investor presentation hem securities ltd. presentation.pdf · incorporated in the year 2012 by mr....
TRANSCRIPT
HEM SECURITIES LTD. AWARD WINNING MERCHANT BANKER
INVESTOR PRESENTATION
2
SAFE HARBOUR
This presentation has been prepared by Earum Pharmaceuticals Ltd (the “Company”) for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any
particular person and does not constitute any recommendation or form part of any offer or invitation, directly or indirectly, in any manner, or inducement to sell or issue, or any solicitation of any offer to purchase or
subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. This presentation does
not solicit any action based on the material contained herein. Nothing in this presentation is intended by the Company to be construed as legal, accounting or tax advice. This presentation has been prepared by the
Company based upon information available in the public domain. This presentation has not been approved and will not or may not be reviewed or approved by any statutory or regulatory authority in India or by any
Stock Exchange in India. This presentation may include statements which may constitute forward-looking statements. The actual results could differ materially from those projected in any such forward-looking
statements because of various factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events,
or otherwise. This presentation contains certain forward-looking statements relating to the business, financial performance, strategy and results of the Company and/ or the industry in which it operates. Forward-looking
statements are statements concerning future circumstances and results, and any other statements that are not historical facts, sometimes identified by the words including, without limitation "believes", "expects",
"predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements, including those cited from third party sources, contained in
this presentation are based on numerous assumptions and are uncertain and subject to risks. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events,
performance or results to differ significantly from any anticipated development. Neither the Company nor its affiliates or advisors or representatives nor any of its or their parent or subsidiary undertakings or any such
person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking
statements contained in this presentation or the actual occurrence of the forecasted developments. Forward-looking statements speak only as of the date of this presentation and are not guarantees of future performance.
As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any
change in events, conditions, assumptions or circumstances on which these forward looking statements are based. Given these uncertainties and other factors, viewers of this presentation are cautioned not to place
undue reliance on these forward looking statements. The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their
respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such
information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise in connection with this presentation,
and makes no representation or warranty, express or implied, for the contents of this presentation including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made
by any of them, or on behalf of them, and nothing in this presentation or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Past performance is not
a guide for future performance. The information contained in this presentation is current, and if not stated otherwise, made as of the date of this presentation. The Company undertakes no obligation to update or revise
any information in this presentation as a result of new information, future events or otherwise. Any person/ party intending to provide finance/ invest in the shares/ businesses of the Company shall do so after seeking
their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. This presentation is not a Draft Prospectus/Prospectus, a statement in lieu of
a prospectus, an offering circular, an advertisement or an offer document under the Companies Act, 2013, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009, as amended, or any other applicable law in India. This presentation is strictly confidential and may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No
person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as
having been authorized by any person. Failure to comply with this restriction may constitute a violation of the applicable securities laws. Neither this document nor any part or copy of it may be distributed, directly or
indirectly, in the United States. The distribution of this document in certain jurisdictions may be restricted by law and persons in to whose possession this presentation comes should inform themselves about and
observe any such restrictions. By reviewing this presentation, you agree to be bound by the foregoing limitations. You further represent and agree that you are located outside the United States and you are permitted
under the laws of your jurisdiction to receive this presentation. This presentation is not an offer to sell or a solicitation of any offer to buy the securities of the Company in the United States or in any other jurisdiction
where such offer or sale would be unlawful. Securities may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, in to or within the United States absent registration under the
Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other
jurisdiction of the United States. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended.
COMPANY OVERVIEW
3
Incorporated in the year 2012 by Mr. Bhumishth Narendrakumar Patel, Chairman and Managing Director and one of the Promoters of our Company.
Company is engaged in the pharmaceutical business involving marketing, trading and distribution of wide range of pharmaceutical formulation products.
It includes anti-biotic drugs, anti-malarial drugs, anti-allergic & anti cold drugs, analgesic/ anti-pyretic & anti inflammatory drugs, dermatology products, cerebral activator drugs, neurological drugs, gastro intestinal drugs, steroids, gynaecology drugs, calcium, multivitamins, anti-oxidants and injections.
Company offer around 125 pharmaceutical formulation products, of which around 24 products are marketed by company under own brand name, the manufacturing of which is outsourced by third parties.
