SMS Pharmaceuticals Limited Q1 FY23 Earnings Conference Call Insights

Key highlights from SMS Pharmaceuticals Limited (SMSPHARMA) Q1 FY23 Earnings Concall

Q&A Highlights:

• Atul Kothari from Progwell Securities asked about the products under pipeline with Chemo JV. Vamsi Krishna ED replied that the products already on the pipeline are almost developed. There are 8 products as part of JV and except 1-2 products all have been validated and is waiting for patent expiry for commercialization.

• Atul Kothari from Progwell Securities also enquired about the revenue generated as of now from the Chemo JV. Vamsi Krishna ED replied that the revenue contribution in the current financial year is about 11%.

• Atul Kothari from Progwell Securities asked about the ANDAs VKT has as of now and how many can be expected by end of FY26. Vamsi Krishna ED replied that currently the company has 6 ANDAs and by FY22, SMSPHARMA will be filing two more ANDAs.

• Priyanka Shah of KP Advisors enquired about the R&D expense as a percentage of revenue for FY22 and outlook for FY23. Vamsi Krishna ED answered that for FY22 it’s about 4% and for FY23 expectation is growth of about 20% of previous year’s expenditure.

• Priyanka Shah of KP Advisors asked how many new products have been launched in FY22 for non-ARV products and FY23 expected launch. Vamsi Krishna ED replied that commercial launch was three products. Next year, the company is planning to add about 8-10 products to the portfolio.

• Ankush Mahajan with Axis Securities asked about the revenue of top five products and revenue contribution for ibuprofen. Vamsi Krishna ED said that yearly antiretroviral typically contribute around 35% revenue. Antiretroviral, there’s only one product, Tenofovir, which contributes to 35% of revenue. And ibuprofen contribution is less than 10% and expectation is about 35% growth in future.

• Meenal from CJ Shah and Company asked about the future expectation of pricing. Vamsi Krishna ED replied that IB prices have gone back to pre-2017-18 time period. The expectation is it won’t go down any further.

• Nishita Shah of Raga Securities enquired if the company expects to turn EBITDA positive by end of 2Q23 and PAT positive by end of FY23. Vamsi Krishna ED said the company has set that target and is positive about the hope of achieving it.

• Viraj Parekh of JMP Capital asked about the pricing scenario pertaining to the API in 1Q23 vs. 4Q22. Vamsi Krishna ED clarified that it’s not depreciated too much; it’s about 5% here and there but not more than that.