Marksans Pharma Q4 FY2024 Earnings Conference Call Summary
Overview
• Date of Call: May 31, 2024
• Release Date: June 5, 2024
• Key Participants:
• Mark Saldanha (Chairman and Managing Director)
• Jitendra Sharma (Chief Financial Officer)
• Hosted by Elara Securities
Financial Performance
• FY2024 Highlights:
• Record revenues: INR 2,177 crores (up 18% YoY)
• EBITDA: INR 459 crores (up 35% YoY)
• Positive outlook despite Q4 revenue decline due to seasonal factors and increased costs.
• Q4 FY2024 Results:
• Operating revenue: INR 560 crores (up 15.2% YoY)
• Gross profit: INR 290 crores (Gross margin: 51.8%)
• EBITDA: INR 109.6 crores (17.6% decline QoQ)
• Profit after tax: INR 77.6 crores (down 6.1% YoY)
• Recommended final dividend: INR 0.6 per equity share.
Growth Strategy
• U.S. Market Focus:
• Projected revenue doubling from $100 million to $200 million in two years.
• Target of INR 3,000 crores by FY '26 remains feasible.
• Anticipated 15% volume growth in FY '25.
• Investment Plans:
• R&D spending around 2% of revenue.
• Capital expenditures of INR 100-125 crores for FY '25, focusing on Teva facility.
Operational Insights
• Market Dynamics:
• U.S. market expected to drive revenue growth, with the U.K. contributing significantly.
• Operational efficiencies anticipated to improve EBITDA margins to around 23%.
• Geopolitical Risks:
• Acknowledged unpredictability affecting U.S. operations.
• FDA Compliance:
• Recent FDA observations at Goa facility addressed adequately.
Additional Inquiries
• Dividend Policy:
• Based on free cash flow, prioritizing growth investments.
• Product Launches:
• Multiple launches planned for FY '25, specifics not disclosed.
• Margin Sustainability:
• Confidence expressed in maintaining or improving net margins.
Conclusion
• Management expressed optimism about growth trajectory and market strategies, thanking participants for their support.

Marksans Pharma Q3 FY2024 Earnings Conference Call Summary
Conference Call Details
• Date: February 14, 2024
• Participants:
• Mark Saldanha (Founder & Managing Director)
• Jitendra Sharma (Chief Financial Officer)
• Moderator: Bino Pathiparampil (Elara Securities)
Financial Performance Highlights
• Revenue Growth:
• 22% year-on-year increase to INR 586 crores (from INR 479 crores).
• US & North America revenue rose 18% to INR 257 crores.
• UK & EU markets grew by 34% to INR 251 crores.
• Profitability:
• Gross profit increased by 30.4% to INR 313 crores (gross margin: 53.5%).
• EBITDA surged 73.6% to INR 133 crores.
• Profit after tax rose 33.2% to INR 83 crores.
• Nine-Month Performance:
• Operating revenue reached INR 1,617 crores (18.4% increase).
• Profit after tax of INR 237.3 crores (up 29.9%).
• Capital Expenditure:
• INR 160.6 crores primarily for Teva Pharma unit.
• Maintained a debt-free status with INR 688 crores in cash.
Growth Strategy and Market Insights
• Future Projections:
• Aim for a top line close to INR 3,000 crores in two years.
• UK Market Growth:
• 30% year-over-year increase attributed to strong product pipeline and improved product mix.
• Projecting double-digit growth in the UK.
• Product Launches:
• Focus on niche, high-value products; 34 new products planned for the UK.
Market Dynamics
• Market Segmentation:
• UK: 60% OTC, 40% prescription; US: 75% OTC, 25% prescription.
• Competitive Landscape:
• OTC market stability vs. volatility in prescription market.
• Addressed price erosion in RX segment.
Teva Pharma Acquisition Insights
• Revenue Potential:
• Estimated additional revenue of around INR 600 crores in FY25 from Teva unit.
• Production Capacity:
• Current contracts worth 3.6 billion units, with plans to scale to 8 billion units.
Operational Efficiency and Future Outlook
• EBITDA Improvement:
• Two-thirds from raw material cost reductions; remainder from operating leverage.
• Depreciation Charges:
• New baseline of INR 22 crores due to Teva plant and warehouse.
• Long-term Goals:
• Projected turnover of INR 600 crores from Teva plant next financial year, aiming for INR 1,000 crores.
Conclusion
• The call concluded with a focus on maintaining growth and efficiency while navigating market challenges, with optimism for future performance and strategic opportunities.

Earnings Highlights
• Date of Call: November 9, 2023
• Revenue Growth: 17% year-on-year increase
• EBITDA and Profit After Tax: Approximately 40% year-on-year growth
• Gross Profit Margin: Increased to 52.4%
• Profit After Tax: Rs. 83.9 crores for Q2
Key Developments
• Product Approvals: Received approvals from USFDA and UK MHRA for new products.
• Teva Manufacturing Unit: Ongoing integration expected to drive revenue growth.
• Product Pipeline: Focus on enhancing offerings in key therapeutic areas.
Market Insights
• US and UK Markets: Optimism about growth despite recessionary trends; US projected to contribute 45-48% of revenue by FY25.
• OTC Product Landscape: Competitive but with plans for market share expansion.
Strategic Initiatives
• Backward Integration: Targeting specific raw materials to improve efficiency.
• Annual Filings: Aiming for 5 ANDAs in the US and 15-20 in Europe.
• Capital Allocation: Prioritizing CAPEX for new plant and exploring M&A opportunities in Europe.
R&D and Cost Management
• R&D Spending: Gradual increase expected to reach around 2% by FY25-26.
• Raw Material Costs: Future improvements anticipated from operating leverage and product enhancements.
Competitive Strategy
• Margin Profiles: Branded products yield higher margins but require significant upfront investment.
• M&A Potential: Could reduce costs and timelines for achieving higher margins.
Conclusion
• Future Outlook: Focus on strategic growth, operational capabilities, and market share expansion.
• Closing Remarks: Saldanha expressed gratitude and wished participants a Happy Diwali.

