Transcript of Conference Call held on April 12, 2016 [Company Update]

8/18/2019 Transcript of Conference Call held on April 12, 2016 [Company Update]

1/17


2/17

“

MANA

mkar

EMENT:

pecialit

MR . PRAOSCLMR . OMMR . PRA

Page

Chem

Apri

VIN HERL

AR HERLVIN AGRA

1 of 16

cals Li

l 12, 2

KAR – CH

KAR – WAL – CHI

ited C

16

AIRMAN &

OLE-TIMEEF FINANC

nferenc

MANAGIN

DIRECTOIAL OFFIC

e Call”

G DIRECT

, OSCLR , OSCL

R ,


3/17

Moderator

Omkar He

:

lekar:

Ladies and G

Demerger Pr

Pravin Herle

and Represen

lines will be i

the presentati

operator by p

recorded. I n

you and over

Thank You a

company; Mr

like to welco

This is the m

‘Presentation’

Starting with

Private Limi

Chemicals P

merging four

LASA Labor

Limited and

The rationale

number of le

significant re

wholly-owne

administrativ

would be co

eliminating

entities.

Moving to th

to the new co

from the par

Omkar’s Spe

growth poten

and totally i

intention of g

Demerger L

Page

entlemen, Good

cess of Omkar

ar – CMD; Mr.

tative of Bridg

n the listen-onl

on concludes. S

essing ‘*’ then

w hand the co

to you sir.

nd Good After

. Pravin Agraw

e you all on b

erger and deme

on our website

the Merger, w

ted, Urdhwa

ivate Limited

of these wholly

atories Private

esh Chemicals

behind this me

al entities and

duction in the

subsidiaries.

costs and mult

certed effort a

uplicative co

Demerger, the

mpany which i

nt company th

iality Chemical

tials, the risk re

dependent of e

rowing each bu

SA Supergene

2 of 16

Day and Welc

peciality Che

Omkar Herlek

e IR the Invest

mode and ther

hould you need

‘0’ on your tou

nference over t

oon, Friends.

l – CFO; Brid

half of Omkar

rger exercise u

and hope you h

e have five wh

Chemicals Pri

and the newly

owned subsidia

Limited, Urdh

Private Limited

rger is it helps

eorganizing the

multiplicity of

Also, there w

iple record keep

d focus by the

munication an

Vet API busin

LASA Superg

t is Omkar Sp

s business and

wards, the regu

ach other. We

siness to its true

ics will carry

Om

me to the Con

icals Limited.

r -- Wholetime

r Relations A

e will be an op

assistance duri

htone phone. P

Dr. Omkar H

I have with me

e IR, our Advi

Speciality Che

dertaken by th

ave received th

olly-owned su

ate Limited,

established L

ries into the par

a Chemicals

.

us to simplify t

legal entities i

legal and regul

ill be a lot o

ing which will

senior manage

burdensome

ess of Omkar S

enerics Limited.

eciality Chemic

the Vet API bu

latory and capit

are demerging

potential and a

ut the Vet AP

ar Speciality

erence Call to

oday, we have

Director; Mr.

visors. As a re

ortunity for yo

g the conferenc

lease note that t

erlekar for ope

Mr. Pravin H

sors for Investo

icals Limited t

e management.

‘Presentation’.

sidiaries namel

Rishichem Res

SA Supergene

ent company. T

Private Limited

he corporate str

the group stru

atory complian

f elimination

result in good c

ment towards t

coordination e

eciality Chemi

. This company

als. Reason for

iness are totall

al needs are ev

the Vet API b

chieving operat

I business and

Chemicals L April 12,

iscuss the Mer

with us on the c

ravin Agrawal

minder, all part

to ask questio

e call, please si

is conference i

ing comments.

rlekar -- CMD

r Relations. We

this Conferen

We have uploa

y LASA Labo

earch Limited,

rics Limited.

e four subsidia

, Rishichem R

ucture by reduc

cture. This will

es carried out

f duplication

st savings. Als

e business gro

fforts across

als will be tran

will be then de

this Demerger

divergent, so a

n very much d

usiness with th

ional efficienci

Omkar Speciali

imited2016

er and

ll, Mr.

-- CFO

icipant

s after

nal an

s being

Thank

of the

would

e Call.

ed the

atories

Desh

e are

ries are

search

ing the

lead to

by the

in the

, there

wth by

ultiple

sferred

erged

is that

lso the

ifferent

e main

s. Post

ty will


4/17

Moderator

Nitin Gaus

:

ar:

focus on the

Intermediates

which will be

share swap raget one fully

Demerger LA

and the Bom

Laboratories

the promoter

Supergeneric

Chemicals ho

Public. As pe

Rs.304 crores

and net wortRs.109 crore

LASA for hal

Rs.128 crores

Coming to th

of the Vet AP

3-years. Also

3-years at lea

next 2 to 3-y

is around 85

lease model

requirements

capital cycle

and ways to r

intact for bot

ROAs to imp

We would no

Wonderful E

Thank you ve

from the line

Sir, on this L

turnover, say,

today if you

Page

roduction, sale

as well as Re

transferred to

tio will be in th paid additional

SA Supergener

ay Stock Excha

imited. Post th

holding 65.7

, the holding o

lding 10% in li

r September 30,

and the net wo

was Rs.72 cro; this is inclus

f year was Rs.6

and the PAT o

e Working Capi

I business. We

, there is no incr

st where we hav

ars. Our curren

to 90%; how

f the contract

but also make

and towards re

educe our CAP

Omkar as wel

ove for both th

w welcome qu

ening.

ry much. We w

of Nitin Gausar

ASA, just want

three years do

ere supposed t

3 of 16

s of Selenium

olving Agents.

