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Medicamen Biotech Limited - The next big oncology bet in making?
Medicamen is into formulations business & currently caters to the anti-biotic/anti-bacterial space with majority revenue coming from exports.
They currently have over 200 products registered across 35 countries.
Medicamen is into formulations business & currently caters to the anti-biotic/anti-bacterial space with majority revenue coming from exports.
They currently have over 200 products registered across 35 countries.
Company Profile
The company develops and markets wide range of branded and generics formulations. They primarily manufactures tablets, capsules, liquid syrup, dry syrup. They have marked their presence across 35 Countries including America, Africa, Latin America, Brazil & Asia.
The company develops and markets wide range of branded and generics formulations. They primarily manufactures tablets, capsules, liquid syrup, dry syrup. They have marked their presence across 35 Countries including America, Africa, Latin America, Brazil & Asia.
Financials (Last five years)
SALES
2016 : 67 crs
2017 : 82 crs
2018 : 112 crs
2019 : 123 crs
2020 : 117 crs
PAT
2016 : 0 crs
2017 : 5 crs
2018 : 10 crs
2019 : 12 crs
2020 : 12 crs
Last 5 years compounded profit growth around 95% & expected to grow 40% CAGR for next 5 years.
SALES
2016 : 67 crs
2017 : 82 crs
2018 : 112 crs
2019 : 123 crs
2020 : 117 crs
PAT
2016 : 0 crs
2017 : 5 crs
2018 : 10 crs
2019 : 12 crs
2020 : 12 crs
Last 5 years compounded profit growth around 95% & expected to grow 40% CAGR for next 5 years.
Contd.
New promoter came & joined around 2016 & completely stopped it's old government tender business & focussed on exports. So actually it's not that sales increased from 67crs to 125crs in last 5 yrs but post takeover sales got scaled up from almost nothing to 125crs in 2020.
New promoter came & joined around 2016 & completely stopped it's old government tender business & focussed on exports. So actually it's not that sales increased from 67crs to 125crs in last 5 yrs but post takeover sales got scaled up from almost nothing to 125crs in 2020.
Promoter's Background
Rahul Bishnoi Ji( @bishnoi13), is having 26 years of rich experience in managing agrochemical, bulk drug & pharma formulations plants
Earlier, he had taken over Shivalik Rasayan in 2000 when it was in distress & have successfully turned it around over time.
Rahul Bishnoi Ji( @bishnoi13), is having 26 years of rich experience in managing agrochemical, bulk drug & pharma formulations plants
Earlier, he had taken over Shivalik Rasayan in 2000 when it was in distress & have successfully turned it around over time.
Manufacturing Units
Currently, the company has two manufacturing facilities, located at Bhiwadi and Haridwar. The upcoming oncology formulations plant is their 3rd facility at Haridwar which is almost completed and expected to contribute to the revenues in the next few months.
Currently, the company has two manufacturing facilities, located at Bhiwadi and Haridwar. The upcoming oncology formulations plant is their 3rd facility at Haridwar which is almost completed and expected to contribute to the revenues in the next few months.
Oncology Industry Update
Oncology market size was valued at $136B in 2019 & is poised to witness a CAGR of 11.9% during period 2020-2025. The segment is expected to witness a massive rise in valuation owing to the mounting number of cancer cases diagnosed every year globally.
Oncology market size was valued at $136B in 2019 & is poised to witness a CAGR of 11.9% during period 2020-2025. The segment is expected to witness a massive rise in valuation owing to the mounting number of cancer cases diagnosed every year globally.
Focus Area
The company is currently focusing on product registration in new countries across both, Latin America and ROW.
Also, focusing on private generics and branded market for margins enhancement.
The company is currently focusing on product registration in new countries across both, Latin America and ROW.
Also, focusing on private generics and branded market for margins enhancement.
OPAL acquisition
During the year, the company also acquired an Australian Pharma company, OPAL pharma. This acquisition will enable them to further extend products and broaden reach across international market.
During the year, the company also acquired an Australian Pharma company, OPAL pharma. This acquisition will enable them to further extend products and broaden reach across international market.
Capital allocation
The management seems to understand the importance of capital allocation. They acquired OPAL Pharma for 1.5crs in Sept 19.
