Corporate Presentation

Transcription

1 Corporate Presentation September Sakar Healthcare Limited. All Rights Reserved

2 Disclaimer This Investor Presentation has been prepared by Pantomath Capital Advisors Limited in consultation with Sakar Healthcare Limited (SHL) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not be deemed to constitute an offer. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements, including those relating to the general business plans and strategy of SHL, its future financial condition and growth prospects, future developments in its industry and its competitive and regulatory environment, and statements which contain words or phrases such as will, expected to, horizons of growth, strong growth prospects, etc., or similar expressions or variations of such expressions. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. Further, no representation or warranty expressed or implied is made nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information. Also, no representation or warranty, express or implied, is made that such information remains unchanged in any respect as of any date or dates after those stated herein with respect to matters concerning any statement made in this Investor Presentation. SHL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of SHL. This presentation is strictly confidential. The earlier versions of this presentation, were in draft form, and should not be circulated or referred to by any person.

3 Table of Contents Company Overview 4 Operational Strengths 9 Financials 17 Strategic Outlook & Investment Rationale 21 Offer Details and Investment Rationale 24

4 Company Overview

5 Highlights Business Highlights Pharmaceutical Company engaged in the manufacturing of diverse range of oral liquids, liquid injections, dry powder injections and lyophilized injections Emerging presence in International Markets Four state of the art manufacturing facilities approved by BVQI, WHO, GMP, CGMP & multiple National Drug Authorities Initiated the process of EU GMP Certification anti- Presence in leading therapies like antibiotics, analgesics, histamines, anthelmintic & antimalarial drugs Marquee clients including Cadila Healthcare, Merck, Cadila Pharma, USV, Torrent, Intas & Claris % Products Registered Countries of Presence Dossiers filed Customers 4 years revenue CAGR Business Mix FY16 Geography Split Sales and EBITDA margins Contract Direct Sales-Domestic Export 1 Africa, 2% 7% 14% 60% 55% 58% 32% 46% India, 71% 15 % Asia, 12 % 4,123 3,503 2,969 2,191 34% 27% 22% 20% 38% 37% 28% 22% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16

6 Evolution of Sakar Company incorporated as Sakar Healthcare Pvt. Ltd Received ISO Certification Started commercial production for Plant-1 for Liquid Orals Commencement of commercial sale of the products Commencement of exports of the products Started commercial production of Plant 2 for Beta Lactum Tablet and Capsules and Dry Syrup / Sachet Started commercial production for Plant 3 for Liquid Injectables Ampoules and Vials Conversion to Public Limited Company Started commercial production for Plant 4 for Dry Powder Injection Foray towards increasing direct international presence

7 Promoters Mr Sanjay Shah Managing Director Mr Aarsh Shah Jt Managing Director Mrs Rita Shah Director He holds a degree of Master of Business Administration from Vikram University, Ujjain, Madhya Pradesh. Apart from that, he is also qualified in plastic technology. More than a decade of experience in pharmaceutical, mineralwater and plastic industry. Prior to Sakar, he promoted Bisil Plast Ltd., the bottler of mineral water since He is presently instrumental in managing the entire affairs and functioning of our Company including production, sales, marketing and finance. He is a Pharmacist and holds a degree of Master of Business Administration from University of Cardiff, UK. He currently lends his professional acumen as a Pharmacist in the company and is actively involved in production, sales & marketing and developing business relations for our company She has been a Promoter Director of our Company since its inception. She is a science graduate from Gujarat University and an experienced business woman. She manages the day to day administrative operations of the Company. She also assists in procurement of materials, production and controlling of quality products.

8 Organization Chart Board of Directors Managing Director Jt. Managing Director Head Quality Assurance General Manager Human Resources Chief Financial Officer Executive Director International Sales Vice President (Strategic & Business Development) Gen Manager (Operations) Gen Manager (Technical) Deputy Gen Manager Quality Assurance Manager Regulatory Affairs Manager Human Resources Senior Manager Accounts Company Secretary Manager Marketing

9 Operational Strengths

10 Product Range Current portfolio of 123 product registrations(28 in pipeline) comprises mainly of 58 antibiotics, 10 analgesics, 6 anti-histamines, 5 anthelmintic and 5 anti Malarial drugs Future growth of business to be driven by registration of new products in the international markets

11 Manufacturing Facilities 4 Manufacturing facilities Approvals in place from regulatory authorities such as BVQI, WHO, GMP, CGMP and Various National Drug Authority Spread across total area of 10,022 sq mts with four units having different product manufacturing capabilities and process. The facilities have four production units which manufacture a wide range of pharmaceutical products. Production at the plant is ISO 9001 certified. Each of the facilities is designed, equipped and operated to deliver high quality products within defined cost and delivery schedules

12 Manufacturing Facilities Plant - 1 Dedicated plant for Oral Liquid Product Manufacturing process in line with International Standards in a controlled air environment under strict hygienic conditions, on Fully Automatic Line. Efforts are made to secure a no contamination in order to achieve high standard of quality of the products. Production process suitable for both pet and glass bottles. Plant - 2 Dedicated facility as per the norms of WHO, GMP & MHRA and started manufacturing Cephalosporin Oral Products. Facility with the latest technology, fully automatic operations from well known reputed Companies approved by WHO. Separate lines for man and material movement and the entire production area is covered with High Efficiency Particulate (HEPA) filters which ensures filtered (dust free) air across the plant.

