INVESTOR PRESENTATION HEM SECURITIES LTD. AWARD WINNING MERCHANT - - PowerPoint PPT Presentation

HEM SECURITIES LTD.

AWARD WINNING MERCHANT BANKER

INVESTOR PRESENTATION

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SAFE HARBOUR

This presentation has been prepared by Earum Pharmaceuticals Ltd (the “Company”) for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part of any offer or invitation, directly or indirectly, in any manner, or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. This presentation does not solicit any action based on the material contained herein. Nothing in this presentation is intended by the Company to be construed as legal, accounting or tax advice. This presentation has been prepared by the Company based upon information available in the public domain. This presentation has not been approved and will not or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This presentation may include statements which may constitute forward-looking statements. The actual results could differ materially from those projected in any such forward-looking statements because of various factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events,

• r otherwise. This presentation contains certain forward-looking statements relating to the business, financial performance, strategy and results of the Company and/ or the industry in which it operates. Forward-looking

statements are statements concerning future circumstances and results, and any other statements that are not historical facts, sometimes identified by the words including, without limitation "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements, including those cited from third party sources, contained in this presentation are based on numerous assumptions and are uncertain and subject to risks. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Neither the Company nor its affiliates or advisors or representatives nor any of its or their parent or subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this presentation or the actual occurrence of the forecasted developments. Forward-looking statements speak only as of the date of this presentation and are not guarantees of future performance. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward looking statements are based. Given these uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward looking statements. The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise in connection with this presentation, and makes no representation or warranty, express or implied, for the contents of this presentation including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, and nothing in this presentation or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Past performance is not a guide for future performance. The information contained in this presentation is current, and if not stated otherwise, made as of the date of this presentation. The Company undertakes no obligation to update or revise any information in this presentation as a result of new information, future events or otherwise. Any person/ party intending to provide finance/ invest in the shares/ businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. This presentation is not a Draft Prospectus/Prospectus, a statement in lieu of a prospectus, an offering circular, an advertisement or an offer document under the Companies Act, 2013, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, or any other applicable law in India. This presentation is strictly confidential and may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as having been authorized by any person. Failure to comply with this restriction may constitute a violation of the applicable securities laws. Neither this document nor any part or copy of it may be distributed, directly or indirectly, in the United States. The distribution of this document in certain jurisdictions may be restricted by law and persons in to whose possession this presentation comes should inform themselves about and

• bserve any such restrictions. By reviewing this presentation, you agree to be bound by the foregoing limitations. You further represent and agree that you are located outside the United States and you are permitted

under the laws of your jurisdiction to receive this presentation. This presentation is not an offer to sell or a solicitation of any offer to buy the securities of the Company in the United States or in any other jurisdiction where such offer or sale would be unlawful. Securities may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, in to or within the United States absent registration under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended.

COMPANY OVERVIEW

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 Incorporated in the year 2012 by Mr. Bhumishth Narendrakumar Patel, Chairman and Managing Director and one of the Promoters of our Company.  Company is engaged in the pharmaceutical business involving marketing, trading and distribution of wide range of pharmaceutical formulation products.  It includes anti-biotic drugs, anti-malarial drugs, anti-allergic & anti cold drugs, analgesic/ anti-pyretic & anti inflammatory drugs, dermatology products, cerebral activator drugs, neurological drugs, gastro intestinal drugs, steroids, gynaecology drugs, calcium, multivitamins, anti-oxidants and injections.  Company offer around 125 pharmaceutical formulation products, of which around 24 products are marketed by company under own brand name, the manufacturing of which is outsourced by third parties.  Apart from pharmaceutical formulation products, we also deals in trading of active pharmaceutical ingredients (API’s) such as Levofloxacin Hemihdrate IP, Albendazol IP, Amoxicillin Trihydrate IP etc.  Its registered office, corporate office and warehouse situated at Ahmedabad (Gujarat).  As per Restated Financial statements for the nine (9) months period ended December 31, 2018 and fiscal 2018, 2017 and 2016, Total revenues were ₹ 34.50 Cr, ₹ 35.85 Cr, ₹ 23.69 Cr, and ₹ 18.63 Cr, respectively. Profit after Tax for the similar period mentioned above was ₹ 0.87 Cr, ₹ 0.86 Cr, ₹ 0.16 Cr, and ₹ 0.10 Cr, respectively.

