Buy Supriya Lifesciences Ltd for the Target Rs.1,030 by Choice Institutional Equities
Key Conference Call Highlights
Segment/Product Mix
* The management plans to launch 3–4 new products annually and intends to strengthen the anesthetic and ADHD portfolios with two additional launches in FY27E.
* The cardiovascular advanced intermediate launched in Q3FY26 started contributing meaningfully in Q4FY26 and the management expects the product to scale up steadily in the next 2–3 years.
* The newly-launched ADHD product witnessed a strong demand across Latin America and Europe, with the management expecting continued traction in FY27E.
* The liquid anesthetic product was commercialised successfully in FY26 and is currently supported by stable monthly supplies from the Lote facility.
* The contrast media product launch has been deferred to H2FY27 as the company identified opportunities to improve process economics and enhance cost-efficiency.
* The company is also working on a patent-protected Semaglutide tablet formulation with improved absorption characteristics as compared to existing oral formulations.
Geography & Demand
* Europe witnessed healthy growth as the company added new customers for existing CEP-approved products and secured approvals for additional molecules.
* Asian and semi-regulated markets saw a strong traction for newly-launched products, as these markets serve as the first commercialisation phase before entry into regulated geographies.
Expansion & Capex
* Phase 1 of the Patalganga facility has received all necessary clearances; INR 2000 Mn is earmarked over the next 2 years for two API/advanced intermediate blocks and two formulation blocks.
* An additional INR 400–500 Mn CapEx is planned for the Block F at Lote, which will add 150–200 KL of capacity in the next 2 years along with a D block extension.
* Maintenance shutdown and debottlenecking activities have been planned for the older A & D blocks in Q2FY27.
* An EU GMP audit for the Ambernath facility is expected in H2FY27, while the US FDA audit timeline is still awaited.
Middle East Crisis
* Industry-wide geopolitical challenges, supply chain disruption and elevated crude and solvent prices created headwinds in Q4FY26, which the management quantified as an impact of approximately INR 100 Mn on the quarter's revenue.
* The company was able to pass on raw material price increases to its customers, owing to its purchase-order-based working model.
Outlook
* The management reaffirmed its FY27E guidance of ~20% revenue growth with a target to achieve INR 10,000 Mn revenue and EBITDA margin of 33%–35%.
* The management reiterated its “China plus one” strategy, focusing on products which currently lack meaningful Indian manufacturing competition to protect margin and sustain growth.
* The DSM contract stabilised at INR 300–350 Mn in FY26, with peak revenue of ~INR 600 Mn expected in FY27E.
* The management projects normalised working capital days to remain at 180 days, going forward.
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SEBI Registration no.: INZ 000160131
