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Meghna Rathod    


Mumbai, India

An individual with masters degree in IT. Working as an computer teacher in school from last 5 years. I am highly interested in equity market and value investing. Looking forward to learn more in this sector and enhance my knowledge.

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Contributor since: 2023

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AMIORG

Comments: 0 | Likes: 0 | Current Price: ₹ 1213.2


Ami Organics Ltd

A Business Analysis


About Ami Organics

Ami Organics Ltd engages in the R&D, manufacture, and sale of pharmaceutical intermediates in India. The enterprise offers about 450 pharma intermediates to be used in regulated and generic active pharmaceutical components for anti-retroviral, anti-inflammatory, anti-psychotic, anti-cancer, anti-parkinson, anti-depressant, and anti-coagulant packages, in addition to new chemical entities. It additionally offers preservatives, such as parabens and parabens formulations for use in cosmetics, animal meals, and personal care industries; and specialty chemicals for use in cosmetics, dyes, polymers, and agrochemicals. In addition, the company exports its products to approximately 25 nations worldwide. Ami Organics Ltd founded in 2004 and is based in Surat, India.

AMI Organics (AMI) is a research and development driven manufacturer of specialty chemicals with varied end usage and is focused on the development and manufacturing of advanced pharmaceutical intermediates (“Pharma Intermediates”) for regulated and generic active pharmaceutical ingredients (“APIs”) and New Chemical Entities (“NCE”) and key starting material for agrochemical and fine chemicals.

Company Overview

Our Journey

Company's Products

Advance Intermediates for Pharmaceuticals

Advanced Intermediates:

  • 450+ Products
  • Intermediates across 17 therapeutic areas
  • Chronic Therapy focus: 91%
  • Majorly backward integrated to Basic Chemical level
  • 50-90% global market share key molecules

Specialty Chemicals

  • Niche KSM for Agrochem and Finechem companies
  • Parabens & paraben formulations, Salicylic Acid and other specialty chemicals that find enduse in cosmetics, dyes, polymers and agrochemical industries, animal foods, and personal care industries
  • New segment Electrolyte used in manufacturing cells for energy storage devices. 

Strong and Long-term relations with Diversified Customers across Geographies

Cont...

Clientele

Advanced Pharma Intermediates (Top Clients)

Generic

Specialty Chemicals (Top Clients)

Company's Manufacturing Facilities

Superior R&D Capabilities

01 - R&D Lab - 2 , 200 approved facility sq at . mtrs inhouse Sachin by an ADL

02 - Technology - ADL fully supported by analytical instruments (LCMASS, GCMASS, UV spectrophotometer, ultrasonic bath, photo stability & stability  chambers, etc.)

03 - State of the art equipment - Modern fume hood system, autoclave, high vacuum distillation assembly, glass reactor assembly etc.

04 - R&D Stretgy - R&D team - focused on products pipeline, NCE product, new product develpoment, CDMO. Process improvement - innovating new ways/improving processes to manufacturing products.

05 - Team - Specialised team 60+ 10 members hold PHDs 39 hold master's degree . Strong focus on scientiests recruitments

06 - Patents - 12 process patents filed out of which:

1 patent granted

7 patents published

4 patent appliend

Superior R&D Capabilites (Cont'd)

Our Capabilities in Key Chemistry

Superior R&D Capabilites (Cont'd)

Continuous Flow Reactor

  • Continuous flow reactors are more efficient, and sustainable when compared to manufacturing products using traditional reactors.
  • AMI has successfully developed cababilites in plug now, catalytic fixed-bed flow, Tubular flow kind of reactors.
  • This technology reduces the cycle time to manufacture a product which leads to lower utilization of utilities.
  • The space required to fit a flow reactors is considerably lower than the traditional reactors.
  • AMI organics has successfully developed and commercialised 2 products under continuous flow.
  • AMI organics has successfully developed 3 more existing products which are under pilot scale now. the company has already ordered equipment and the products will commercialize using continous flow in current FY.

Company's Business Model

Uniquebess of thier business model

Company's Capex Plan

1. Capex - 190 Crore

- On 29th April, BOD approved the Capex plan of INR 190cr to build a brownfiled plan at Ankleshwar, Gujarat, to support the future business growth in the company's advanced pharmaceutical intermediates segment.

2. Capex - Funding

- The capex will be funded through a mix of General Corporate funds of IPO proceeds, internal accruals, and dent. Currently the company does not have long term debt on the books other than a short -term working capital loan.

3. Capacity and Clearances

  • The Ankleshwar site has received the necessary environmental clearnance and the new facilities will have ~90 reactors taking total reach capacity of 436KL.
  • The current capacity utilisation at the Sachin unit in Surat, Gujarat which manufacturers the majority of the pharma intermediates is at ~65%.

4. Timeline and Other Details

- The plant is expected to start commercial operation from Q4FY24.

  • The production at the Ankleshwar unit was successfully transferred to the Jhagadia unit during the last quarter without losing any revenue. Currently, the old plant at Ankleshwar is being demolised and the new plant will be built on this site.

Company's Strategy and Outlook

Industry Overview

Currently ~90% of our revenue come from products used in Pharmaceutical industry specifically for manufacturing of APIs…

…with Global API industry estimated to grow by 6%; witnessing shift in production activity from developed markets to Asia…

…whereas Key APIs for which Intermediates are manufactured by AMI are expected to grow at much faster rate as the they cater to Chronic disease market which is expected to grow at higher rate than the overall market

Speciality Chemical Overview

New Product developed Electrolyte Additive

Acquisition of Gujarat Organics facilities:

Deal Rationale

Acquisition is in line with the Company’s inorganic growth strategy of foraying further into the specialty chemicals sector Offers significant diversification in the existing product portfolio which furthers the objective of achieving an inorganic expansion of business Free Land available for brownfield expansion with all statutory approval.

Deal Stats

Slump sale transaction with two facilities situated at Jhagadia acquired. Combined manufacturing capacity of 3,600 MTPA taking total manufacturing capacity of Ami Organics to 6,060 MTPA Sales turnover of the 2 units acquired in Fiscal 2021:  INR 1,060 Mn(8) Total Purchase Consideration: INR 930 Mn l Acquisition Debt taken:  INR 650 Mn.

Gujarat Organics portfolio

Preservatives: Parabens & paraben formulations  with end use in cosmetics, animal foods and personal care industries.

Other Specialty Chemicals that find end use in cosmetics, dyes, polymers and agro industries

Segment Strategy and Outlook

Industry Overview

Cont...

Management Of The Company

Shareholding Pattern

Financial Highlights

Profit and Loss

Balance Sheet

Cash Flow

Margin Profile

 

 

 

 

 

 

 

 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:

Source - Company's Annual Report, Company's Investor Presentation. Disc - Not an recommendation.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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