COMPANY PROFILE

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Total turnover

• f the

Company reached to Rs. 8 crores Crossed Turnover of

• Rs. 18 crores

Crossed Turnover of

• Rs. 23 crores ”

Crossed Turnover of

• Rs. 35 crores

Conversion of the Company from Private Limited to Public Limited Company. Incorporation

• f the

Company in the name of “Earum Pharmaceutic als Private Limited”

KEY EVENTS / MILESTONES

FY 2014 -15 FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2019 FY 2012 5

13 States Registered & Corporate Office OUR PRESENCE

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Our Footprints

PRESENCE

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MARKETING OF FINISHED FORMULATIONS OF OWN BRANDS THROUGH DISTRIBUTION NETWORK TRADING OF PHARMA RAW MATERIALS AND API’S

BUSINESS ACTIVITIES

THIRD PARTIES MANUFATURING THROUGH CONTACT MANUFACTURING TRADING OF GENERIC FINISHED FORMULATIONS (OWN AND OTHER’S BRANDS)

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PRODUCT

SEGMENT PRODUCT RANGE

ANTI-BIOTIC EROCLAVE–625 Tablets EROPOD- 100/200 Tablets EROCEFUX- 250/500 Tablets EROTHRO-250/500 Tablets EROFLOX-OZ Tablet EROFLOX-200 Tablets EROFIXIME–200 Tablets/IV EROFIXIME- OZ Tablets EROFIXIME–OF Tablets EROFIXIME–AZ (lb) Tablets EROPOD – CV Tablets EROFIXIME- CV Tablets EROLEV–OZ Tablets EROLEV-500 Tablets/IV EROFLOX-OZ Sussp. EROCLAVE Forte Dry Syrup EROCLAVE Dry Syrup EROFIXIME Dry Syrup EROPOD Dry Syrup EROCEFUX- Dry Syrup ANTI- MALARIAL ARTYNET-Kit Tablets ARTYNET – L Forte Tablets ARTYNET Inj. ANALGESIC / ANTI – PYRETIC & ANTI – INFLAMMATORY EROFANC-P Tablets EROFANAC-P Suspension EROFANC-SP Tablets EROFANC – MR Tablets ERODOL Gel ERODOL-SP Tablets ERODOL-MR Tablets EROHEAL Tablets EROHEAL-D Tablets ETOLCHY Tablets AALKAZ Syrup DRETIN – M Tablets MEFNAMOL-PLUS Suspension PARSITOL Tab/Suspension/IV COLCID-A Tablets

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SEGMENT PRODUCT RANGE

ANTI- ALLERGIC & ANTI-COLD TREXODINE Syrup EROCOFF Syrup EROCOFF – DM Syrup EROCOFF – LS Syrup EROZINE-5 Tablets EROZINE – M Tab/Syrup EROCOLD-TOTAL Tab/Syrup EROCOLD-TOTAL Tab/Syrup NIMICOOL Tab/Syrup NIMOLSY Tab/Syrup DERMATOLOGY KETNIZAL-200 Tablets/Soap/Cream ITRANZ-100/200 capsules FUNGIRUM-GM Cream LUIRUM-1 Cream DERMIRUM Cream CALCIUM, MULTI- VITAMINS & ANTI- OXIDANTS & GYNECOLOGY CALCYBAR-D3 Tablets/Soft Gel CALCYBAR-K27 Tablets/Soft Gel CALCYBAR Tablets/Syrup VITAJING Soft Gel/Capsules ERO D3 Tablet/Soft Gel SILVEE Capsule/Syrup LYCONY Ssoft Gel/Syrup EROHIM-XT Soft Gel/Syrup EAROVIT Tablet/ Syrup/Drops EAROVIT-FORT Soft Gel/Tablets EAROVIT-GOLD Soft Gel/Tablets EAROVIT-PLUS Soft Gel/Tablets ERO-ARGIN Sachet MANGOSE Energy Powder ORANGEY Energy Powder EROGEST-200 Soft Gel PYRINOS PLUS Tablets EROSTRON Tablets/Inj. TRENIXA–M Tablets CHOCOSTAR Powder/Syrup BEECOPS Tablets LYCYN Syrup CYPUM Syrup

