Rahul

Investor still learning

[Rahul @pandeyvic]

@shome_rajarshi Absolutely 110%

[Rahul @pandeyvic]

@parthimc84 Appreciate your effort and knowledge, keep up the good work.

[Rahul @pandeyvic]

@Akshit527 added 4 lots today lets he how it unfolds, to me its 0 vs 5x probability in 1 year

[Rahul @pandeyvic]

Your best write up till now

[Akshit Patel @Akshit527]

Shilpa Medicare | Q1 FY27:

From an API manufacturer to an integrated global pharma company

Many investors find pharma businesses difficult to understand because of terms like APIs, formulations, CDMO, biologics, peptides, biosimilars, etc.

Let's understand Shilpa Medicare in simple language.

Think of a medicine like building a car.

Someone manufactures the engine, someone assembles the car, and someone sells it to customers.

Shilpa is trying to do almost everything under one roof, which is why management believes the company is entering its next phase of growth.

1️⃣ API Business (The raw material of medicines)

API (Active Pharmaceutical Ingredient) is the actual chemical that cures a disease.

For example, if you take a Paracetamol tablet, the Paracetamol inside it is the API.

Many pharma companies buy APIs from manufacturers and then convert them into finished medicines.

This is Shilpa's oldest business and still contributes around 47% of revenue.

2️⃣ Formulations (Finished medicines)

Instead of only selling the raw material, companies can manufacture the final medicine itself.

These include:

• Tablets
• Capsules
• Injections
• Patches
• Oral films

Finished medicines generally earn much better margins than selling only APIs.
This segment now contributes around 42% of revenue and was the biggest growth driver during Q1.

3️⃣ CDMO (Contract Development & Manufacturing)

This is probably one of the most exciting businesses.
Imagine a global pharma company discovers a new medicine.

Instead of building its own factory, it hires companies like Shilpa to develop and manufacture that medicine.

Shilpa earns money by manufacturing products for these global companies.

Once customers qualify a manufacturer, relationships generally last for many years, making this a sticky business.

Management highlighted multiple late-stage CDMO programs expected to commercialize over the coming years.

4️⃣ Biologics

Traditional medicines are made using chemicals.

Biologics are medicines developed from living cells.

They are much more complex to manufacture but also command significantly better pricing and margins.

Currently, Biologics contribute only 11% of revenue, but management believes this business can become a major growth driver in the future.

Why is Shilpa different?

Most pharma companies specialize in only one or two areas.

Shilpa is trying to build an integrated platform where it can:

API ➜ Develop the medicine ➜ Manufacture it ➜ Supply finished formulations ➜ Manufacture biologics ➜ Work as a CDMO for global innovators.

Management believes this integrated model creates long-term competitive advantages.

Q1 FY27 Performance:

• Revenue: ₹469 Cr (+43% YoY)
• EBITDA: ₹139 Cr (+42% YoY)
• EBITDA Margin: 30%
• PAT: ₹101 Cr (+115% YoY)

This was the highest-ever quarterly revenue and EBITDA, with strong growth across all major businesses.

API Business:

The API business continued to grow steadily, supported by:

• Oncology APIs
• Specialty CDMO
• Peptide APIs
• New customer additions in developed markets

Management also highlighted:
• 25+ NCE programs
• 15 oncology validations planned this year
• 3 late-stage CDMO programs expected to commercialize in FY28
• Semaglutide DMF filing
• Large peptide expansion underway.
Formulations
This was the biggest contributor to growth.

Revenue more than doubled, driven by:

• US business
• Europe
• Domestic formulations
• Complex generic products

Products like NorUDCA, Rotigotine Patch, Abraxane, Enzalutamide and Abiraterone remain important future growth drivers.

Biologics:

Although still small, management remains very optimistic about this segment.

Key developments include:

• Aflibercept launch expected in FY27
• Nivolumab progressing
• Multiple biosimilar and ADC programs
• Six active CDMO projects
• Recombinant Human Albumin platform

This business has the potential to become much larger over the next few years.