ASA Supergen

ratio of 1:1 whequity share of

ics will be listed

nge. The name

is exercise, ther

% of the Eq

f the promoter

eu of its invest

2015 total asse

th was Rs.62 cr

res. Total borr ive of both fu

3 crores with P

Rs.11 crores.

tal Cycle: For

expect total of

emental CAPE

e enough capac

t capacity utiliz

ever, going for

manufacturing.

us more effici

uction of the d

X requirement

as LASA. We

businesses goi

stions from yo

ill now begin t

from Religare I

ed to understan

n the line whe

put in a new C

Om

erivatives, Iodi

Unit-5, Unit-6,

erics while the

ere for each shresulting comp

on both the ex

f LASA Super

e will be no cha

ity and Rest

of Omkar wil

ment in the co

ts of the de-mer

ores. As for LA

wings for Omd and non-fun

T of Rs.8 crore

ASA it is not

s.20 to 25 cror

requirement i

ities that will en

tion is around

ard we plan t

This will not

ient. We are c

ebt on the boo

for next 2-3-ye

believe that the

g forward.

u all. Thank yo

e Question-and

nvesco. Please

on the manuf

n you are requi

APEX, what co

ar Speciality

ne Derivatives,

Urdhwa and

est units will re

re of Omkar heany that is LA

hanges, i.e., Na

enerics will als

nge in the share

held by the

l be at 59.2%

pany and Rest

ged Omkar Spe

SA, the total as

ar was Rs.225d-based borrow

s. As for Omka

igh basically o

s of working ca

mediately for

able us to take

30%. At Omkar

bring the busi

nly take care

mmitted towar

s. We are plan

rs while keepin

se meanswill e

u for your parti

-Answer Sessio

o ahead.

cturing side, w

red to put in a

uld be the asset


Organic and In

ASA are the f

main with Omk

d, the shareholA Supergeneric

tional Stock Ex

o be changed to

holding of Omk

ublic. As for

ith Omkar Sp

30.8% being

ciality Chemica

ets were Rs.22

crores and LAings. The reve

half year reven

account of the

pital over the n

ASA for the n

are of the sales

, at capacity util

ness growth thr

n the higher c

ds managing

ing on various

g the growth tra

able ROCE as

cipation. Wish

n. The first que

at is the kind

ew CAPEX, sh

turnover from h

imited2016

rganic

cilities

ar. The

er wills. Post

change

LASA

ar with

LASA

eciality

eld by

ls were

crores

A wasue for

ue was

nature

xt 2 to

xt 2 to

for the

ization

ough a

apacity

orking

means

jectory

well as

You A

stion is

f asset

ares of

ere on?


5/17

Pravin He

Nitin Gaus

Pravin He

Omkar He

Nitin Gaus

Pravin Ag

Nitin Gaus

Pravin Ag

Omkar He

Nitin Gaus

Omkar He

lekar:

ar:

lekar:

lekar:

ar:

awal:

ar:

awal:

lekar:

ar:

lekar:

Typically, the

might be littl

may be in a y

Recently, we

to do with O

The CAPEX

had also don

ultimately go

Whatever CA

The balance

Rs.140 crores

the upcoming

It is already t

On the worki

in inventory

capital the wa

We do not h

December it

up to 100 da

come down, i

which used t

which used t

great contrib

days.

I would like t

of 110 to 120

But this was

LASA side o

LASA side o

the debtor lev

Page

asset turnover

low because s

ear’s time it wil

had done a big

kar?

was done in Ch

e some CAPE

into LASA.

PEX has been d

heet now whic

. This is includi

time period?

king into accou

g capital side,

ays, debtors da

y you have bee

ave the figures

as reached up

s in the past, n

nventories have

be up to 150 t

be up to 200-

tions for worki

o add on this th

-days. So we ar

more to do wit

business?

business is in

el is low, the re

of 16

hould be some

ome of the cap

be somewhere

APEX at Chip

iplun plants and

in Urdhwa t

one in Unit 5 as

we are seeing

ng the CAPEX

nt the CAPEX

could you split

ys and trade pa

able to do it in

for the LAS

to 94 days of w

w it is coming

come down an

o 180-days has

days that has a

g capital cycle

e industry stand

well within tha

the chemicals

act much better

lizations are fa

Om

here around 3

cities are in th

around 3x.

lun plant. So, th

that is mostly i

hat is one of t

well as Unit 6 t

as of 30th Sep

that had gone b

hich has gone.

up between the

yables? Is there

Omkar Special

and Omkar s

orking capital

up to 94 days o

similarly the c

now come dow

so come down

, overall, which

ard for working

t and our endea

side of the bus

in the same ter

ter.

ar Speciality

to 3.5 in the eve

process of gett

is was more to

n Unit 5 and U

he subsidiaries.

transferred to L

tember 2015, th

y or there is mo

average time p

a scope to squ

ity?

eparately, but c

ycle, gradually

n working capit

editors have als

n up to 90 to 11

to 100-days. S

has come dow

capital and kn

vor will be to m

iness or is it eq

s of number o


tual phase. Init

ing launched, b

o with LASA

it 6 in Omkar

All these asse

SA.

e fixed asset sh

re to get capital

eriod that will b

eeze down on

onsolidated as

reduce the inve

al cycle. Debto

o come down.