PRODUCT

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PRODUCT

SEGMENT PRODUCT RANGE

NEUROLOGICAL ERO-BDF Tablets CORTDEF-6 Tablet MECOLBA–P Capsules MYCOLBA Syrup METPREDY-4/8 Tablet GASTRO INTESTINAL EROPANTA-40 Tablets/Inj. EROPANTA–DSR Tablets ERORABE–DSR Capsules ERORABE–20 Tablets ERORABE–LS Capsules MEGNAFFIN Suppository EROCID Sussp. PREBIOTICS Capsule/Sachet EAROZYM Syrup/Drops CRALSATE–O Syrup INJECTIONS & IV SET EROXON-1 Inj. EROXONE-S 1.5 Inj. EROZONE-S 1.5 Inj. EROCILIN-TZ Inj. MERRYPEN-1 Inj. ERODOL-AQ Inj. MYCOLBA-1500 Inj. MYCOLBA-PLUSE Dispo Pack Inj. ROSERED Inj. EROTHER Inj. DOLTRUM

• Inj. / Tablets

EROCLAVE Inj. EROLINE-200 IV Set EROGEST Inj.

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PRODUCT

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PRODUCT

• Mr. Bhumishth Narendrabhai Patel

Chairman and Managing Director

• He has more than 11 years of rich experience in the

Pharmaceutical Industry

• He oversees and controls the overall management of the Company
• He is a visionary entrepreneur and has played a pivotal role in

setting up the business of the Company

• Ms. Payal Bhumishth Patel

Whole Time Director

• Bachelors degree in Arts from Hemchandracharya North Gujarat

University.

• She has been on the board since inception.
• She is responsible for the managing administrative activities of our

Company. 13

OUR MANAGEMENT

Marking our Footprints in Global Market The Company has now ventured into foreign markets along with Pan India presence which aims at growing its sales and offering new products. Focus on dealing in quality standard products The Company deals in the products which meet the requisite quality standards providing the desired quality of products which helps in enhancing maintaining long term relationships with customers.

01 02

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STRATEGIES

Leveraging our Marketing skills and Relationships The Company plans to increase the customer base by supplying orders in hand on time, maintaining and renewing our relationship with existing clients. Diversified Product Portfolio The Company has diverse product portfolio across various segments. The diverse product range allows the existing customers to source majority

• f

their product requirements and also attract potential clients

03 04

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STRATEGIES

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Develop cordial relationship with our Suppliers, Customer and employees The Company generates repetitive orders with its customers and suppliers, this enables us to establish strong, mutually beneficial long-term relationships which will enable in growth and development of the business Quality assurance The ability to understand the requirements

• f the Customers and to execute the

requirement enables us to get repeated

• rders from existing customers and to

attract new customer base.

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STRATEGIES

INDUSTRY OVERVIEW

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INDUSTRY OVERVIEW

While the overall cost of manufacturing in India is likely to remain competitive, productivity in Indian pharma sites continues to be 40‐50 percent lower than the global median. This presents a significant

• pportunity

to drive efficiencies and offset some of the cost pressures. Pharmacists will grow more powerful (e.g., due to INN name) and the market may see another wave of consolidation giving rise to pharmacy chains. E‐pharmacies will see a surge with easing regulation and increasing private investment in this space, causing a dramatic shift in generic brands and substitution ability. The cost

• f

manufacturing formulations in India remains 30‐40 percent lower than other comparative manufacturing hubs such as China and Eastern Europe, notwithstanding low productivity levels. Technology‐based remote healthcare will continue to expand, significantly increasing the reach and influence of the

• doctors. The proposed UCPMP will also

move to mandatory compliance with

• versight.

