Market Cap: ₹ 306 Cr.
Infinium Pharmachem (Nse small cap) is a pharma sector company incorporated in 2003 and was listed on the NSE in March of 2023. The company manufactures and supplies Iodine, Iodine Derivatives, and Active Pharmaceutical Ingredients (APIs)
Business Model and Focus
Infinium Pharmachem operates on a business-to-business (B2B) model. The company’s products are Iodine, Iodine Derivatives, and other active ingredients. These are the raw ingredients used to create medications by other pharma and related companies. Therefore the end customer is NOT the average person.
Entry Barrier for Other Companies
Iodine serves as the primary raw material for Infinium and is supplied by a limited number of suppliers. Over the years, the company has established robust business relationships with suppliers to ensure fast operations and maximum capacity utilization.
The Nse small cap company, Infinium Pharma is expanding its sourcing to include all four major supplying countries: Chile, Japan, the USA, and Turkmenistan.
Clients of Infinium Pharma, source: company presentation
Management Analysis of Infinium Pharmachem Ltd
Mr. Sanjay Patel, MD Mr. Pravin Madhani, Director Mr. Mitesh Chikhaliya
The Board of Directors of the company comprises Mr. Sanjay Patel, who has a Master’s degree and serves as the Managing Director, overseeing sales and marketing activities.
Moreover, another director is Mr. Mitesh Chikhaliya, also with a Master’s degree, who manages international business and finance. Lastly, Mr. Pravin Madhani, with a diverse educational background, is responsible for production-related activities and regulatory matters.
Possible Red Flag: How Much Money is the Management Taking from The Business?
Source: Annual Report
When the analysis of the top 3 directors’ salaries was done, some very unusual figures of salaries came up. The Managing director took away a tremendous 1,961 Crs salary in the financial year 2022. Moreover, the other two directors also took a combined 3,887 Cr. in salary.
How good is Infinium Pharma Financially
The Nse small cap company has experienced significant sales growth over the past four years. However, there has been a notable variance between the growth of operating profit and net profit at times.
When visualised on a chart, it is evident that the company has reduced raw material costs, increasing gross margin. It’s important to note that gross margins are not entirely controllable for any business over a sustained period.
Capital Investment for Revenue Growth
During the conference call, the management discussed their major capital expenditure which will increase the revenue significantly. The Nse small cap has invested Rs. 15 Cr out of Rs. 21.92 Cr to increase its capacities and meet expected demands for the next 4 to 5 years.
This investment is expected to result in a 20-25% annual revenue growth rate, reaching Rs185 Cr, and an improvement in EBITDA margin from the current 15%.
The Pharma Industry Future
The pharma industry is something that is recession-proof. In 2021, the pharmaceutical sector in India had an approximate worth of US$42 billion. With a 20% share of total global pharmaceutical exports, India stands as the leading supplier of generic medicines based on volume. This opens up a big and open market for players like Infinium Pharma who are sitting with small market share as of now.
Disclaimer
The information presented here is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.