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    Astrazeneca Phar

    ASTRAZENGood
    Healthcare·9 Aug 2021
    Management Summary

    AstraZeneca India delivered a resilient performance in FY21, navigating the loss of exclusivity (LOE) for Brilinta and pandemic-related disruptions. While headline revenue dipped 3%, the company achieved massive margin expansion and 29% profit growth through sharp commercial execution and cost controls. Management is pivoting toward a high-growth innovative pipeline in Oncology and CVRM to offset generic headwinds.

    Highlights

    7

    • Registered annual sales of ₹776.8 crores (Rs. 7,768 million) for FY21, a decline of 3.1% YoY.

    • Achieved a total comprehensive income of ₹96.7 crores (Rs. 967 million) for the financial year.

    • EBITDA margins saw significant expansion, improving from 8% in FY20 to 17% in FY21.

    • Profit growth reported at 29% despite the revenue decline, driven by cost optimization and operating leverage.

    • Tagrisso emerged as the single largest selling product, contributing 15.6% of total sales (₹121.5 crores).

    • Underlying growth of the portfolio (excluding Ticagrelor LOE impact) was 9%, double the industry average.

    • Maintained a zero-debt status with ₹350 crores of cash on the balance sheet.

    Concerns

    1

    • Loss of Exclusivity (LOE) for key brands

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹776.8 Cr-3.1%YoY
    2. 02EBITDA Margin17%
    3. 03Total Comprehensive Income₹96.7 Cr+29.0%YoY
    4. 04EPS₹37.3
    5. 05Book Value Per Share₹182.47

    Segment breakdown

    Oncology
    ₹121.5 Cr Tagrisso Sales₹49.7 Cr Lynparza Sales
    CVRM (Cardiovascular, Renal and Metabolism)
    ₹105.6 Cr Brilinta Sales₹100.2 Cr Forxiga Sales
    Respiratory
    ₹15 Cr Revenue
    List

    Guidance & targets

    3
    CategoryTargetPriority
    Market Share
    Indian Pharmaceutical Market (IPM) Growth
    9.3% plus/minus 2%
    		Medium
    Other
    Marketing Spend for New Products
    1.5-2%
    		High
    Revenue
    Long-term Revenue Target
    $1 billion
    		Low

    Risks & concerns

    5
    RiskSeverity

    Loss of Exclusivity (LOE) for key brands

    Ticagrelor (Brilinta) LOE already impacted FY21; DAPA (Forxiga) LOE is a looming threat being managed via pricing. — Both acknowledged

    high

    Pandemic-driven reduction in hospital footfall

    Drastic reduction in patient footfall and postponement of elective procedures impacted sales of certain medicines. — Management acknowledged

    medium

    Stagnant growth in Respiratory segment

    Business has remained flat at ₹15 crores for several years despite high disease prevalence. — Analyst acknowledged

    medium

    Areas of Evasion(2)

    • Specific timeline for the billion-dollar revenue target
    • Detailed breakdown of future CAPEX projects

    Q&A highlights

    3

    “We moderate the dividend payout on a regular basis... to make sure that we have sufficient dry powder for all the contingencies and future investments as we go along.”

    Explains the conservative dividend policy (5-6% payout) despite having ₹350 crores in cash, signaling a focus on reinvestment for growth.

    asked by Satish Bhat / Rahul Jain

    2 min read5 chapters

    Detailed Narrative

    01

    Margin Expansion Amidst Revenue Headwinds

    Despite a 3.1% decline in total sales to ₹776.8 crores, AstraZeneca India achieved a remarkable expansion in EBITDA margins from 8% to 17% in FY21. This was driven by a sharp focus on cost optimization and a reduction in selling and distribution expenses from ₹80 crores in FY19 to ₹45 crores in FY21. Management attributes this to 'operating leverage' and a shift toward digital marketing during the pandemic.

    02

    Oncology Portfolio Dominance

    The Oncology segment remains the primary growth engine, with Tagrisso sales reaching ₹121.5 crores, making it the company's single largest product at 15.6% of total revenue. Management highlighted that Tagrisso is now the market leader in the EGFR-TKI market. The company also launched Calquence in the hematology segment, which has already touched 25 patients within months of launch.

    03

    CVRM Strategy and LOE Management

    The CVRM segment faced significant pressure due to the Loss of Exclusivity (LOE) for Ticagrelor (Brilinta). However, the Dapagliflozin franchise (Forxiga/Xigduo) continued to grow despite generic headwinds. To protect market share, the company has proactively dropped prices for Dapagliflozin to improve affordability and long-term patient adherence, while focusing on new indications like Heart Failure and Chronic Kidney Disease (CKD).

    04

    Capital Allocation and 'Dry Powder' Strategy

    The company maintains a strong balance sheet with ₹350 crores in cash and zero debt. Despite analyst pressure to increase the dividend payout ratio (currently ~5-6%), the Chairman defended the conservative ₹2 per share dividend. He emphasized the need to maintain 'dry powder' for future investments and contingencies as the company pursues its long-term objective of becoming a billion-dollar entity.

    05

    Respiratory Segment Stagnation

    The respiratory business has remained stagnant at approximately ₹15 crores for the past four to five years. Management explained this was due to the heavy involvement of pulmonologists in COVID-19 care, which reduced non-COVID patient loads. They are looking to revitalize this segment through the launch of Fasenra, a biologic for severe asthma, though they admit the biologics market in India is currently nascent.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.