Automobile

TTK Healthcare Ltd – Innovating the Pharma Industry

TTK Healthcare Ltd. manufactures and distributes India's first indigenous heart valve prosthesis.

(A) About

TTK healthcare Ltd_PA Wealth.

TTK Healthcare Limited commenced operations in 1953 as a pharmaceutical company. Over the years, it also diversified its presence across industries, with revenue sources distributed across many product categories, including contraceptives, gripe water, cosmetics, medical devices, home-care products, and  food  products. However, It has adopted an outsourcing model for manufacturing most of its products, except for the food products, medical and protective devices divisions.

(B) Journey of TTK Healthcare Ltd.

(C) Board of Directors

TTK Healthcare Ltd_ Board of Directors_PA Wealth

(D) Shareholding Pattern of TTK Healthcare Ltd.

TTK Healthcare Ltd_Shareholding_PA Wealth.
TTK Healthcare Ltd_Shareholders_PA Wealth.

(E) Business Segments of TTK Healthcare Ltd.

TTK Healthcare Ltd_Products Segments_PA Wealth.

Animal Welfare Division sells a wide range of animal pharma products, such as feed supplements, antibiotics, cocktail enzymes, etc.

The company's consumer products business includes marketing and distribution of Woodward's Gripe Waters, the EVA range of cosmetics,as well as a diverse selection of scrubbers, air fresheners, and others. Woodwards Gripe Water holds the distinction of being the oldest FMCG brand worldwide.

Medical Devices: This segment is divided into two parts. Firstly, the Orthopedics division offers a joint replacement portfolio that includes various component types and sizes. Secondly, the heart valve division manufactures and distributes heart valve prostheses in India.

Protective Devices: It stands as one of the key players in the Indian condom Industry, It also engaging in the manufacture and marketing of male contraceptives and other related products.

Food: The company is one of the largest manufacturers of extruded products (Papad) in India, catering to B2B and export customers, as well as being marketed in selected markets within India.

Furthermore, in the "Other" category, it is India's leading publisher of maps and map-based products, as evidenced by offerings such as the Atlas.

Moreover, in the Human Pharma sector, the company has successfully completed the transfer of its division for Rs 805 Cr. to M/S BSV Pharma Pvt Ltd.

(F) Revenue Segment

TTK Healthcare Ltd_Products Wise Revenue_PA Wealth.

Product Wise Revenue

Additionally, The Consumer Products business is the largest segment of the company’s revenue, accounting for 32.77% of the company's total revenue in the financial year 2023. This is also followed by Protective Devices, which accounts for 26.33% of the total revenue.

Further, the Food segment accounts for 15.15% of the total revenue. While, animal walfare segment accounts for 14.43% The company has three more segments medical devices accounts for 9.76%, human Pharma accounts for 1.50%, and Others accounts for 0.05% of the total revenue.

(G) Cost Structure

TTK Healthcare Ltd_Cost Structure_PA Wealth.

(H) Financials

TTK Healthcare Ltd_Financials_PA Wealth

Company has grown its revenue at 5.71% p.a in the past 10 years, while PAT grew from Rs 12.39 Cr in FY14 to Rs 639.71 Cr in FY23.

Further The company is debt free in FY23.

DuPont Analysis

TTK Healthcare Ltd_DuPont Analysis_PA Wealth

(I) Management Discussion & Concall Highlights

Meanwhile, the Animal Welfare Market size is estimated to be around Rs.7,000 crores, and is growing at around 9 – 10%.

The Company has the unique advantage of an exclusive network for distribution of FMCG / OTC (over the counter products). This can be leveraged for launch of new products so as to ensure improved profitability and value creation through brand building.

Additionally, the Consumer Products Division reported a revenue from operations of Rs.241.27 crores, with a growth of around 11%.

Moreover, for the Capex proposals, the Company is planning to do some investments in Foods and Condoms businesses.

Additionally, Foods is a B-2-B business and the present goal is to maximize the capacity usage at Jaipur. This has also been accomplished through making all the manufacturing lines more adaptable for creating different sorts of items.

Further, with the technical tie up with Ceramtec, Germany, the Company currently has a variety of Hip Implants. The company also aim is to launch a high end premium product with Ceramic Head in the Hip Segment, in a technical tie-up with Ceramtec, Germany. Moreover, The trials are in way and the product is likely to be available for test marketing within the next 6 months and this will be a niche offering.

The Company has cash resources and it proposes to invest these resources in various enterprises to build them up to an acceptable level. These initiatives had a different risk profile, hence the Promoters decided not to expose Public Shareholders to them and give them a delisting option. The other businesses have a margin profile of 2–3%, hence the Company must keep interest income to operate.

(J) Strengths and Weaknesses

Strengths

TTK Healthcare has a widespread distribution network and has periodically invested in brand building. It has managed to cross-leverage its existing distribution network and established brand presence across product segments, which include contraceptives, gripe water, cosmetics, medical devices, homecareand food products, thus enabling it to gain competitive edge over its peers.

Weakness

The company remains exposed to intense competition in most product segments from both organized and unorganized players. Further, in order to maintain its market share and brand  equity,  continuous  sales  promotion,  advertisement  and  branding  are  required,  which  add  to  cost.  However, the company’s ability to pass on cost inflation and maintain its margins in a range bound manner mitigates the risk to an extent.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets and Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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