DCAL - Potential C&H -Back in Profits. Buy above 215.
DCAL is forming Cup & Handle Pattern.
One can enter above 215 with target of 255/400/600/780, with Stop Loss of 171.
Here's a summary of the key points for investors from Dishman Carbogen Amcis Limited's (DCAL) presentation for Q2 FY25:
Financial Highlights
1. Revenue Growth: Net revenue for Q2 FY25 increased by 34.5% YoY to ₹7,890 million, driven by a boost in commercial sales, particularly in the CRAMS (Contract Research and Manufacturing Services) segment in Switzerland and India.
2. Profitability: EBITDA rose significantly to ₹1,485 million with a margin increase from 10.8% in Q2 FY24 to 18.8% in Q2 FY25, due to higher volumes and improved operating margins.
3. Cash Profit: Cash profit for Q2 FY25 stood at ₹1,055 million, almost doubling YoY.
4. Net Debt: The company reported a net debt of CHF 173 million as of September 2024.
5. Capex: H1 FY25 capital expenditure reached approximately USD 15.9 million.
Operational Highlights
1. Revenue Mix:
- CRAMS: Major contributor with 84% of total revenue. Sales grew 51.7% YoY, fueled by increased commercial sales.
- NCE APIs & Intermediates: 6.2% share, with a 36.9% increase in revenue due to growth at the Bavla site in India.
- Cholesterol & Vitamin D Analogues: Decline in sales by 35.7% due to lower margin realization in Cholesterol SF.
- Quats & Generics: Decline due to reduced demand in the agrochemical sector.
2. Capacity Utilization: Focused on improving capacity utilization by targeting small to mid-sized global biotech companies and expanding in new geographies.
Strategic Insights
1. Global Presence: Operations span Switzerland, the UK, France, Netherlands, India, and China, with 28 R&D labs and multi-purpose facilities.
2. Oncology Focus: Oncology, a high-growth therapeutic area, is a priority, with several late-phase oncology molecules in the pipeline.
3. HIPO Facility: The Bavla site in India houses Asia's largest high-potency API (HIPO) facility, positioning DCAL well for growth in oncology.
Industry Overview
- Specialty Medicines Growth: Specialty medicines, which include high-potency oncology drugs, are projected to grow significantly, with an expected 43% share in global pharma spending by 2028.
- Oncology Market: Oncology is projected to grow at a CAGR of 14-17% through 2028, driven by new treatments and demand for potent drugs.
Investment Considerations
2. 1. Strong Revenue and Margin Growth: Consistent revenue growth with enhanced EBITDA margins, indicating improved operational efficiency.
2. Global Expansion & Diversification: Expanding into new geographies and targeting small/mid-size biotech clients mitigates risk and enhances revenue stability.
3. Oncology Focus and HIPO Facility: The HIPO capabilities in India align with the high-growth oncology sector, suggesting long-term growth potential in specialty pharma.
One can enter above 215 with target of 255/400/600/780, with Stop Loss of 171.
Here's a summary of the key points for investors from Dishman Carbogen Amcis Limited's (DCAL) presentation for Q2 FY25:
Financial Highlights
1. Revenue Growth: Net revenue for Q2 FY25 increased by 34.5% YoY to ₹7,890 million, driven by a boost in commercial sales, particularly in the CRAMS (Contract Research and Manufacturing Services) segment in Switzerland and India.
2. Profitability: EBITDA rose significantly to ₹1,485 million with a margin increase from 10.8% in Q2 FY24 to 18.8% in Q2 FY25, due to higher volumes and improved operating margins.
3. Cash Profit: Cash profit for Q2 FY25 stood at ₹1,055 million, almost doubling YoY.
4. Net Debt: The company reported a net debt of CHF 173 million as of September 2024.
5. Capex: H1 FY25 capital expenditure reached approximately USD 15.9 million.
Operational Highlights
1. Revenue Mix:
- CRAMS: Major contributor with 84% of total revenue. Sales grew 51.7% YoY, fueled by increased commercial sales.
- NCE APIs & Intermediates: 6.2% share, with a 36.9% increase in revenue due to growth at the Bavla site in India.
- Cholesterol & Vitamin D Analogues: Decline in sales by 35.7% due to lower margin realization in Cholesterol SF.
- Quats & Generics: Decline due to reduced demand in the agrochemical sector.
2. Capacity Utilization: Focused on improving capacity utilization by targeting small to mid-sized global biotech companies and expanding in new geographies.
Strategic Insights
1. Global Presence: Operations span Switzerland, the UK, France, Netherlands, India, and China, with 28 R&D labs and multi-purpose facilities.
2. Oncology Focus: Oncology, a high-growth therapeutic area, is a priority, with several late-phase oncology molecules in the pipeline.
3. HIPO Facility: The Bavla site in India houses Asia's largest high-potency API (HIPO) facility, positioning DCAL well for growth in oncology.
Industry Overview
- Specialty Medicines Growth: Specialty medicines, which include high-potency oncology drugs, are projected to grow significantly, with an expected 43% share in global pharma spending by 2028.
- Oncology Market: Oncology is projected to grow at a CAGR of 14-17% through 2028, driven by new treatments and demand for potent drugs.
Investment Considerations
2. 1. Strong Revenue and Margin Growth: Consistent revenue growth with enhanced EBITDA margins, indicating improved operational efficiency.
2. Global Expansion & Diversification: Expanding into new geographies and targeting small/mid-size biotech clients mitigates risk and enhances revenue stability.
3. Oncology Focus and HIPO Facility: The HIPO capabilities in India align with the high-growth oncology sector, suggesting long-term growth potential in specialty pharma.
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