0-days. The in

all these have

from 204-day

wledge is in th

aintain that.

ally applicable

working days

imited2016

ially, it

ut then

r more

lus we

ts will

own is

ized in

e there

orking

of 31st

ntories

s have

ebtors

entory

put in

to 94-

e range

on the

ecause


6/17

Nitin Gaus

Omkar He

Nitin Gaus

Omkar He

Nitin Gaus

Omkar He

Nitin Gaus

Omkar He

Nitin Gaus

Omkar He

Moderator

Baidik Sar

Omkar He

Baidik Sar

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

:

ar:

lekar:

ar:

Would you b

inventory, de

We will come

Sir, on EBIT

great underst

that?

If you go to

range of the

16% to 18%

Europe. So d

In your openi

35%?

Right, becaus

have not yet

pending, one

environment

up now, so

occupied will

So the 30% u

No, not the e

We might tak

At least take

Thank you. T

LSL before th

Revenue? LA

Only after the

provided post

division?

Page

e having the nu

tors and trade

back to you sir

A margins, si

nding on EBI

see individually

EBITDA which

epending on w

pends on that. I

ng remarks, yo

e lot of CAPE

capitalized the

big facility had

onsent which

e can immediat

gradually go up

tilization we are

isting, existing

e 3-4-years to r

.5-3-years.

e next questio

e merger what

SA Supergeneri

demerger it wi

-merger some

5 of 16

mbers in terms

ayables in LAS

over this becau

ce we are havi

DA margin wh

LASA is curr

we are usually

hat is the positi

t is more or less

mentioned ab

was done in t

assets as, what

come up at Uni

as not on place

ely start the fa

substantially.

seeing is post d

capacity is near

n it down to ful

is from the line

ort of revenue t

cs is a very new

l get the API di

s.71 crores of r

Om

of September

A?

se we do not ha

ng the PAT nu

at LASA woul

ntly harvesting

doing in LAS

n of the dollar

the same.

ut the capacity

he last 2-years

you call, the c

t 5 in Chiplun

; however, sinc

ility soon and

oing the CAPE

y 65% to 70%

l 80% utilizatio

of Baidik Sark

hat they do?

ly formed com

vision of Omka

evenue, is comp

ar Speciality

015 balance s

ve it off hand ov

ber in front o

be enjoying.

EBIT of 22%

. The same fo

, what is the po

utilization in L

and a lot is pe

mmissioning o

o that took a lo

e the environme

facility which i

and not the ex

tilized.

?

ar from Unifi C

any.

r, that is what i

letely the existi


eet date what

er here actually

us, we do not

ould you elabo

to 24%. So thi

Omkar is aro

ition of the ma

ASA being aro

ding to capital

f the facilities

ng time becaus

nt consents hav

seeing current

isting?

pital. Please go

the breakup y

g revenues of t

imited2016

as the

.

have a

rate on

is the

nd say

kets in

nd 30-

ize, we

re still

of the

e come

y 30%

ahead.

u have

he API


7/17

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

Transferred t

As of now, t

API division

utilization?

Perfectly righ

Or is it at the

You may say

have not hap

rest all are in

In terms of ti

will take nor

It is everythi

happen toget

into a single s

You expect it

8 to 10-mont

What kind of

back, I think

division, but

you can touch

For 9-months

the same run

will show us

year.

That will als

kind of peak

The kind of

many approv

year, then our

Page

LASA Superg

e EBITDA ma

makes the mar

t.

current level of

that way also

ened yet. So as

commissioning

elines, whethe

ally 8-12-mont

g in a single

er actually. Th

cheme.

to conclude in

s to be more pr

revenue potenti

ou had indicate

might have got

upon the Veter

our revenues a

ate for this yea

the light that th

witness gradu

argins are you

egulatory appr

ls which are pe

margins might

6 of 16

nerics.

gins that you h

gins are betwe

30% utilization

because if you

on the date the

stage.

r this merger a

hs to complete

scheme. It is a

ere is no bound

-12-months or

cise.

l would LSL h

d a number of

that number wr

inary API mark

re around Rs.1

. Then usually t

e business will

l margin progr

looking for FY1

vals which we

nding in LASA

slightly increas

Om

ave mentioned

n 22-24%, is t

take 30% utili

active facilities

d demerger are

nd then demerg

court process

ary of separatio

ore than that?

ve on a going c

s.200 crores be

ong. So, if you

et size it will be

0 crores in LA

he business for

grow somewhe

ession as your

17-18?

are awaiting li

Laboratories, s

because regula

ar Speciality

to the previous

hat right, at the

ation, commiss

are only those

parallel proces

er for another y

hich goes. So

n between mer

oncern basis?

ing the immedi

could just come

good for us?