Apart from pharmaceutical formulation products, we also deals in trading of active pharmaceutical ingredients (API’s) such as Levofloxacin Hemihdrate IP, Albendazol IP, Amoxicillin Trihydrate IP etc.
Its registered office, corporate office and warehouse situated at Ahmedabad (Gujarat).
As per Restated Financial statements for the nine (9) months period ended December 31, 2018 and fiscal 2018, 2017 and 2016, Total revenues were ₹ 34.50 Cr, ₹ 35.85 Cr, ₹ 23.69 Cr, and ₹ 18.63 Cr, respectively. Profit after Tax for the similar period mentioned above was ₹ 0.87 Cr, ₹ 0.86 Cr, ₹ 0.16 Cr, and ₹ 0.10 Cr, respectively.
COMPANY PROFILE
4
Total turnover of the
Company reached to Rs.
8 crores
Crossed Turnover of
Rs. 18 crores
Crossed Turnover of
Rs. 23 crores ”
Crossed Turnover of
Rs. 35 crores
Conversion of the Company from Private
Limited to Public Limited
Company.
Incorporation of the
Company in the name of
“Earum Pharmaceutic
als Private Limited”
KEY EVENTS / MILESTONES
FY 2014 -15
FY 2015 -16
FY 2016 -17
FY 2017 -18
FY 2019
FY 2012
5
13 States
Registered & Corporate Office
OUR PRESENCE
6
Our Footprints
PRESENCE
7
MARKETING OF FINISHED FORMULATIONS OF OWN
BRANDS THROUGH DISTRIBUTION NETWORK
TRADING OF PHARMA RAW MATERIALS AND API’S
BUSINESS ACTIVITIES
THIRD PARTIES MANUFATURING THROUGH CONTACT
MANUFACTURING
TRADING OF GENERIC FINISHED FORMULATIONS
(OWN AND OTHER’S BRANDS)
8
PRODUCT
SEGMENT PRODUCT RANGE
ANTI-BIOTIC
EROCLAVE–625
Tablets
EROPOD- 100/200
Tablets
EROCEFUX- 250/500
Tablets
EROTHRO-250/500
Tablets
EROFLOX-OZ
Tablet
EROFLOX-200
Tablets
EROFIXIME–200
Tablets/IV
EROFIXIME- OZ
Tablets
EROFIXIME–OF
Tablets
EROFIXIME–AZ (lb)
Tablets
EROPOD – CV
Tablets
EROFIXIME- CV
Tablets
EROLEV–OZ
Tablets
EROLEV-500
Tablets/IV
EROFLOX-OZ
Sussp.
EROCLAVE Forte
Dry Syrup
EROCLAVE
Dry Syrup
EROFIXIME
Dry Syrup
EROPOD
Dry Syrup
EROCEFUX- Dry
Syrup
ANTI- MALARIAL ARTYNET-Kit Tablets ARTYNET – L Forte Tablets ARTYNET Inj.
ANALGESIC /
ANTI – PYRETIC
&
ANTI –
INFLAMMATORY
EROFANC-P
Tablets
EROFANAC-P
Suspension
EROFANC-SP
Tablets
EROFANC – MR
Tablets
ERODOL
Gel
ERODOL-SP
Tablets
ERODOL-MR
Tablets
EROHEAL
Tablets
EROHEAL-D
Tablets
ETOLCHY
Tablets
AALKAZ
Syrup
DRETIN – M
Tablets
MEFNAMOL-PLUS
Suspension
PARSITOL
Tab/Suspension/IV
COLCID-A
Tablets
9
SEGMENT PRODUCT RANGE
ANTI- ALLERGIC
&
ANTI-COLD
TREXODINE
Syrup
EROCOFF
Syrup
EROCOFF – DM
Syrup
EROCOFF – LS
Syrup
EROZINE-5
Tablets
EROZINE – M
Tab/Syrup
EROCOLD-TOTAL
Tab/Syrup
EROCOLD-TOTAL
Tab/Syrup
NIMICOOL
Tab/Syrup
NIMOLSY
Tab/Syrup
DERMATOLOGY KETNIZAL-200
Tablets/Soap/Cream
ITRANZ-100/200
capsules
FUNGIRUM-GM
Cream
LUIRUM-1
Cream
DERMIRUM
Cream
CALCIUM,
MULTI-
VITAMINS
&
ANTI-
OXIDANTS
&
GYNECOLOGY
CALCYBAR-D3
Tablets/Soft Gel
CALCYBAR-K27
Tablets/Soft Gel
CALCYBAR
Tablets/Syrup
VITAJING
Soft Gel/Capsules
ERO D3
Tablet/Soft Gel
SILVEE
Capsule/Syrup
LYCONY
Ssoft Gel/Syrup
EROHIM-XT
Soft Gel/Syrup
EAROVIT
Tablet/ Syrup/Drops
EAROVIT-FORT
Soft Gel/Tablets
EAROVIT-GOLD
Soft Gel/Tablets
EAROVIT-PLUS
Soft Gel/Tablets
ERO-ARGIN
Sachet
MANGOSE
Energy Powder
ORANGEY
Energy Powder
EROGEST-200
Soft Gel
PYRINOS PLUS
Tablets
EROSTRON
Tablets/Inj.