Ensuring India’s self‐sufficiency in API/intermediates will be critical to maintain the competitiveness of Indian players and to ensure supply security for the local market. Investing in next‐generation APIs can help India pharma be at the forefront of these technologies and differentiate itself from other players. The government can play a crucial role to help the industry achieve self‐sufficiency in APIs / intermediates. It could explore setting up three to five dedicated clusters across the country for the API / intermediate industry. These clusters could offer benefits such as subsidized land and utilities, common resources for effluent treatment, quality assurance, etc.

PEER COMPARISON

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20

PEER COMPARISON

20 40 60 80 100 120 140 160 Earum Pharmaceuticals Limited Vaishali Pharma Ltd

Face Value (Rs.) EPS (Rs.) PE (Rs.) RONW (in %) Book Value (In Rs.) Total Income (cr.)

• Sr. No.

Particulars Face Value (In Rs.) EPS (In Rs.) P/E Ratio RONW (%) BOOK VALUE (Rs.) Total Income (Rs. In cr) 1. Earum Pharmaceuticals Limited. 10 3.50 [●] 20.34% 136.46 35.85 2. Vaishali Pharma Ltd. 10 1.41 30.96 3.87% 25.83 69.42

FINANCIAL OVERVIEW

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PARTICULARS FOR FINANCIAL YEAR (Rs. in Cr) 31-12-2018 FY 18 FY 17 FY 16 LIABILITIES Share Capital 0.31 0.31 0.11 0.11 Reserves & Surplus 4.77 3.90 1.42 1.26 Share Application Money 0.00 0.53 0.00 0.00 Net Worth 5.08 4.74 1.53 1.37 Non Current Liabilities

• Long Term Borrowings

1.60 1.50 0.56 0.39

• Deferred Tax Liabilities (Net)

0.02 0.01 0.01 0.01

• Other Long Term Liabilities

0.00 0.00 0.00 0.00

• Long Term Provision

0.00 0.00 0.00 0.00 Total Non Current Labilities 1.61 1.51 0.57 0.40 Current Liabilities

• Short-term Borrowings

5.81 5.04 1.50 1.51

• Trade Payables

13.75 8.11 4.99 4.97

• Other Current Liabilities

0.49 0.72 2.37 0.44

• Short-term Provisions

0.67 0.40 0.14 0.11 Total Current Liabilities 20.72 14.28 8.99 7.02 Total Liabilities 27.41 20.53 11.08 8.79 PARTICULARS FOR FINANCIAL YEAR (Rs. in Cr) 31-12-2018 FY 18 FY 17 FY 16 ASSETS Non Current Assets Fixed Assets

• Tangible Assets

0.36 0.19 0.16 0.16

• Intangible Assets

0.00 0.00 0.00 0.01

• Capital WIP

0.00 0.00 0.00 0.00

• Intangible Assets Under Development

0.00 0.00 0.00 0.00

• Non Current Investments

0.00 0.00 0.00 0.00

• Deferred Tax Assets (Net)

0.00 0.00 0.00 0.00

• Long Term Loans and Advances

0.00 0.00 0.00 0.00

• Other Non Current Assets

0.00 0.00 0.00 0.00 Total Non Current Assets 0.37 0.20 0.16 0.17 Current Assets

• Current Investments

0.00 0.00 0.00 0.00

• Inventories

11.08 8.29 6.54 3.61

• Trade Receivables

14.59 10.89 3.58 4.45

• Cash and Cash Equivalents

0.26 0.02 0.18 0.36

• Short-Term Loans and Advances

1.11 1.13 0.49 0.10

• Other Current Assets

0.00 0.00 0.13 0.10 Total Current Assets 27.05 20.33 10.92 8.62 Total Assets 27.41 20.53 11.08 8.79

FINANCIALS

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*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)

PARTICULARS

FOR FINANCIAL YEAR (Rs in Cr)

