Venus Remedies Limited

SR 3Date – 20th Sep 2022

Documents Considered
Quarterly results, AR 22, Original Reports etc.
Time Taken: 5 Hrs.

Venus Remedies Limited (Q1 - FY 23)

(Rs.
Crores)
Q1 FY QoQ YoY
Particulars 22 Q4 Q1 (+/-) (+/-)
Revenue 130 142 143 1% 10%
Other Income 2 2 1 -36% -27%
Total Income 132 144 145 0% 10%
Expenses
Cost of material consumed 113 92 99 8% -12%
Purchase of stock in Trade 2 1 1 28% -53%
Change in Inventories…. (36) 2 (14) -675% -60%
Employee Cost 14 15 17 11% 20%
Selling, Manufacturing and Administrative
Expenses 17 18 19 6% 14%
R & D Expenses 3 8 7 -19% 130%
Total operating expenses 113 136 129 -6% 14%
Finance Cost 0 - 0 - 86%
Depreciation 9 8 8 3% -10%
3330
Profit Before Tax 10 0 8 % -21%
Taxes (2) - 1 - -160%
2896
PAT 12 0 7 % -41%

Company’s revenue increased by 1% QoQ and 10% YoY. PBT has increased by 3330% QoQ and 21% YoY.
Margins during the quarter improved from 3% to 10% due to reduction in the COGS.

AR Extracts (Management Comments)

- Company has upgraded it facilities. E.g. For Enoxaparin installed a robotic line which quadrupled
manufacturing capacity, Improved packaging process for Meropenem (highest grosser for company)
- Management has set mission 2025, to achieve 1000 Crores revenue.
- Post Elores, Company has shifted its focus to Renal Guard Program (attained significant maturity) this
platform will require considerable energy to develop it to its full potential. Within this program, Company
making its first drug which is under development.
- Renal Guard Programme is to reduce toxicity of existing highly toxic antibiotic drugs to rejuvenate their
life span.
- Management states that it has overhauled its entire international marketing area.
- Chairman stated that "FY23 for us would be equally exciting for we have planned many more such projects
which promise to take the organization into a new orbit. They include new product launches, growing our
consumer healthcare division, strengthening our international presence". He expects the FY 23 to be even
better than earlier performance.
- Company is increasing its productivity –
 Packing conveyor in all facilities to enhance productivity by 20% and reduce manpower
requirement
 Installed New Lyophilizer in H -facility to enhance the capacity of the facility to manufacture
Lyophilized products; capacity increased by 1600% against previous lyophilizer capacity
 Installed a high-capacity Automatic Robotic PFS and Cartridge filling & stoppering machine -
this investment increased the capacity by 80 % and helped in achieving very high Enoxaparin
demand.
 Installed new big Cold rooms to cater to the needs for new pipeline products in general facility
and to be ready for future demand.
- The Company focused on fast moving products to increase the overall production without incurring major
capex.
- During the FY 22, Ceftriaxone production volume almost tripled in FY22. Paclitaxel yield rose around
50%, Irinotecan production volume was up more than threefold while Enoxaparin also saw a substantial
increase in volume
- Growth Drivers:
 Company in FY22 entered new markets include Paraguay, Latvia, Congo, Macedonia, UAE,
Cuba, Rwanda, Kuwait, Zambia, Portugal, Ireland to name a few.
 The Company has set its eyes on growing international business sales in FY23.
 The Company has strategized to promote Oncology products in all existing as well as new
markets that the Company wishes to penetrate
 Institutional Business Operations expanded to 4 States- Orissa, J&K, Punjab, and Telangana. New
hospitals and institutional partnerships in government sector
 Management is focused to increase the share of revenue from exports sale, Govt. and institutional
sales etc.

So, from the above statement we can say that no major capex is expected in the near future. Management is
focused towards getting traction from International markets. Due to efficiency improvement steps undertaken
by management, cost savings can be expected in the years to come. They have also increased some of the
capacities in lyophilizer etc. but the Financials impact can’t be determined due to unavailability of information
in this regard. Management is optimistic on Renal Guard programme but this need not be considered as the
game changer, company has a history of selling its core products to other Pharma Companies e.g. Elores was
sold to Cipla after getting launched in 2013 and sold in 2020.

Conclusion
Company is trading at PE of 8 at market cap of 296 Crores. Management has indicated of optimistic future for the
company in the coming years.
However, since company has a history of not so well marketing expertise and struggle at times in maintaining the
sales and margins. And in addition to that, Institutional sales and Govt. sales is not that lucrative in terms of
margins. So even they are quoting a very bright future for the company, I will not venture into this stock and look
out for better opportunities.

Anuj Jain Sumesh Guleria

Research Head Research Assistant
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