Marksans Pharma Q1 FY2024 Earnings Conference Call Summary
Key Highlights
• Date of Call: August 16, 2023
• Revenue: Exceeded INR 5 billion, a 15.3% year-on-year increase.
• Profit: Gross profit of INR 257.3 crores; profit after tax of INR 70.4 crores (17% increase).
• Market Expansion: Growth driven by new product launches and market share in the US, UK, and Australia.
• Teva Facility: Successful integration of a newly acquired manufacturing unit in Goa, expected to contribute significantly by Q4 FY2024.
• Regulatory Approvals: Received US FDA approval for a key OTC product; added to MSCI Global Small Cap Index.
Financial Insights
• Expense Increase: Approximately Rs. 11 Crores increase related to the Teva facility.
• Revenue Projections: Expected to exceed Rs. 2000 Crores for FY2024, with profit margins between 17% and 19%.
• Teva Contribution: Estimated revenue contribution of Rs. 40 to 50 Crores from the Teva facility in FY2024.
Operational Updates
• Capacity Utilization: Currently around 70%, excluding the Teva facility.
• EBITDA Margins: Projected to improve to 21-22% as Teva operations ramp up.
• API Backward Integration: Plans to file a Drug Master File (DMF) by September.
Market and Product Strategy
• Product Launches: Plans for three to four product launches in the US this financial year.
• OTC Market Participation: Potential involvement in RX to OTC switches, dependent on specific molecules.
• Focus on Generics: Emphasis on generics over branded products due to investment requirements.
Challenges and Outlook
• Cost Management: Assurance that expenses are on target, with some increases expected as operations scale.
• Working Capital Cycle: Expected to remain around 120 days due to increased material and receivables needs.
• Growth Optimism: Aiming for revenue growth exceeding historical rates, targeting Rs. 3000 Crores.
Conclusion
• Investor Engagement: Mark Saldanha thanked investors for their support and participation, emphasizing the company's growth strategy and operational stability.

Marksans Pharma 4QFY23 Earnings Conference Call Summary
Strong Financial Performance
• Exceeded revenue guidance of INR 1,800 crores for FY23.
• Total revenue reached INR 1,852 crores, a 24.2% year-on-year growth.
• Q4 operating revenue increased by 16.3%.
• EBITDA rose by 72.1%, leading to a significant increase in profit after tax.
Key Developments
• Successful acquisition of a manufacturing plant from Teva Pharma.
• Share buyback and dividend announcement.
• Plans for new product launches and geographic expansion.
Inventory and Cost Management
• Nearing end of high-cost inventory; improvements in raw material costs expected.
• Cost-saving measures in freight expenses returning to pre-COVID levels.
New Product Launches
• Upcoming approvals in digestive, pain, antidepressants, and cardiovascular segments.
• Confidence in achieving revenue benchmark of INR 2,000 crores for FY24.
Teva Facility Integration
• Revenue generation from the Teva facility expected to begin in Q3 FY24.
• Target of producing 5 to 6 billion tablets by FY25.
• Initial product mix to align with current offerings, with gradual introduction of new products.
Acquisitions and Growth Strategy
• Evaluating acquisition opportunities on a case-by-case basis.
• Focus on qualitative synergies rather than specific acquisition sizes.
• Exploring inorganic growth opportunities in Europe and India.
Future Outlook
• Optimism for growth in FY24, particularly with contributions from the Teva facility.
• Aim to improve EBITDA margins towards 20% in the long term.
• Plans for API manufacturing investments targeting top five molecules.
R&D and Product Pipeline
• Increase in R&D spending from 1.5% to 4-5%.
• Pipeline of 92 products awaiting approval or planned for launch.
• Strategic selection of molecules based on market potential and competition.

Marksans Pharma Q3 FY23 Earnings Conference Call Summary
Key Financial Performance
• Revenue Growth: 32% year-on-year, reaching Rs. 479.8 crores.
• EBITDA Margins: Stable at 16.0%.
• Equity Raise: Rs. 372.40 crores through share conversion.
• Share Buyback: Completed worth Rs. 32 crores.
• Future Revenue Target: Aiming to exceed Rs. 2,000 crores in the next financial year.
Market Insights
• Market Share Gains: Achieved despite pricing pressures in the U.S. market.
• Inflation Impact: High-cost inventory held; benefits from reduced costs expected in six months.
• Channel Destocking: Anticipated to be seasonal rather than significant.
Strategic Initiatives
• Product Launches: New products and strategic partnerships to drive growth.
• Rx to OTC Transition: Strategic opportunities for increased consumer access and volume growth.
• Teva Plant Integration: Set to begin on April 1, 2023; expected to contribute significantly in the future.
Operational Strategies
• Cost Management: Partnering with CDMOs instead of acquiring an API plant to control costs.
• Capital Expenditure: Budgeted INR 200 crores for Teva plant expansion and capabilities.
• Inventory Management: Increased inventory days from 120-150 to around 200 days due to revenue growth.
Future Outlook
• Pipeline Expansion: Plans for 34 new filings in the UK and 32 in the US.
• Revenue Doubling Potential: Expected from new filings and Teva plant expansion.
• Market Sentiment: Focus on improving market perception to unlock shareholder value.
Conclusion
• Management remains optimistic about maintaining growth trajectory and addressing challenges in the market.