SA Laboratorie

cast which we

re in the range

apacity utilizat

ke TGA and F

o if they come i

tory markets ar


caller was the e

current level

ioning of the f

hich are utilize

or first merger

ear?

merger and de

er and demerg

hen we met so

te potential of t

again on that?

s. So we will

ave on plate rig

of 20 to 25% y

ion improves. S

MI-QS and th

n the running c

remunerative

imited2016

xisting

f 65%

cilities

d 65%,

which

merger

er, it is

etime

he API

lso, if

aintain

ht now

ear-on-

o what

ere are

lendar

arkets


8/17

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Pravin Ag

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

ar:

lekar:

ar:

lekar:

ar:

awal:

ar:

lekar:

ar:

lekar:

ar:

but the volu

beyond that.

At the base c

it organic or i

Whatever we

customers.

On the amou

amount of c

deleverage in

deleverage?

For the mom

will try to mi

way of back

profit we gen

years. Autom

get some goo

new investors

So Pravin, ou

term and wor

Rs.81 crores i

Where do yo

Business will

as such. Infa

working capit

is decreased i

So given that

In the present

business gro

So given that

where do you

Page

es are not that

se 20% revenu

s that somethin

speak about is t

nt of debt, is t

sh flow that

to significantly

ent, we will be

imize our expe

ard integration

erated behind p

atically you wil

d opportunity w

.

r total borrowin

ing capital?

s the long term

see this going

also increase,

t, you know, h

al has not incre

fact because b

we do not have

scenario whate

th also.

you have your

see that closing

7 of 16

ig. So may be

growth rate wh

will have to go

horoughly guid

ere any delev

e generate jus

. So any plans

doing it organi

nses, we will tr

as well as by t

er kg of the pr

l see that the d

e may think of

gs today are ab

nd Rs.26 crore

ay March 2017

o. So proportio

ere the increme

sed. So on a pr

usiness is growi

additional work

ver working ca

drawdowns an

towards the en

Om

or 2.5% may

ich you just sp

out to market a

ed either by the

raging plans t

t from LASA,

to deleverage

ally from inter

y to maximize

he way of cata

duct. So that

ebts are signific

doing it by a di

out Rs.107 cror

s is the short ter

, March 2018?

nately your wor

ntation in busi

o-data basis yo

ng with the sam

ing capital requ

pital is there it

d you have yo

of say March

ar Speciality

e the increase i

ke about, is that

nd then earn for

order book or c

at we have be

it might be a

and what wou

nal accruals wh

ur sales as well

lytic processes

ill itself take c

antly reduced.

fferent way als

es. Could you b

m.

king capital wil

ess is a fair ju

may consider t

e working capit

irements as well

is sufficient to t

ur EMIs on for

017 and 2018?


n the margins,

into the order

ourselves?

oncrete intent fr

ause clearly fr

long time bef

ld be the viab

atever we gene

as our margins

nd bring up th

re within next

n between if at

like bringing i

reak that up int

l also remain th

tification even

hat the working

al.

as zero CAPE

ake care of the

your long-term

imited2016

othing

ook, is

om the

m the

re we

ility to

ate we

by the

e gross

2 to 3-

all we

some

long-

e same

though

capital

?

further

debts,


9/17

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Moderator

Atul Bhan

Omkar He

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

:

adia:

lekar:

Our long ter

December 20

very good cas

What will be

That is what I

Very briefly c

As API per

published by

many product

products whi

practically m

competitors a

it. We do no

competition b

different than

What are you

Its around 22

What would

It will be al

research-driv

artR&D wher

company and

which we are

less.

Thank you.

Managers. Pl

Rs.4,500 cror

Global marke

Page

debts are getti

16, so many of

h flow.

the demerger ti

said; it will be

an you touch u

se the market

Religare over t

s. Out of the to

ch are availabl

onopolizing as

re concerned in

t foresee any

ecause the proc

those people ar

tax rates on bo

blended tax

e for LASA po

ost same beca

n, mostly all th

e we every yea

in that return

doing. So that i

The next quest

ase go ahead.

es market is onl

ts.

8 of 16

g to an end, so

our long term

elines be?

round say 8-to-

on API market

ize is Rs.4500

is. So that is t

tal Veterinary p

in Veterinary

well as we are

India, our imm

ig competition

esses which we

e working. We

th LSL and OS

e are paying.

t demerger?

se we are a re

e process are ca

r do expense o

e are getting 2

s enabling us to

ion is from t

India or globa

Om

our cash flow w

ebts are gettin

10-months.

size and your c

crores. You c

e size of the V

roducts we ma

products. The

the world lea

diate biggest c

as such in Ve

follow and the

re not facing ki

?

search oriented

talytic which a

nearly 1-1.5%

0% tax benefit

save upon tax.

e line of Atul

l markets?

ar Speciality

ill significantly

exhausted, so

mpetitors?

an readily refer

eterinary marke

be just doing

e are 2 or 3-p

ers in those p

mpetitor is Seq

terinary APIs.

kind of markets

nd of a tough co

company and

e patented also

of the total rev

over the parent

So in absolute t

Bhangadia fr


increase after ty

we will be sitti

to a report w

t. In fact, there

round say 20

roducts where

oducts. As far

uent Scientific.

