Supriya Lifescience: PAT growth of 33% & Revenue growth of 24% in FY24 at PE of 24
Doubling revenue to Rs 1,000 cr by FY27 at a CAGR of 21%. FY25 revenue growth to be at 20%+. Maintaining EBITDA margin of 28-30% till FY27
1. API Manufacturer
supriyalifescience.com | NSE : SUPRIYA
Supriya Lifescience Ltd., a cGMP-compliant business in API manufacturing and a focus on products from a variety of therapeutic segments, including anti-histamine, anti-allergic, vitamin, anaesthetic, and anti-asthmatic.
2. FY20-24: PAT CAGR of 13% & Revenue CAGR of 16%
3. Weak FY23: PAT down 41% and Revenue down 13% YoY
4. Strong 9M-24: PAT up 59% & Revenue up 29% YoY
5. Weak Q3-24: PAT down 5% & Revenue up 11% YoY
PAT up 22% & Revenue up 13% QoQ
6. Strong FY24: PAT up 33% & Revenue up 24% YoY
7. Business metrics: Stabilizing return ratios
8. Outlook: Revenue growth of 20%+ in FY25
i. FY25: Revenue growth of 20%+
In terms of revenue growth, we have always maintained that year on year, you can expect upwards of 20% growth from our side. And that is still the number that we would like to maintain for the next three years.
ii. FY25: 28-30% EBITDA margin
We are very confident that 28% to 30% we will be able to maintain. The company definitely has potential to achieve higher than 30% because a lot of the new projects the same opportunities come at a more premium margin that is what we benchmark ourselves against.
iii. FY24-27: 21% revenue CAGR
Guiding for revenue of Rs 1,000 cr by FY27 from Rs 570 cr in FY24, implies a revenue CAGR of 21% which is in the range of 20%+ guided by management in FY25 and looks reasonable.
I would say, that the INR1000 crores with the margins we are committing, we will be able to achieve that.
iv. FY27: CMO CDMO to be 18-20% of revenue with better than 28-30% margins
We have large CMO, CDMO opportunities in our hand. Those will also scale up in the next three years.
In the INR1,000 crores we anticipate about 18% to 20% coming in from CMO, CDMO. It is in fact a better margin proposition than what you are guiding at 28% to 30%
9. PAT growth of 33% & Revenue growth of 24% in FY24 at a PE of 24
10. So Wait and Watch
If I hold the stock then one may continue holding on to SUPRIYA
Coverage of SUPRIYA was initiated after Q1-24 results. The investment thesis has not changed after a good FY24. After a delivering 20%+ revenue growth there is confidence in the management to deliver as per the 20%+ growth guidance for FY25.
SUPRIYA is working on a roadmap of a revenue of Rs 1,000 cr by FY27
Capacity enhancement for further backward integration for existing products, new product rollouts and CMO/CDMO opportunities
In the INR1,000 crores we anticipate about 18% to 20% coming in from CMO, CDMO.
11. Or, join the ride
If I am looking to enter SUPRIYA then
SUPRIYA has delivered PAT growth of 33% & Revenue growth of 24% in FY24 at a PE of 24 which makes valuations fairly priced in the short term..
Outlook for revenue growth of 20% in FY25 while maintaining EBITDA margins at 28-30% at a PE of 24 makes the valuations reasonable from a medium term perspective.
From a longer term perspective, the growth guidance of the management to deliver a top-line of Rs 1,000 cr by FY27 and grow at CAGR of 21% for FY24-27 creates opportunity in the stock over the longer term.
Previous coverage on SUPRIYA
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