Opal did sales of 8crs & PBT of 1.5crs in March quarter itself. So what they acquired for 1.5 crs,they got paid back in just one quarter
The management seems to understand the importance of capital allocation. They acquired OPAL Pharma for 1.5crs in Sept 19.
Opal did sales of 8crs & PBT of 1.5crs in March quarter itself. So what they acquired for 1.5 crs,they got paid back in just one quarter
New Development
The company has set up a new massive Iron Folic Acid plant unit. The capacity for the iron folic tablets could be as high as 100+ crs annually. The margins are also as high as 35-40%. These are the freebies which UN and WHO distributes to weaker nations.
The company has set up a new massive Iron Folic Acid plant unit. The capacity for the iron folic tablets could be as high as 100+ crs annually. The margins are also as high as 35-40%. These are the freebies which UN and WHO distributes to weaker nations.
Backward Integration
The company is being baked by it's Parent Shivalik Rasayan which hold around 45% stake in it.
Also, they have got the backward integration advantage with Shivalik Rasayan which minimize the Chinese API Import risk.
The company is being baked by it's Parent Shivalik Rasayan which hold around 45% stake in it.
Also, they have got the backward integration advantage with Shivalik Rasayan which minimize the Chinese API Import risk.
Mission Pharma's Support
Mission Pharma, a Toyota Group company, owns around 13% stake and contributes 40 crores to company's revenue.
Currently, Mission Pharma outsources inputs worth 800 crs from India & with time expects to outsource substantial part of it through Medicamen
Mission Pharma, a Toyota Group company, owns around 13% stake and contributes 40 crores to company's revenue.
Currently, Mission Pharma outsources inputs worth 800 crs from India & with time expects to outsource substantial part of it through Medicamen
Top Management Talents
The company has hired top management talents from behemoths like Dr Reddy, Akme Formulations, Shilpa Medicare & Alkem. It is easy assumption that these bigtime experienced folks can only join a tiny co with 100crs sales sensing the bigger story & potential
The company has hired top management talents from behemoths like Dr Reddy, Akme Formulations, Shilpa Medicare & Alkem. It is easy assumption that these bigtime experienced folks can only join a tiny co with 100crs sales sensing the bigger story & potential
Key Team Members
Dr. Vimal Shrawat - He is a very well known name in the Industry. He was COO of Shilpa Medicare, & has more than 30 years of experience.
Rajesh Madan - He is the CEO & a gold medalist from Delhi University who has been with Medicamen Biotech since inception.
Dr. Vimal Shrawat - He is a very well known name in the Industry. He was COO of Shilpa Medicare, & has more than 30 years of experience.
Rajesh Madan - He is the CEO & a gold medalist from Delhi University who has been with Medicamen Biotech since inception.
Annual Report Update
The Company is optimistic that its Bhiwadi Plant shall be approved by UNICEF during 2020-21. We are planning to mfg 20 products of which 5 are top global Oncology drugs.The beginning of Oncology Plant shall have its first opportunity to enter in EU & US mkt.
The Company is optimistic that its Bhiwadi Plant shall be approved by UNICEF during 2020-21. We are planning to mfg 20 products of which 5 are top global Oncology drugs.The beginning of Oncology Plant shall have its first opportunity to enter in EU & US mkt.
The Unicef opportunity
Unicef approval to Medicamen facilities is expected anytime.
Once Unicef Approval is through, there is an opportunity to supply significant value of products over the coming years.
Unicef approval to Medicamen facilities is expected anytime.
Once Unicef Approval is through, there is an opportunity to supply significant value of products over the coming years.
Conclusion
Overall the company has got a Very dynamic promoter who knows his stuff and is thinking two steps ahead in terms of setting the company up for the next leg of growth. I expect this to grow at 40% CAGR for next 5 years & it’s a play on Rahul Bishnoi ji's capabilities.
Overall the company has got a Very dynamic promoter who knows his stuff and is thinking two steps ahead in terms of setting the company up for the next leg of growth. I expect this to grow at 40% CAGR for next 5 years & it’s a play on Rahul Bishnoi ji's capabilities.
*Error
2020 sales is 125 crs (Consolidated)
2020 sales is 125 crs (Consolidated)
