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Neuland Labs Ltd - Q3FY21 Result Update

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Neuland Labs Ltd Q3FY21 Result Update
Twitter Handle: @shuchi_nahar 
Link to Company Overview of Neuland Labs in detail: https://myweekendspot.blogspot.com/2020/09/neuland-labs-company-snapshot.html
The company has announced consecutive another strong quarter of top-line and bottom-line performance. The revenue at Rs.245.6 crores was a 20% improvement over the corresponding quarter of the last fiscal while the margins have shown an upward trajectory and closed at 19.0%. This was driven by growth across the GDS and CMS verticals. The company remains confident of its long-term growth aspirations as well as its margin resilience. 
• Total income increased by 20.0% in Q3FY21 on account of secular growth in GDS and CMS.
• Prime segment continues growth led by Levetiracetam and Mirtazapine.
• Speciality business had a stable quarter led by Deferasirox and Dorzolamide.
• CMS business witnessed growth in scale-up projects and higher projects coming up for validation.
• Two APIs shipped from Unit III.
• Filed DMF for Donepezil Base with USFDA.
• EBITDA margin increased by 480 bps from 14.2% to 19.0% in Q3FY21.
• Increase in PBT margins by 540 bps and PAT margins by 550 bps.

Revenue in Cr
Source: Q3FY21 Investor Presentation
Number of Active CMS Projects
Source: Q3FY21 Investor Presentation
CMS the business has shown a good momentum while the GDS also continues to play an important part in the growth. The driver of this quarter’s CMS uptick has been the strong performance from the scale-up projects which have contributed to the revenues. Unit 3 has started commercial production and the company is currently shipping out 2 API’s from this facility. It's expected that Unit 3 to be a major driver of our growth going forward. 
Regulatory Filings by the Company till Date in various Countries
Source: Q3FY21 Investor Presentation
Chart Showing the Regulatory Filings done by Company
  • 898+ DMFs filed
  • 300+ API processes developed
  • 204+ patents filed
  • Received USPTO patent for improved process synthesis of Paliperidone Palmitate
  • Support for multiple APIs each year in Phase 2 and Phase 3 clinical candidates
Capacity Expansion Plans to cater opportunities
So currently for the year 2021, the company is roughly at around 80 crores of investments and they have a plan to basically evaluate certain CAPEX proposals that are in the pipeline in the range of 50 to 60 crores in this year. So it depends how a particular molecule looks like if it makes the attractive business investment. For the next year also, the company has a similar kind of investment plans because the business is looking attractive for new propositions.

Future Outlook
Company has already developed peptides like Linaclotide. The company is efficiently  working on peptides like Liraglutide and Semaglutide and these are having huge commercial value going forward. These peptides being fairly complex in nature, the timelines for development for filing a DMF are longer.

Typical small molecules take anywhere from 3 to 9 months to file a DMF whereas the complex peptide-like Liraglutide or Semaglutide could take 2-2.5 years. But given that the opportunity is fairly large and the company is excited about these molecules and hopefully, the company is having few interesting partnerships on the generic peptide side. 

Disclaimer: The information provided on Shuchi Nahar’s Weekend Blog is for educational purposes only. The articles may contain external links, references, and a compilation of various publicly available articles. Hence all the authors are given due credit for the same. All copyrights and trademarks of images belong to their respective owners and are used for Fair Educational Purpose only.

Twitter Handle: @shuchi_nahar

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