Conference Call with Strides Pharma Science Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full transcript.
Management Comments
Arun Kumar, Chairman
I ended my watch as executive MD of the company on 31st March. It's been a strong year of performance. We are pretty proud of what we achieved. Two very important elements of the year: significant uptick in the gross margins with reported increasing over 10%. Two consecutive quarters where our gross margins exceeded 60%. We think this is a phenomenal shift in product selection and execution.
We guided in the beginning at $240-250 million for the FY. We are at the high end of the range. We haven't lost market share or dropped price on any products in the last six quarters. Ranitidine was withdrawn by the FDA across companies after working hours in 31st of March. Overall we grew the business 5X from $50 to $240 million.
Ranitidine: The work FDA has asked us to do will take several quarters. We don't believe this molecule will go back into the market for at least two years. We believe the work is worth it. After its launch in November, we were seeing annualized run rate of $75 million on the product. This would have sped up our achieving our targets faster.
Regarding filings, we have reached a plateau for where we need to get to the $400 million run rate, we don't envision any significant new filings immediately.
Institutional business has been tepid, but we have focused on profitable products.
Several financial outcomes have been achieved this year. Hardly any expansion of the debt book.
(In response to a question) says that pledges on his promoter shares will go to zero.
Komandur Badree, CFO
FY20 has witnessed strong execution and balance sheet. Sustainable EBITDA margins, profitability, efficiency our focus. Solid operating leverage which led to EBITDA margin expansion of 740 bps excepting Ranitidine. Reporting strong operating cash flow of 2,500 million rupees.
Completed our capex programs. Our debt levels are comfortable. Ratio of 1.9 (debt/ebitda). ROCE % is up.
Reduced our contingent liabilities by 13 billion rupees.
Focus on generating free cash and improving return ratios.
Dr. R Ananthanarayanan, CEO and MD
We have achieved significant milestones this year. Not withstanding disruptions in manufacturing due to lockdowns, we didn't see significant impact from COVID19. There has been some depletions of inventory but otherwise we have stayed resilient. Even though uncertainty exists in the COVID19 outbreak, we believe we are well positioned.
US business: we are confident in our future performance in the US markets. We expect growth of 25-30% even without Ranitidine going forward. We launched six products in Q3FY20 delivering annualized revenues of $45 million. We have a basket of 35 products that are approved but not commercialized. We are looking at launching at least five of these products.
Improvements in gross margins consistently in two quarters.