31-12-2018* FY 18 FY 17 FY 16 Revenue From Operations 34.50 35.44 23.34 18.57 Other Income 0.01 0.41 0.35 0.06 Total Income 34.50 35.85 23.69 18.63 Total Expenses 32.50 33.89 23.02 18.06 EBITDA 2.00 1.96 0.67 0.57 EBITDA Margin % 5.79% 5.52% 2.86% 3.05% Depreciation 0.02 0.02 0.02 0.02 EBIT 1.98 1.93 0.64 0.55 EBIT Margin % 5.73% 5.46% 2.76% 2.94% Finance Cost 0.78 0.69 0.41 0.38 PBT 1.20 1.24 0.24 0.16 PBT Margin % 3.47% 3.50% 1.01% 0.86% Tax Expense 0.33 0.39 0.08 0.06 PAT 0.87 0.86 0.16 0.10 PAT Margin % 2.51% 2.42% 0.68% 0.53%

FINANCIALS

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*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)

PARTICULARS FOR FINANCIAL YEAR 31-12-2018* FY 18 FY 17 FY 16 ROE 17.04% 18.08% 10.47% 7.15% ROCE 15.82% 17.14% 17.98% 16.71% Debt-to-Equity 1.46 1.38 1.35 1.39 Current Ratio 1.31 1.42 1.22 1.23 Net asset value per share (A/C) (Face Value of Rs. 10Each) (Based on Weighted Average Number of Shares) 164.50 241.09 142.03 172.62 Book Value Per Share (before Issue) 164.48 136.45 142.07 127.18 Basic & Diluted EPS (Before Issue, based on weighted Average no

• f shares)

28.03 49.04 14.88 12.33

FINANCIALS

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*Note – These financials are 9 months financials till Dec – 2018 (FOR FY 2018-19)

18.63 35.85 2016 2018

Revenue (Rs. in Cr.)

0.57 1.96 2016 2018

EBITDA (Rs. In Cr.)

0.10 0.86 2016 2018

PAT (Rs. In Cr.) Revenue CAGR

3 Year CAGR FY 2016-18

24.38%

104.88 %

PAT CAGR EBITDA CAGR

50.94%

3 Year CAGR FY 2016-18 3 Year CAGR FY 2016-18

10.47 17.04 2016 2018

RETURN ON EQUITY (%)

FINANCIALS

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ISSUE DETAILS

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IPO DETAILS Issue Size (No of Shares) 18,48,000 Issue Size In Rs. XX Face Value 10 Issue Price XX Post Issue No of Shares 61,67,910 Post Issue Paid Up Capital 616 Lakhs Post Issue Implied Market Cap XX SHARE HOLDING PATTERN PRE IPO POST IPO Promoter & Promoter Group 100.00 % XX% Public 0.00 % XX % BID LOT RII XX Other then RII XX ISSUE OPENS XX ISSUE CLOSES XX LISTING ON BSE SME LEAD MANAGER TO THE ISSUE Hem Securities Limited REGISTRAR TO THE ISSUE Bigshare Services Pvt Ltd RESERVATION FOR NO OF SHARES Market Maker XX RII XX Other then RII XX NUMBER OF SHARES Pre Issue 43,19,910 Post Issue 61,67,910

ISSUE STRUCTURE

To meet Working Capital requirements General Corporate Expenses

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OBJECTS OF THE ISSUE To Meet Issue Expenses

EARUM PHARMACEUTICALS LIMITED

G1, Ground Floor, V R Complex, Near Sanathal Cross Road, SP Ring Road, Sanathal, Ahmedabad-382210. Gujarat, India

• Tel. No.: +91- 022- 4906 0000

Email ID: cs@earumpharma.com Website: www.earumpharma.com 904, A Wing, Naman Midtown, Senapati Bapat Marg, Elphinstone Road, Lower Parel, Mumbai-400013, Maharashtra, India

• Tel. No.: +91- 022- 4906 0000

Email ID: ib@hemsecurities.com Website: www.hemsecurities.com

HEM SECURITIES LTD.

COMMITTED TO EXCELLENCE