I may not see

we are into are

mpetition as su

ll of our produ

and we have a

enue generated

company for th

rms our tax out

m Lucky Inv

imited2016

pically

g on a

hich is

are lot

of the

we are

as the

That is

it as a

totally

h.

cts are

state of

by the

e R&D

flow is

stment


10/17

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

Since you sai

CAPEX woul

Almost negli

Which is wh

profits will…

That is what

What is the m

It is around R

Against close

Perfectly righ

So you can al

More or less

That you hop

More or less

Any intention

Definitely, w

Veterinary o

growth prom

vitamins also

evident withi

All these are

Perfectly righ

So does it m

approximatel

Sort of.

Page

d that you are

d be very mini

ible.

you are referr

?

e are foreseein

aximum turnov

s.500 crores of t

to Rs.125-130

t sir.

ost do a turno

ir.

to achieve in t

ir.

of getting into

e will be growi

ly, we will no

ters to increase

. So these are t

the next 2-yea

art of that Rs.4

t, sir.

an that at full

?

9 of 16

at 30% capacit

al?

ing that organic

.

er you can gene

otal top line we

rores?

er of 4x from t

e next 3-4-year

some other seg

g into other se

t diversify into

the weight of th

e new segment

s.

,500 crores mar

apacity it will

Om

now in LAS

ally you should

ate from the ex

can generate o

e current size

s?

ents or you wil

gments of Vete

any humans or

e cattle as well

s which we are

et?

be like 10% m

ar Speciality

. Which mean

be able to rep

isting LASA fac

t of this.

ithout major C

l continue to foc

rinary only, but

anything, we

as we are planni

planning to en

rket share glob


that next 3-ye

y debt because

ility?

PEX?

us…?

we will be foc

are planning fo

ng for some vet

eavor into and

ally and Rs.500

imited2016

ars the

all the

used to

r some

erinary

will be

crores


11/17

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

Atul Bhan

Omkar He

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

adia:

lekar:

Who is global

The largest p

division is th

Orfa is there,

They would a

No, not really

Then at that p

Yes, definitel

than them, I

petrochemica

also. For the

are also plann

But what is th

R&D or on C

Not at all, in

skill sets bec

by doing so

Formulations.

You mention

R&D. So, wh

We are usual

revenue was

year approxi

This is the tre

you may…?

Not unnecess

only the sala

R&D also do

Page 1

ly the largest pl

layers you may

re, then there i

then DSM Nutr

ll be in the rang

, they are in the

oint of time you

y, after next 2-

am not boast

level, we will

oment we are

ing to come up

e skill set requi

APEX?

fact, Formulati

use making For

e chemical rea

In Formulation

ed that your ta

at is type of R&

ly spending ab

around say Rs.

ately, that is w

nd you will sust

arily to spend

ies and little o

s not make sen

0 of 16

ayer in this Rs.

say there are

s a company ca

itional Products.

e of $100 millio

range of say Rs

are among one

ears we will b

ing, but becau

be much-much

doing only API

with Formulatio

ed for that? Sec

ns does not req

mulations is ju

ctions over the

s, we do not for

rates will be

D spend you en

ut 1 to 1.5% o

00 crores, so a

at we do.

ain or because

ore on R&D. I

f instrumentatio

e as long as the

Om

,500 crores mar

ovartis Veteri

lled as Merck,

.

n or some of th

.400 to 500 cror

of the largest pl

e one of the lar

se of our im

better than the

s, but going ahe

ns division in

ondly, will we

uire heavy CA

t changing of f

e. So there is

esee any big hu

lower because

visage in next 2

f our total reve

round Rs.3 cror

ou want to no

t is very logical

n here and the

product develo

ar Speciality

ket?

ary division is

then Tetragon,

m are even larg

es in rupee ter

ayers globally?

gest players, in

ense backward

and then they

ad may be in th

eterinary.

equire any heav

EX, neither it r

rm while maki

a lot of differe

dles as such.

you will be co

-3-years as a pe

nues on R&D.

es we would h

grow faster in

because the co

e. Unnecessaril

ment purpose i


there, Axo Vet

Nutrition is ther

er than that?

s.

fact, we will b

integration fr

are into Form

e immediate fut

y investments e

equires any big

g API is a tedi

ce between A

tinuously inve

centage?

So say if last y

ve spent on R

the Veterinary d

st of R&D we i

y spending mo

s fortified.

imited2016

erinary

e, then

better

m the

lations

ure we

ither in

sort of

us job

Is and

ting in

ear my

D last

ivision

ncur is

e over


12/17

Moderator

Deepak Po

Omkar He

Deepak Po

Omkar He

Deepak Po

Omkar He

Deepak Po

Omkar He

Deepak Po

Omkar He

Deepak Po

Omkar He

:

dar:

lekar:

dar:

lekar:

dar:

lekar:

dar:

lekar:

dar:

lekar:

dar:

lekar:

Thank you. T

ahead.

You mention

to 20% of th

crores?

