Guj. Themis Bio.

Gujarat Themis Biosyn reported a mixed Q4 FY23, with revenue slightly down at INR28.17 crores compared to INR28.76 crores in the previous corresponding period, a 2.05% YoY decline. However, EBITDA for the quarter increased by 14.12% YoY to INR14.93 crores, with the EBITDA margin expanding by 751 basis points to 52.98%. PAT for Q4 FY23 stood at INR11.69 crores, a 19.41% increase from INR9.79 crores YoY, with a PAT margin of 41.50% and EPS of INR8.05. For the full fiscal year FY23, the company demonstrated robust growth, with revenue rising 29.71% YoY to INR148.97 crores, EBITDA increasing 27.86% YoY to INR74.22 crores (margin 49.82%), and PAT growing 32.88% YoY to INR57.97 crores (margin 38.91%), resulting in an EPS of INR39.90.

The company's INR200 crores capex plan, spanning over two-plus years, is progressing as per schedule. As of the reporting date, INR16 crores have been capitalized, INR20 crores are in Capital Work-in-Progress (CWIP), and INR10 crores have been given as capital advances for equipment. The new warehouse, R&D facility, and API block are anticipated to be ready by September 2023. The final phase of the capex, a new fermentation facility, is expected to be operational by the end of the next calendar year (2024), with an initial investment of INR80 crores for phase one, and an additional INR160 crores planned for subsequent phases.

A significant portion of the capex, approximately INR42 crores, is allocated to the R&D block, which includes two CGMP pilot facilities (one at INR25 crores, two others at INR8 crores) and a new R&D lab (INR9 crores). This investment aims to enable scaling up products developed at lab scale, facilitate regulatory filings, and prepare for commercial production. Management indicated that the API block, once commissioned and after validation batches and stability studies, is expected to start contributing to the top line and bottom line in the next financial year (FY25) or potentially towards the end of the current financial year (FY24).

Management highlighted a positive outlook regarding the WHO's recommendation to shift from Rifampicin to Rifapentine-based treatment for tuberculosis. This change is seen as highly beneficial because Rifa-S, the company's existing intermediate product, is required for both Rifampicin and Rifapentine. Furthermore, Rifapentine requires a higher amount of Rifa-S per dose and is given for a shorter duration (four months vs. six months), implying increased demand for their intermediate. The new API block is strategically positioned to manufacture Rifapentine, aligning with this evolving market demand and targeting export markets.

The company experienced continued slowness in global tenders for tuberculosis products, particularly affecting Rifa-S off-take during Q4 FY23. This tender-driven segment saw several delays, impacting sales volumes year-on-year, though a slight quarter-on-quarter growth was observed as tenders gradually began opening. To mitigate the impact of these delays and prepare for anticipated demand, Gujarat Themis Biosyn maintained 100% production capacity for both Rifamycin-O and Rifa-S, building up inventory in its warehouse for immediate dispatch once tenders fully open.

The balance sheet reflected a shift in the composition of current and non-current financial assets. 'Others' under current assets decreased from INR11 crores to INR90 lakhs, while 'other financial assets' under non-current assets increased from INR9 crores to INR41 crores. This adjustment primarily resulted from moving short-term deposits to longer tenures (15-18 months) to secure higher interest rates. Capital advances for equipment (INR8.83 crores) and security deposits (INR75 lakhs) also contributed to the increase in non-current assets, reflecting ongoing capex activities. The company maintains inter-corporate deposits of approximately INR17 crores under current assets, earning good interest.