13 Manufacturing Facilities Plant - 3 Installed high tech visual inspection machine which has been imported from Italy. Facility to manufacture Liquid Injectable in vials & ampoules. Installed two lines of 300 / minute in ampoule & one line of 300 / minute in vial. Facility has been designed as per the MHRA. It holds the capacity of inspecting Ampoules per hour. Plant - 4 Installed dedicated facility to manufacture Dry Powder Injectable in vials. Facility has been designed as per the MHRA. The procedure in this plant is suitable for different size for vials which provides various options to the customers. The plant has separate air conditioned storage facilities for finished goods and raw materials with humidity control also.

14 Manufacturing Facilities Facility Product manufactured Year Est. Capacity (in Lac Units) Utilization Plant 1 Liquid Orals % Plant 2 Tablet and Capsules % Dry Syrup / Sachet % Plant 3 Liquid Inject - Ampoules % Liquid Inject - Vials % Plant 4 Dry Powder Injection % Overall Utilization around 57% Plant wise Revenue Figures in INR Lacs Facility FY 16 FY 15 FY 14 FY 13 Plant Plant , , Plant , Plant Total 4, , , ,190.70

15 Global Footprint 35 distributors across 20 countries Strong presence in South East Asia, Middle East and Latin America Key Markets include Nigeria, Ethopia, France, Ghana, Uganda and other African countries. Foray into Europe as soon as the EU cgmp approval is obtained

16 Key Customers Servicing over 60 customers

17 Financial Highlights

18 Key Financial Highlights Sales EBITDA , , INR Lacs 4, INR Lacs , , Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 0 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 PAT Key Ratios INR Lacs % 15% 10% 5% 15.78% 9.29% 18.11% 18.79% 16.07% 11.92% 12.63% 12.39% 17.85% 13.57% 0 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 0% ROCE ROE Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

19 Profit and Loss Statement Y/E (INR lacs) FY12 FY13 FY14 FY15 FY 16 Sales 1, , , , Total Income 1, , , , Operating Expenses , , , Other Expenses EBITDA EBITDA Margin 43.59% 34.59% 26.48% 22.53% 20.63% Finance Cost Depreciation PBT Taxes PAT PAT Margin 6.12% 6.60% 5.90% 5.24% 5.65% Cash Accruals Cash Accruals % 17.59% 15.62% 13.04% 12.37% 12.29%

20 Key Balance Sheet items Balance Sheet Total Current Liabilities 1, , , , , Total Term Loans 2, , , , , Paid Up Capital Reserves Deferred Tax Liability Total Net Worth , , , , Total Current Assets 1, , , , , Net Block 3, , , , , Total Non Current Assets Ratios RONW 10.12% 12.86% 13.49% 12.39% 13.57% NAV CURRENT RATIO DSCR

21 Strategic Outlook & Investment Rationale

22 Our Strategic Plan Enhancing manufacturing facilities by adding new lines of manufacturing Capabilities New Products Addition of new products through advancements in manufacturing capabilities. Strengthening marketing strengths and focus on PAN India presence along with new international markets Business Scale Intellectual Wealth Add new markets by filing new dossiers for product registration Create an organization that results in value for all stakeholders

23 Investment Rationale Export Focus with Well Established Manufacturing Facilities Increase in export revenues to drive sales and profitability. Manufacturing facilities, built in accordance with WHO s cgmp guidelines. In the process of obtaining EU GMP certification. Facilities equipped with latest technology enable lower overall production costs, improve process efficiencies & produce high quality products. Diversified product portfolio Moving from contract manufacturing to direct presence in emerging and regulated markets Product registrations comprises mainly of 58 antibiotics, 10 analgesics, 6 anti- histamines, 5 anthelmintic and 5 anti Malarial drugs. Registered Products Presently has 123 product registrations in various countries. In the process of making additional 15 applications for product registration in various countries. Recurring business from existing customers Relationship with over 45 clients including leading pharma companies in India. Top 5 clients accounted for 35.20% & 42.24% of net sales year ended March 31, 2016 & for the year ended March 31, 2015, respectively. Top 5 customers have remained the same over the past 3 years. Experienced Promoters and Management Team Experienced management and employees have successfully expanded business through proper customization under guidance of Managing Director.