With the curr

Majorly the

revenue targe

We are planni

So basically

because the C

Yes, we are

market, that i

plus some gro

You also men

business. So

crores, what

to Rs.25-30 c

For a compan

around say if

working capit

So 20% close

Perfectly righ

you should al

From the ma

Omkar or wh

Since the pro

will be focusi

some Novel

Page 1

he next questio

d that the Vete

e current produ

nt products, ou

CAPEX is ove

t that we…?

ng to capture ar

in this market

APEX majorly

lanning to capt

s around Rs.30

wth promoters

tioned that curr

I just wanted to

ind of working

ores?

y like LASA I t

at all my busin

al needs are con

to about 2.5-m

t, actually i

ways keep a littl

agement persp

re we as mana

oters will be t

ng and nurturin

Speciality Che

1 of 16

is from the lin

inary API is cl

cts, right, so o

market size wi

all done. So a

ound Rs.500 cr

e are plying t

we have already

ure not 50% but

crores plus a

e are introduci

ent working cap

understand wh

capital you mi

hink so 20% of

ess goes to arou

cerned.

nths kind of?

f we were to se

e of cushion for

ctive, which w

ement would b

e same, the sh

both the entiti

icals products

Om

e of Deepak Po

se to Rs.4,500

r market size

ll be Rs.900 to

re we trying to

res within 2.5-

cater to abou

done, right?

t around say 30

ditionally som

ng, so those wil

ital that we are

en we reach th

ht be requiring

the total top lin

nd Rs.500 cror

the working c

that.

uld be the key

focusing?

reholding will

es equally; so in

which are us

ar Speciality

ddar from Sapp

crores market si

ould be close

1,000 crores, yo

capture about

-years.

t 50% of this

to 35% of the

from Vitamin-

l also contribute

kind of having i

e peak level ma

because curren

e should be the

es, Rs.100 crore

pital cycle, it i

focus area for

be the same wit

Omkar Special

d for different


hire Capital. Pl

ze and we are c

to about Rs.90

are perfectly r

Rs.500 crores

s.1,000 crores

urrent Rs.1,000

C we are intro

to that Rs.500

s sufficient to g

ybe about Rs.4

tly we have onl

working capital

s is sufficient a

typically 45-da

s among the L

the promoters

ity we are plann

segments acro

imited2016

ase go

atering

-1,000

ight.

of this

market

crores

ducing

rores.

ow the

00-500

y close

, that is

s far as

ys, but

SA or

, so we

ing for

ss like


13/17

Deepak Po

Pravin Ag

Moderator

Nikhil Sha

Omkar He

Nikhil Sha

Omkar He

Nikhil Sha

Omkar He

Nikhil Sha

Omkar He

Nikhil Sha

Omkar He

dar:

awal:

:

:

lekar:

:

lekar:

:

lekar:

:

lekar:

:

lekar:

starting from

auxiliary, ma

LASA will be

In terms of sh

rationale for t

This LASA

investment th

Omkar Speci

Thank you. T

go ahead.

Sir, I suggest

targeting alm

right?

Correct.

So basically i

Veterinary A

rate in API

LASA is to ta

So basically l

as of now for

You are right.

For OSCL, w

You can reac

manufacturin

available else

So the turnov

Yes please.

Page 1

Optical Photoc

y more. So tha

catering the A

areholding patt

hat or is there a

and other sub

ey have put in

lity Chemicals

he next questio

ed like the API

st Rs.500 cror

next 3-years a

I market by its

arket for Veteri

ke the market s

ike in this Rs.4,

the next 3-year

ith 100% capaci

up to say Rs.5

wherein we w

where.

er that we can e

2 of 16

onductors like

t will be cateri

I segment. So

rn of LASA, I

y particular rea

idiary are 10

initially in the

will hold 10% s

is from the lin

market currentl

s of turnover i

e we expecting

lf is growing n

nary, but we ca

are not to depe

500 crores mar

, right?

ty utilization, w

0 crores. In O

ill not incur an

pect to touch is

Om

hat you call

g particularly t

e will be focus

otice that Omk

son for that?

% owned by

se subsidiaries

ares of the LA

e of Nikhil Sha

y we are seeing

the next 3-yea

the API market

t very fast, ma

n very well tak

d on the marke

et share we are

hat kind of turn

CL we have pl

CAPEX but th

almost around

ar Speciality

ater Treatment

he Speciality C

ing on both the

r has about 10

Omkar Special

to compensate

SA Supergeneri

h from NVS W

it around Rs.4,

rs for the LAS

to also to grow

be around say

e over the share

t growth.

targeting almos

ver we can rea

ns to go in for s

en we can take

Rs.500 crores f


at pharma and

emicals segme

erticals.

, right. So, wh

ity. So whate

those investme

s.

ealth Managers.

500 crores and

segment for t

as such like in

9 to 12% is the

, the total obje

t around Rs.500

h, sir?

ome lease facili

benefit of the f

r Omkar Specia

imited2016

textile

ts and

t is the

er the

nts the

Please

we are

e API,

?

growth

tive of

crores

ties for

cilities

lity?


14/17

Nikhil Sha

Omkar He

Moderator

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

:

lekar:

:

ar:

lekar:

ar:

lekar:

ar:

For LASA al

Yes, of cours

Thank you. T

When you ha

will it pan ou

formulators c

backward int

Basically in t

the dairy far

are having th

Novartis vete

division, Orfa

their own for

APIs as such;

well as in La

have a very-v

am talking ab

model. So as

in Veterinary

from the petr

backward int

from UDCT

know how to

time cycles f

gross profit w

we are.