Capex & Balance Sheet:

One of the biggest positives from the concall was management's confidence that the heavy investment phase is largely complete.
Future capex will mainly be towards peptides, APIs and selected formulation projects.

The company also strengthened its balance sheet:
• Net Debt/EBITDA improved to 1.3x
• Credit rating upgraded to AA-
• Existing capacities are expected to drive operating leverage going forward.

Key Takeaway:

Management believes Shilpa Medicare is no longer just an API manufacturer. It is evolving into an integrated pharmaceutical company with businesses across APIs, formulations, CDMO and biologics.

The biggest takeaway from the quarter wasn't just the strong financial performance—it was management's confidence that the investment cycle is largely complete and that the next phase will be driven by commercialization, operating leverage and monetizing the platforms built over the last several years. Although they haven't given any specific guidance.

[Rahul @pandeyvic]

@Akshit527 @SECTOR_RES0123 Will add Zen technologies looks expensive but it's an RNd powerhouse with stable AMC income

[Rahul @pandeyvic]

@Akshit527 It's cooking gas shortage impact when you don't have food security you don't think about preventive health

[Rahul @pandeyvic]

@Akshit527 I will add 2 lots tomorrow at around 7 PE looks like risk worth taking

[Rahul @pandeyvic]

@Akshit527 What is your view on valuation ?

[Rahul @pandeyvic]

@Akshit527 -1.5% I have all the names you mentioned except GSM

[Rahul @pandeyvic]

@AethosWealth Intresting shareholding by DIIS and Vikas Khemani

[Rahul @pandeyvic]

@shome_rajarshi You must try 2 additional monitors it will improve productivity by 5x while working on screen

[Rahul @pandeyvic]

@DhruvMadia6 If you can review prizor Viztech huge talewinds in cctv market

[Rahul @pandeyvic]

@Akshit527 What is EL?

[Vijay Kedia @VijayKedia1]

Respected @nsitharaman ji and @FinMinIndia,

Suggestion 3 of 3 for strengthening India's capital markets:

Securities Transaction Tax (STT) should be abolished.

STT was introduced as a simplified transaction tax to facilitate easier collection of taxes from capital market transactions. However, over time, it has effectively become an additional layer of taxation alongside other market-related levies.

A simplification measure should not evolve into permanent duplication.

In addition to brokerage, investors already bear multiple statutory and regulatory charges including exchange transaction charges, GST on transaction-related charges, SEBI turnover fees, stamp duty and STT.

Unlike income tax, STT is payable irrespective of whether an investor makes a profit or a loss. The investor pays the tax simply for participating in the market.

Capital markets play a vital role in channeling household savings into productive enterprises, supporting entrepreneurship, generating employment and strengthening India's economic growth. Transaction costs and multiple layers of taxation discourage participation, particularly among long-term retail investors.

India's equity markets have matured significantly since the introduction of STT. The time has come to review its original purpose and reconsider its continued relevance.

Abolishing STT would simplify market taxation, improve capital market efficiency and encourage greater participation in India's growth story.

Respectfully submitted.

[Rahul @pandeyvic]

@DhruvMadia6 Please add your YouTube channel link to your Twitter profile

[Rahul @pandeyvic]

@Akshit527 @samisosa1234 Prizor Viztech you can study seems long way to go in cctv market due to ban on chinese equipments

[Rahul @pandeyvic]

@Akshit527 @sourodeep_b @samisosa1234 Watch this for reason https://t.co/rjGqL7tb63

[Rahul @pandeyvic]

@Akshit527 Cellecor moving up after long time , seems our conviction finally paying off

[Rahul @pandeyvic]

@shome_rajarshi Oswal pumps, cellecor gadgets

[Rahul @pandeyvic]

@Akshit527 Maharashtra election hangover impact should normalise now for them