24 Offer Details

25 Issue Highlights Details Issuer Offer Type Price Band Minimum Lot Size Issue Size IPO Venue Offer Size Particulars Sakar Healthcare Limited Initial Public Offering on SME Platform Floor Price: Rs. 42 per equity share Cap Price: Rs. 50 per equity share 3,000 Equity Shares Rs Lakhs at Floor Price and Rs Lakhs at Cap Price NSE Emerge 29,61,000 equity shares of Rs. 10 each Offer Structure Market Maker Portion Non-Retail Portion Retail Portion 1,53,000 equity shares 14,04,000 equity shares 14,04,000 equity shares Issue Manager Pantomath Capital Advisors Pvt Ltd. Registrar

26 Objects of the issue INR Lacs Sr. No. Object Total Estimated Cost 1 Setting up new manufacturing line Lyophilisation (a) Imported Plant and Machinery (b) Indigenous Plant And Machinery (c) Furniture And Fixture (d) Building Alteration New Product Registration [ ] 3 EU GMP Registration [ ] 4 Working Capital [ ] 5 General Corporate Purpose [ ] Total Cost of the Project

27 Objects of the issue Setting up of New Lyophilisation facility to manufacture lyophilized products (Injectable) Establishment of Lyophilisation facility to manufacture Lyophilized Products (Injectable) in existing unit, having an aggregate capacity of 22,000 vials per day, which will enhance product portfolio. Lyophilisation process ensures longer shelf life and extended stability of the products. Manufacturing facility will help to increase revenue and profit margins significantly, since products manufactured through this process of freeze drying are used in treating critical care illness. Lyophilisation Process Freeze drying (Lyophilisation) is a process of removing moisture from the frozen state of products using process of sublimation to enhance stability and shelf life. Vials are filled with liquid solution and loaded into the Lyophiliser using automatic loading system under class 100 environment which is protected by open RABS. Lyophiliser is loaded shelf by shelf. Once loading is completed, automatic freeze drying cycle starts. After completion of freeze drying, half stoppered vials are fully stoppered and they are unloaded from the machine, using automatic unloading system connected to cap sealing machine protected by open RABS.

28 ISSUE PRICE EPS Working Year Ended EPS (Rs.) Weight March 31, NAV Multiple Particulars Shareholders Fund Weight ` 1716 Lacs March 31, March 31, Weighted Average 2.58 No. of Shares 80,00,000 NAV Per Share `21.45 Industry NAV Multiple 2.2 P / E Ratio Working Particulars Price Band ` 42 - `50 PE Ratio Based on Basic EPS of Rs for the Year Ended March 31, 2016 at Floor Price Based on Basic EPS of Rs for the Year Ended March 31, 2016 at Cap Price Based on Weighted Average EPS of Rs for the past three years at Floor Price Based on Weighted Average EPS of Rs for the past three years at Cap Price Industry Composite PE Ratio 27.9 Industry Highest PE Ratio 41.7 Industry Lowest PE Ratio 1.1

29 Current Ownership Structure Shareholder No. of Equity Shares Percentage Promoter Sanjay Shah 58,67, % Aarsh Shah 13,07, % Rita Shah 2,45, % Promoter Group Ayushi Shah 1,00, % Promoter & Promoter Group 75,20, % Employees 80, % Public Shareholders Body Corporate Airmax (Gujarat) Pvt. Ltd. 4,00, % Total 80,00, %

30 Thank You 2016 Sakar Healthcare Limited, All Rights Reserved. Sakar Logo is a trademark of Sakar Healthcare Limited. In addition to Company data, data from market research agencies, Stock Exchanges and industry publications has been used for this presentation. This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted, abridged, copied or reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and company names and logos mentioned herein are the trademarks or registered trademarks of their respective owners.

31 Industry Overview Indian Pharmaceutical Market is 3 rd largest in terms of volume and 13th largest in terms of value, as per a pharmaceuticals sector analysis report by equity master. The Indian pharmaceutical industry is estimated to grow at 20% CAGR over the next five years, as per India Ratings and Research Pvt. Ltd. Emerging markets have also been a sustainable source of growth Branded generics + high out of pocket spending in emerging markets bodes well for Indian pharmaceuticals Economic development and efforts to improve healthcare access are likely to drive growth Abundant opportunities exist across markets Sizeable opportunities exist in both mature as well as emerging economies across Asia Pacific Shift in favor of un-branded generics and increasing competition from local players and multinational pharmaceutical companies could impact margins across emerging markets over the longer-term Reference: ICRA Research Services - Indian Pharmaceutical Industry (An Update on Emerging Markets A Key Export Destination)