FDC Limited Earnings Conference Call Summary (November 16, 2023)
Financial Performance
• Half-Year Results (ending September 30, 2023)
• Consolidated revenue growth: 9% (INR 1,023 crores)
• Domestic revenue growth: 6%
• Export formulations growth: 31%
• EBITDA: Increased by 36% to INR 198 crores
• Profit after tax: Increased by 47% to INR 180 crores
• Share Buyback
• Board approved buyback of 31 lakh equity shares at INR 500 each.
Management Insights
• Expenditures
• One-off, investment-related expenses in Q2 and H1: INR 9 crores.
• Sales Strategy
• Focus on core products, especially antibiotics.
• Expansion of sales force and presence in weak markets (East India).
• Brand Performance
• Successful brands: Zifi CV, Zifi-O, Flemiclav.
• Anticipation of several brands surpassing INR 100 crores in sales.
EBITDA and Margins
• EBITDA Margin Discussion
• Year-to-date EBITDA margin: just above 19%.
• Reduction in margins attributed to one-off expenditures and seasonal sales.
Business Operations
• India Business
• Current field force: approximately 4,800.
• Consolidation phase with no significant changes.
• Export Business
• Consistent growth, run rate of INR 400 crores.
• Strategy to expand in non-US markets (13% of total revenue).
Cost Management
• Operational Efficiencies
• Focus on growth while pursuing operational efficiencies in manufacturing and marketing.
• Investment in Exports
• Cash from India business may be reinvested in exports.
R&D and Capex
• R&D Expenses
• No major capex needs; expenses for clinical studies and market registrations targeting the U.S.
• Future Capex Plans
• Planned expenditure of INR 170 crores over 12-15 months for projects including a new corporate office and R&D center.
Employee Productivity and Sales Strategy
• Salesforce Strategy
• Focus on enhancing productivity of existing Medical Representatives (MRs).
• Geographical expansion in underrepresented regions.
Food Division
• Market Entry
• Growth potential in food division with brands like Simyl and MumMum.
• Addressable market for Nutrica portfolio: INR 2,400 crores (current market share: 3.9%).
Market Dynamics
• Pricing Strategy
• Adjusted pricing strategy for ophthalmic products due to rising costs and regulatory constraints.
• Enerzal Brand
• Strong market presence with a shift towards sports activations in marketing.
Conclusion
• Future Engagement
• Company plans to engage with investors on a half-yearly basis unless significant events arise.