TRENIXA–M
Tablets
CHOCOSTAR
Powder/Syrup
BEECOPS Tablets LYCYN Syrup CYPUM Syrup
PRODUCT
10
PRODUCT
SEGMENT PRODUCT RANGE
NEUROLOGICAL ERO-BDF
Tablets
CORTDEF-6
Tablet
MECOLBA–P
Capsules
MYCOLBA
Syrup
METPREDY-4/8
Tablet
GASTRO
INTESTINAL
EROPANTA-40
Tablets/Inj.
EROPANTA–DSR
Tablets
ERORABE–DSR
Capsules
ERORABE–20
Tablets
ERORABE–LS
Capsules
MEGNAFFIN
Suppository
EROCID
Sussp.
PREBIOTICS
Capsule/Sachet
EAROZYM
Syrup/Drops
CRALSATE–O
Syrup
INJECTIONS &
IV SET
EROXON-1
Inj.
EROXONE-S 1.5
Inj.
EROZONE-S 1.5
Inj.
EROCILIN-TZ
Inj.
MERRYPEN-1
Inj.
ERODOL-AQ
Inj.
MYCOLBA-1500
Inj.
MYCOLBA-PLUSE
Dispo Pack Inj.
ROSERED
Inj.
EROTHER
Inj.
DOLTRUM
Inj. / Tablets
EROCLAVE
Inj.
EROLINE-200
IV Set
EROGEST
Inj.
11
PRODUCT
12
PRODUCT
Mr. Bhumishth Narendrabhai Patel
Chairman and Managing Director
• He has more than 11 years of rich experience in the
Pharmaceutical Industry
• He oversees and controls the overall management of the Company
• He is a visionary entrepreneur and has played a pivotal role in
setting up the business of the Company
Ms. Payal Bhumishth Patel
Whole Time Director
• Bachelors degree in Arts from Hemchandracharya North Gujarat
University.
• She has been on the board since inception.
• She is responsible for the managing administrative activities of our
Company.
13
OUR MANAGEMENT
Marking our Footprints in Global Market
The Company has now ventured into foreign markets along with Pan India presence which aims at growing its sales and offering new products.
Focus on dealing in quality standard products
The Company deals in the products which meet the requisite quality standards providing the desired quality of products which helps in enhancing maintaining long term relationships with customers.
01
02
14
STRATEGIES
Leveraging our Marketing skills and Relationships
The Company plans to increase the customer base by supplying orders in hand on time, maintaining and renewing our relationship with existing clients.
Diversified Product Portfolio
The Company has diverse product portfolio across various segments. The diverse product range allows the existing customers to source majority of their product requirements and also attract potential clients
03
04
15
STRATEGIES
04
Develop cordial relationship with our Suppliers, Customer and employees
The Company generates repetitive orders with its customers and suppliers, this enables us to establish strong, mutually beneficial long-term relationships which will enable in growth and development of the business
Quality assurance
The ability to understand the requirements of the Customers and to execute the requirement enables us to get repeated orders from existing customers and to attract new customer base.
05
06
16
STRATEGIES
INDUSTRY OVERVIEW
17
18
INDUSTRY OVERVIEW
While the overall cost of manufacturing in India is likely to remain competitive, productivity in Indian pharma sites continues to be 40‐50 percent lower than the global median. This presents a significant opportunity to drive efficiencies and offset some of the cost pressures.
