylaram, in the complex injectibles, GLAND is adding more API capacity. And a bag line needs to be added because of the increased demand.
- Dheeresh Pathak from White Oak Capital asked about any progress on the biologics CDMO from the last communication. Srinivas Sadu MD said there are four customer visits that have happened during the quarter and GLAND is discussing about the commercial terms. That’s where the status is.
- Dheeresh Pathak from White Oak Capital enquired when does the company expect to see the first revenue hit the P&L from CDMO. Ravi Shekhar CFO said it’s too early to comment at this point in time. Currently, GLAND will refrain from giving an exact time frame. But, capability-wise, team-wise, GLAND is all ready.
- Amey Chalke from Haitong Securities asked to quantify the impact on the supply shortages in the plant shutdown in 1Q23. Srinivas Sadu MD said that in US, GLAND lost about INR25 crores due to syringes. ROW about INR100 crore and domestic about INR40 crores.
- Amey Chalke from Haitong Securities asked about PFS suppliers and their struggling to cope up with the demand. Srinivas Sadu MD said that for ROW, GLAND is already qualifying other suppliers. For US, GLAND has enough supply commitments, so it’s using a Chinese and a Italian supplier.
- Amey Chalke from Haitong Securities enquired about staff cost going up in 1Q23. Srinivas Sadu MD replied that what GLAND earlier referred was for one-time bonuses. But comparing now with 4Q22, it’s the incremental staff cost which has come on account of additional head count and normal yearly increment.
- Amey Chalke from Haitong Securities also asked that if it can be assumed that INR98 crore to be a normalized base for staff cost. Srinivas Sadu MD said it can be assumed as the normalized cost.
- Sudarshan Padmanabhan from JM Financial asked about shortage and how do GLAND see things easing up from 2Q23. Srinivas Sadu MD said that while syringes is a major impact that has happened, there are also issues around four or five products where GLAND has filed alternative tubing or filters with FDA.
- Sudarshan Padmanabhan from JM Financial asked about demand with respect to volumes. Srinivas Sadu MD replied that demand is there. Enoxa on a QonQ basis GLAND sold almost three times in 1Q23. Ketorolac is almost 90% growth. So in a way, GLAND is not seeing demand dropping.