Key highlights from Neuland Laboratories Limited (NEULANDLAB) Q4 FY22 Earnings Concall
Management Update:
- NEULANDLAB said its capex plan is on track and expects CMS segment to perform well and also help the company to improve its future realizations.
Q&A Highlights:
- Ankush Mahajan asked about the reason for low growth for CMS business YoY with demand being very high. Saharsh Davuluri VC MD replied that one of the reason the growth is only 5% is because the company has had an offset due to the de-growth of one of the largest CMS molecules this year.
- Keshav Kumar asked that to make the company’s development efficiency more robust for the CMS vertical, if NEULANDLAB is looking for any translational technologies. Saharsh Davuluri VC MD answered that translational technologies is not something that the company could use. NEULANDLAB uses modern technologies.
- Jatin Kumar asked about revenue or margin guidance for FY23. Saharsh Davuluri VC MD replied that from a business perspective, the general outlook for FY23 is looking healthy. And NEULANDLAB expects to have growth in terms of both CMS and GDS.
- Ankush Mahajan asked about the outlook for CMS business for FY23. Saharsh Davuluri VC MD said that specifically for the CMS business, for the company getting molecules into commercialization is a very important milestone. NEULANDLAB do expect to see the business grow, but are not really able to give any guidance.
- Prashant K asked if the ongoing supply chain issues are going to affect the company in FY23 also. Sucheth Davuluri VC CEO answered that there’s a lot of uncertainty coming out of the whole Russia/Ukraine conflict as well as what’s happening in China. So there’s definitely a challenge caused by the supply chain issues for FY23.
- Ankush Mahajan asked when could the company get the lost business of the INR50-60 crores in the CMS business back. Saharsh Davuluri VC MD replied that the company doesn’t know for sure, because there are certain circumstances that have led to that business not coming for NEULANDLAB. So at this point, the company doesn’t know much.
- Keshav Kumar asked the reason to stop pursuing octreotide. Saharsh Davuluri VC MD answered that one of the main reasons was the lack of commercial interest. But with octreotide, NEULANDLAB has a fully developed process in the lab. And in case there’s any further interest, the company can always take it up.
- Prashant K asked if any patents are going to expire in FY23. Saharsh Davuluri VC MD said that on CMS molecules patents, the company doesn’t expect any patents to expire this year. The patents are at least 5-6 years away. On the generic patent expiry, NEULANDLAB do have molecules such as apixaban, paliperidone and salmeterol where some specific patents are expiring.
- Saneeth Majumdar enquired if there are any new product launches planned in FY23. Sajeev Emmanuel Medikonda replied that the company has certain products expanding in different markets like, apixaban in certain geographies in Europe, paliperidone scheduled for launch in certain markets and rivaroxaban.
- Pramesh Parikh asked about Unit 3, if it’s operational and currently at what capacity it operates in terms of percentage. Sucheth Davuluri VC CEO replied that the company commercialized it last year and as of now, it is operating at roughly around 40% operating efficiencies. And generated close to INR80 crores plus of revenue from Unit 3 in FY21.