Pharmacists will grow more powerful (e.g., due to INN name) and the market may see another wave of consolidation giving rise to pharmacy chains. E‐pharmacies will see a surge with easing regulation and increasing private investment in this space, causing a dramatic shift in generic brands and substitution ability.
The cost of manufacturing formulations in India remains 30‐40 percent lower than other comparative manufacturing hubs such as China and Eastern Europe, notwithstanding low productivity levels.
Technology‐based remote healthcare will continue to expand, significantly increasing the reach and influence of the doctors. The proposed UCPMP will also move to mandatory compliance with oversight.
Ensuring India’s self‐sufficiency in API/intermediates will be critical to maintain the competitiveness of Indian players and to ensure supply security for the local market. Investing in next‐generation APIs can help India pharma be at the forefront of these technologies and differentiate itself from other players. The government can play a crucial role to help the industry achieve self‐sufficiency in APIs / intermediates. It could explore setting up three to five dedicated clusters across the country for the API / intermediate industry. These clusters could offer benefits such as subsidized land and utilities, common resources for effluent treatment, quality assurance, etc.
PEER COMPARISON
19
20
PEER COMPARISON
0
20
40
60
80
100
120
140
160
Earum Pharmaceuticals Limited Vaishali Pharma Ltd
Face Value (Rs.)
EPS (Rs.)
PE (Rs.)
RONW (in %)
Book Value (In Rs.)
Total Income (cr.)
Sr. No. Particulars Face
Value
(In Rs.)
EPS (In
Rs.)
P/E Ratio RONW (%) BOOK
VALUE
(Rs.)
Total
Income
(Rs. In cr)
1. Earum Pharmaceuticals
Limited.
10 3.50 [●] 20.34% 136.46 35.85
2. Vaishali Pharma Ltd. 10 1.41 30.96 3.87% 25.83 69.42
FINANCIAL OVERVIEW
21
PARTICULARS FOR FINANCIAL YEAR (Rs. in Cr)
31-12-2018 FY 18 FY 17 FY 16
LIABILITIES
Share Capital 0.31 0.31 0.11 0.11
Reserves & Surplus 4.77 3.90 1.42 1.26
Share Application Money 0.00 0.53 0.00 0.00
Net Worth 5.08 4.74 1.53 1.37
Non Current Liabilities
- Long Term Borrowings 1.60 1.50 0.56 0.39
- Deferred Tax Liabilities (Net) 0.02 0.01 0.01 0.01
- Other Long Term Liabilities 0.00 0.00 0.00 0.00
- Long Term Provision 0.00 0.00 0.00 0.00
Total Non Current Labilities 1.61 1.51 0.57 0.40
Current Liabilities
- Short-term Borrowings 5.81 5.04 1.50 1.51
- Trade Payables 13.75 8.11 4.99 4.97
- Other Current Liabilities 0.49 0.72 2.37 0.44
- Short-term Provisions 0.67 0.40 0.14 0.11
Total Current Liabilities 20.72 14.28 8.99 7.02
Total Liabilities 27.41 20.53 11.08 8.79
PARTICULARS FOR FINANCIAL YEAR (Rs. in Cr)
31-12-2018 FY 18 FY 17 FY 16
ASSETS Non Current Assets
Fixed Assets
- Tangible Assets 0.36 0.19 0.16 0.16
- Intangible Assets 0.00 0.00 0.00 0.01
- Capital WIP 0.00 0.00 0.00 0.00
- Intangible Assets Under Development 0.00 0.00 0.00 0.00
- Non Current Investments 0.00 0.00 0.00 0.00
- Deferred Tax Assets (Net) 0.00 0.00 0.00 0.00
- Long Term Loans and Advances 0.00 0.00 0.00 0.00
- Other Non Current Assets 0.00 0.00 0.00 0.00
Total Non Current Assets 0.37 0.20 0.16 0.17
Current Assets