So you will b

Cost and effi

approvals als

are having E

in, those mar

turn into mor

So, is it like

product level

Page 1

o, we are expec

.

e next questio

d mentioned th

t – I assume th

ould be backw

grated?

e Veterinary m

s basically who

eir own veterin

inary division,

, many compan

ulations and t

the third is the

tin America als

ery diversified

out a single pro

our question w

segment you

chemical level.

gration. Secon

nd my basic to

fabricate a catal

r the reaction.

hich we enjoy p

sically be a cos

ciency leader i

like FAMI-Q

QM which is r

ets will also op

turnover also.

the Human A

approval also?

3 of 16

ting a turnover

is from the line

t we will targe

t you will be s

ard integrated

arket the marke

are the milk pr

ry divisions li

Merck veterinar

ies like that, th

ese people buy

Poultry and A

. So these are

lientele. For a s

uct. So it is ver

as that “How w

ill hardly find

. So we proclai

ly, our process

ic of the resear

yst for making

So basically o

ractically nobo

t and efficiency

just one aspec

, TGA. Two a

equired by Euro

en up and we w

Is also, in the

Om

f almost Rs.50

of Baidik Sark

t to take the m

upplying the A

also. So there

t is basically a t

oducing farms;

e I just said in

y division, Gla

y are basically

out all the API

uaculture whic

the basically m

ingle product w

y-very diversifi

uld be the gro

any company

ourselves as t

es are catalytic

ch was Develop

reaction faster

r products are

y will be able t

leader. So busi

t of it. Second

provals we are

pe. So once thi

ill be getting m

sense that ther

ar Speciality

crores in the n

ar from Unifi C

rket share fro

Is to the formu

are enough for

hree-tier market

the second tier i

my previous ta

o veterinary di

the MNCs com

s basically, they

h is big market

arkets. The best

e are nothing le

ed, it is custome

th coming?” N

ho is doing ful

he only compan

processes, I a

ment of Novel

to generate mo

very-very effici

o harvest that. S

ess will autom

y, we are comi

having; we are

s TGA as well a

re volume fro

is a facility a


ext 3-years?

pital. Please go

our competito

lators and some

mulators who

-- the first tier i

s of all the MN

lk that compan

ision, DSM vet

panies who are

do not prefer t

in our country

part in this is t

ss than 300 clie

r independent b

w coming to th

l backward inte

y which are do

basically a do

Catalyst. So I b

e yields, to ens

ent you may s

o that is how co

tically come to

ng up with reg

having cGMP

s FAMI-QS wil

over there whi

proval and the

imited2016

ahead.

s, how

of the

re not

s of all

s who

ies like

erinary

having

make

also as

hat we

ts…. I

usiness

e point

gration

ing full

ctorate

sically

re less

y. The

nfident

you?

ulatory

lus we

l come

ch will

re is a


15/17

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Omkar He

Baidik Sar

Pravin He

Baidik Sar

Pravin He

Baidik Sar

Pravin Ag

Baidik Sar

Pravin Ag

Moderator

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

lekar:

ar:

awal:

ar:

awal:

:

Perfect, there

Facility appro

This informat

with Glaxo is

gives me ord

am awaiting,

TGA I will b

So are you a

This year we

April end, but

may be postp

more markets

In Omkar, all

cost fluctuati

Orders are B

So 16-18%

currency vola

Based on the

So the margi

A book-keep

disclosure, R

We cannot s

published wit

I was just che

We can expec

Thank you. T

Please go ahe

Page 1

is a facility app

val we have obt

ion I am alread

now due. So y

rs. So my facil

not product app

able to explore

aiting the inspe

will be expectin

somehow the r

ned by a few

also.

your price con

ns and currenc

ooked on spot

argins reflect t

tility?

actual costing

s I do not see a

ing question;

.107 crores is y

are that numb

the stock exch

cking when you

t it to have som

he next questio

ad.

4 of 16

oval plus there

ained and we ar

y supplying to

u can understa

ity is definitely

rovals, product

it more.

ctions any time

g inspections,

egulatory autho

onths here and

tracts with your

fluctuations al

asis. So there is

e steady state

f raw material

y reason why t

hat is the clo

ur total borrow

er right now b

ange.

r Q4 numbers

ewhere mid-Ma

n is from the li

Om

is a product lev

e waiting for pr

Novartis, I am

d that a compa

a regulatory ap

approvals are d

this year?

e were expecti

ities are tied up

there, but as so

customers, are

o?

nothing like an

argins taking i

n cost plus ba

ey should not b

ing debt of L

ings as of Septe

ecause that ne

ight be expecte

y.

e of Jayesh Ga

ar Speciality

el approval.

oduct or we are

already supplyi

ny like Novartis

roved facility.

one only once I

g actually insp

and busy with

n as it gets, we

you able to pa

y long-term con

to account of a

is, we are supp

e maintained.

SA as of 31st

mber end.

d to be get a

d?

ndhi from Hars


awaiting both?

g to Merck, m

audits my facil

Regulatory appr

get the certific

ctions in the m

ome other agen

will be able to

s through the

tract.

ll the raw mater

ying to the cus

March? As p

dited and nee

had Gandhi Sec

imited2016

y audit

ity and

ovals I

tion of

onth of

da so it

xplore

aterial

ial and

tomers.

r your

to be

urities.


