Gufic Biosciences Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Gufic Biosciences Limited (GUFICBIO) Q3 FY22 Earnings Concall

Management Update:

• In CDMO, GUFICBIO said it’s looking at a 9.4 million vials capacity per month which should make the company the largest manufacturer in the world.

Q&A Highlights:

• Umang Shah from Sarath Capital AIF asked that the diabetes and cardiac foray if it would be oral medicaiton or lyophilized medication. Pranav Choksi CEO replied that primarily they are oral, but the company is working on certain peptides which might be of injectable in nature, maybe lyophilized, maybe pre-filled syringe, maybe liquid depending on the development cycle.

• Umang Shah from Sarath Capital AIF also asked about the Criticare and Fertility segment competition from MNC, if better sales are due to lower cost or better marketing. Pranav Choksi CEO said the drug has to be affordable to the patient that really helps. However for the company, the price is not the only determining factor.

• Ayush Agarwal of Mittal Investments asked about the addressable market for GUFICBIO  in critical care facilities and Infertility? Pranav Choksi CEO replied that according to the company current market size that it has is close to around INR4,500- 5,000 crores which the company is currently doing. Infertility is around close to INR3000 crores and growing.

• Ayush Agarwal of Mittal Investments also asked which are the other therapeutics which are large enough right now. Pranav Choksi CEO answered that neurology in Critical Care and urology as a complement to Infertility and AESTHADERM which is GUFICBIO’s cosmetic thing is something which it thinks should be going up in a much bigger way.

• Aman Vij from Astute Investment Management enquired about capacity utilization, peak sale and ranking in the category of lyophilized injections. Pranav Choksi CEO replied that currently in lyophilized injections GUFICBIO has a 4 million capacity. And right now at around 60-65% capacity in utilization in these products in Navsari. On rankings, the company added that it’s number two. In infertility, the company are in the top 5.

• Aman Vij from Astute Investment Management asked about utilization levels in pre-filled syringes and the liquid syringes. Pranav Choksi CEO replied that in pre-filled, GUFICBIO has enough capacity. Pre-filled capacity is 3 million per month right now and there will be additionally 3 million coming in Indore and right now the company is using hardly 500,000 out of those 3 million per month.

• Gagan Thareja from ASK Investment asked about the debt required additionally for funding the capex and the total capex required for Indore and Navsari expansion. Devkinandan Roonghta CFO said the company is expecting around INR240 crores capex for Indore plant, with INR50-60 for working capital, so total requirement of around INR300 crores.  And for Navsari plant and other, the capex requirement will be around INR20 crores; totaling to INR320 crores. Out of INR320 crores, GUFICBIO will be borrowing around INR150 crores from the bank and remaining will be for internal accruals for this year and from next year.

• Ishita from Ashika Stock Broking asked about IP arrangement with Prime Bio and the R&D spend just as a percentage of revenue. Pranav Choksi CEO replied that on IP arrangement the main development part is done by Prime Bio. GUFICBIO has a profit share where the net margins are divided between both the companies in a particular percentage. R&D spend is depending upon year to year, this year the expectation is it will be in the range of around 8-10%. And next year will be INR50 to INR60 crores.