- Current Investments 0.00 0.00 0.00 0.00
- Inventories 11.08 8.29 6.54 3.61
- Trade Receivables 14.59 10.89 3.58 4.45
- Cash and Cash Equivalents 0.26 0.02 0.18 0.36
- Short-Term Loans and Advances 1.11 1.13 0.49 0.10
- Other Current Assets 0.00 0.00 0.13 0.10
Total Current Assets 27.05 20.33 10.92 8.62
Total Assets 27.41 20.53 11.08 8.79
FINANCIALS
22
*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)
PARTICULARS FOR FINANCIAL YEAR (Rs in Cr)
31-12-2018* FY 18 FY 17 FY 16
Revenue From Operations 34.50 35.44 23.34 18.57
Other Income 0.01 0.41 0.35 0.06
Total Income 34.50 35.85 23.69 18.63
Total Expenses 32.50 33.89 23.02 18.06
EBITDA 2.00 1.96 0.67 0.57
EBITDA Margin % 5.79% 5.52% 2.86% 3.05%
Depreciation 0.02 0.02 0.02 0.02
EBIT 1.98 1.93 0.64 0.55
EBIT Margin % 5.73% 5.46% 2.76% 2.94%
Finance Cost 0.78 0.69 0.41 0.38
PBT 1.20 1.24 0.24 0.16
PBT Margin % 3.47% 3.50% 1.01% 0.86%
Tax Expense 0.33 0.39 0.08 0.06
PAT 0.87 0.86 0.16 0.10
PAT Margin % 2.51% 2.42% 0.68% 0.53%
FINANCIALS
23
*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)
PARTICULARS FOR FINANCIAL YEAR
31-12-2018* FY 18 FY 17 FY 16
ROE 17.04% 18.08% 10.47% 7.15%
ROCE 15.82% 17.14% 17.98% 16.71%
Debt-to-Equity 1.46 1.38 1.35 1.39
Current Ratio 1.31 1.42 1.22 1.23
Net asset value per share (A/C) (Face Value of Rs. 10Each) (Based on Weighted Average Number of Shares)
164.50 241.09 142.03 172.62
Book Value Per Share (before Issue) 164.48 136.45 142.07 127.18
Basic & Diluted EPS (Before Issue, based on weighted Average no of shares)
28.03 49.04 14.88 12.33
FINANCIALS
24
*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)
18.63
35.85
2016 2018
Revenue (Rs. in Cr.)
0.57
1.96
2016 2018
EBITDA (Rs. In Cr.)
0.10
0.86
2016 2018
PAT (Rs. In Cr.)
Revenue CAGR
3 Year CAGR FY 2016-18
24.38%
104.88%
PAT CAGR
EBITDA CAGR
50.94%
3 Year CAGR FY 2016-18
3 Year CAGR FY 2016-18
10.47
17.04
2016 2018
RETURN ON EQUITY (%)
FINANCIALS
25
ISSUE DETAILS
26
27
IPO DETAILS
Issue Size (No of Shares) 18,48,000
Issue Size In Rs. XX
Face Value 10
Issue Price XX
Post Issue No of Shares 61,67,910
Post Issue Paid Up Capital 616 Lakhs
Post Issue Implied Market Cap XX
SHARE HOLDING PATTERN PRE IPO POST IPO
Promoter & Promoter Group 100.00 % XX%
Public 0.00 % XX %
BID LOT
RII XX
Other then RII XX
ISSUE OPENS XX
ISSUE CLOSES XX
LISTING ON BSE SME
LEAD MANAGER TO THE ISSUE
Hem Securities Limited
REGISTRAR TO THE ISSUE
Bigshare Services Pvt Ltd
RESERVATION FOR NO OF SHARES
Market Maker XX
RII XX
Other then RII XX
NUMBER OF SHARES
Pre Issue 43,19,910
Post Issue 61,67,910
ISSUE STRUCTURE
To meet Working Capital requirements
General Corporate Expenses
28
OBJECTS OF THE ISSUE
To Meet Issue Expenses
EARUM PHARMACEUTICALS LIMITED G1, Ground Floor, V R Complex, Near Sanathal Cross Road, SP Ring Road, Sanathal, Ahmedabad-382210. Gujarat, India Tel. No.: +91- 022- 4906 0000 Email ID: [email protected] Website: www.earumpharma.com
904, A Wing, Naman Midtown, Senapati Bapat Marg, Elphinstone Road, Lower Parel, Mumbai-400013, Maharashtra, India Tel. No.: +91- 022- 4906 0000 Email ID: [email protected] Website: www.hemsecurities.com
HEM SECURITIES LTD. COMMITTED TO EXCELLENCE