16/17

Jayesh Ga

Pravin Ag

Moderator

Kushal Ru

Omkar He

Kushal Ru

Omkar He

Kushal Ru

Omkar He

Kushal Ru

Omkar He

Kushal Ru

Omkar He

Kushal Ru

Omkar He

dhi:

awal:

:

hani:

lekar:

hani:

lekar:

hani:

lekar:

hani:

lekar:

hani:

lekar:

hani:

lekar:

Can you qua

multiplicity o

costs. Can yo

Today, we ha

As far as the

for all the u

administrativ

come down d

Thank you. T

As you expla

Agents, Orga

Correct.

LSL will be h

No, only Vet

So like Unit 5

Perfectly righ

very long bac

was also told

before and th

Vitamins and

Perfectly righ

OSCL is into

and…?

Not necessari

Agents.

Almost 70% t

We used to h

Page 1

tify the synerg

f legal and reg

u quantify the a

ve OSCL as th

egulatory aspec

nits. Going fo

cost for maint

astically. It wil

e next questio

ined in the earl

ic and Inorgani

aving Veterinar

rinary API.

which is transf

t, it was propo

k and we have a

in the last conc

n supplying to

these all will be

t.

Iodines right a

ly only in Iodi

urnover will be

ve something li

5 of 16

in terms of c

latory complia

ount?

e parent compa

t is concerned,

ward, we hav

ining separate

be 2-3% on ad

is from the line

ier remarks lik

c, right?

y APIs plus Pha

erred to LASA,

ed to be Phar

lready conclud

ll, we will be

ll the Veterinar

only pertaining

nd Selenium an

ne, there are

from that only,

ke 70% revenue

Om

st savings? Yo

nces, eliminatio

y and four sub

we have to com

only two un

books of accou

inistration cos

of Kushal Rug

e Omkar will b

rma Intermedia

that is into Phar

a Intermediate

d to make Vita

aking vitamins

y segments.

to Veterinary s

d all. So mainl

any segments,

right?

s coming from

ar Speciality

u said there is

n of duplicatio

sidiaries are th

ly with all the

its. So the co

ts, the audit an

t.

hani from IIFL.

e having Iodine

te?

ma Intermediat

; however, we

in C and Folic

over there whic

egment?

it will be into

like Selenium

Iodine.


ignificant redu

in the admini

re, 100% subsi

egulatory comp

pliance cost a

d everything, w

Please go ahead

, Selenium, Re

if I am not wro

have deferred t

Acid over there

h I had just me

Iodines, Iodine

erivatives, Re

imited2016

tion in

tration

diaries.

liances

nd the

ill also

.

solving

ng?

e plan

which

tioned

prices

solving


17/17

Kushal Ru

Omkar He

Kushal Ru

Omkar He

Kushal Ru

Pravin He

Moderator

Dhiral Sha

Omkar He

Moderator

Omkar He

Moderator

hani:

lekar:

hani:

lekar:

hani:

lekar:

:

h:

lekar:

:

lekar:

:

But I guess a

Iodine segme

This is what I

has already d

dependent on

companies an

one of the seg

Entity for OS

Yes, please, t

with respect

there is no

consistency i

Is it better to

It is very diff

top line of o

already had c

but Omkar, a

somewhere a

something lik

next….lookin

Thank you. T

I just wanted

Speciality?

Yes, it will be

Thank you. L

conference o

Thank you fo

Thank you vfor joining us

Page 1

fter restructurin

t going forwar

have been repe

iversified into a

Iodine, there

d last two years

ments. I think it

CL?

he Omkar prod

to the customer

dependence on

the business b

ssume like LS

icult to say like

ly Re.1 crore,

lose to around

s already menti

round 20-25%

e 100% every

g for long-term.

e next questio

to ask this Vita

under LASA.

adies and Gentl

er to the manag

your participat

ry much. Ladieand you may n

6 of 16

, it will be aro

because you ar

atedly saying; it

lot of other int

are many prod

we have been

will not exceed

cts are well div

s also. With re

any particular

th in LASA as

will grow faste

that, but LAS

initial growth

s.200 crores, t

oned, overall g

year on year.

year. That does

is from the line

min-C and foli

emen, as there

ement for the cl

ion. Wish you a

s and Gentlemw disconnect y

***

Om

und 65-70%. S

e now separatin

is not only Iodi

rmediates, orga

ucts which we

oing extensive

more than 50

ersified with re

spect to LASA

customer, an

well as Omkar.

r than OSCL?

just started ab

as definitely m

ere are limitati

owth for both t

If we look int

not mean that

of Dhiral Shah

acid will be u

re no further q

osing remarks.

great evening.

n, with that weour lines.

ar Speciality

my question

g both the entiti

ne, where Omk

nic as well as i

have develope

work on these p

.

spect to the nu

, there is a lot

product seg

ut 3-3.5-years

uch faster, wit

ons with respec

he companies

this, LASA h

it will continu

from GEPL Ca

nder LASA or i

uestions, I woul

hank you. Ove

conclude this


as how you wi

es right?

r will be focus

organic which

d for many in

roducts. Iodine

ber of product

f diversificatio

ent. That brin

back with the t

respect to Om

t to the growth

e will be main

as grown now

to grow at 10

ital. Please go

t will be under

d now like to h

to you, sir.

onference. Tha

imited2016

l grow

d, as it

are not

ovator

will be

, again

n, then

gs the

rnover

kar we

factors,

taining

almost

0% for

head.

Omkar

nd the

nk you

Documents

Transcript of Conference Call held on April 12, 2016 [Company Update]