Supriya Lifescience Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Supriya Lifescience Ltd (SUPRIYA) Q1 FY23 Earnings Concall

Management Update:

• SUPRIYA said the company is extending its backward integration model to its new products to maintain the competitive edge. The company added that a larger part of the growth and sustainability will be driven by the backward integrated products.

Q&A Highlights:

• Dhaval Shah of Girik Capital asked about Block 4 revenue contribution to total revenue in 1Q23. Satish Wagh Chairman said that company’s 4 blocks are interconnected, so it’s impossible to identify how much revenue is generated from a particular block.

• Dhaval Shah of Girik Capital asked that given the current expansion, if it’s safe to assume that SUPRIYA will be around INR1,000 crore sales by 2025 on an 810 kl capacity. Satish Wagh Chairman replied that going ahead the company is looking at an asset turnover of about 3 because of the new capacities that are going to come up.

• Dhaval Shah of Girik Capital enquired if the company would be able to show growth in 2Q23 over 2Q22 EBITDA margin of 53% on INR150 crore topline. Satish Wagh Chairman said the company cannot comment on quarterly targets, but for FY23 SUPRIYA will be doing very good and margins will be at a healthy rate.

• Keshav Kumar with RakSan Investors asked what’s been the change in per kg prices for acetaminophen.  Satish Wagh Chairman replied that as of now these are stable over the last few years and the growth has come largely due to volumes.

• Nishant Sabnis from Sabnis Financial asked about the margin profile going forward since RM prices have subsided a bit. Satish Wagh Chairman answered that almost 70% of the revenue is generated for backward integrated products. As such there has not been any major impact on the costing for the products.

• Yogesh Tiwari asked about the drivers of Asia revenue declining.  Satish Wagh Chairman replied that it is a factor of the product mix which is a seasonal thing. Some of the products do well in some quarters and there has also been some impact due to China lockdown.

• Siddharth Purohit from InvesQ Investment asked about other costs being higher in the quarter. Satish Wagh Chairman said that the power cost has contributed to the other cost going up. Power costs increased in the recent past. Going ahead, SUPRIYA doesn’t expect any major spike till the next two blocks are operational.