Tyche Industries

Tyche Industries is a completely debt free and cash rich company engaged in manufacturing APIs & Advanced Intermediates of API’s for anti-retroviral, anti-depression, anti-arthritic, anti-diarrheal, anti-psychotic etc.

Current market price on the date of publishing this report-: 128

Introduction

Tyche is a leading manufacturer of APIs & Advanced Intermediates of API’s for anti-retroviral, anti-depression, anti-arthritic, anti-diarrheal, anti-psychotic etc. TIL is one of the largest manufacturers in India of Glucosamine Hydrochloride and corresponding sodium and potassium salts which are mainly exported to USA and Europe.

It is very important to understand what exactly is Glucosamine in order to proceed further. So here is all about glucosamine.

What is Glucosamine?

Glucosamine sulfate (or Glucosamine for short) is a naturally occurring sugar present in and around the fluid, cushioning tissues of joints. In addition, this substance can also be found in the hard shells of shellfish.

Glucosamine sulphate and glucosamine hydrochloride are nutritional supplements. Animal studies have found that glucosamine can both delay the breakdown of and repair damaged cartilage. The results for the use of glucosamine for osteoarthritis are mixed and the size of the effect is modest.

Glucosamine is mainly used to treat diseases related to bones and joints such as:

• Osteoarthritis: Patients with osteoarthritis of the hip, spine, or knee can take Glucosamine sulfate to help relieve pain.
• Rheumatoid Arthritis: Initial studies have shown that, in rheumatoid arthritis patients, the analgesic effect of oral glucosamine hydrochloride is higher than that of placebo. However, the inflammation and the number of painful swollen joints did not improve.
• Besides, some other diseases some people may also be prescribed to use Glucosamine such as:
  • Interstitial cystitis.
  • IBD.
  • Multiple sclerosis, glaucoma.

TYCHE INDUSTRIES LTD (TIL) has developed good reputation as a quality and reliable manufacturer and exporter of API’s, Intermediates and Nutraceuticals, the company expects to develop adequate revenues from these segments in future.

The company has obtained US FDA recognition for its facilities in Kakinada, and the company has already obtained EU- GMP certification. The overseas Regulatory approvals facilitated entry of the Company into the overseas advanced regulatory markets.

Company also has a global presence across following countries.

Business products

ACTIVE PHARMACEUTICAL INGREDIENTS (APIs)

Tyche industries is into manufacturing API’s. Active Pharmaceutical Ingredient (API) is the biologically active component of a drug product (tablet, capsule, cream, injectable) that produces the intended effects.

Any drug is made up of two elements one is known as API, and the other is Excipients which are referred to as support the API. Therefore API is a very integral part to manufacture drugs.

Company manufactures following Api’s currently.

INTERMEDIATES

Pharmaceutical intermediates are chemicals compounds widely used in manufacturing various types of drug in bulk quantity also used for research and development by Pharmaceutical and biopharma companies.

Company manufactures following Intermediates currently.

CHIRAL INTERMEDIATES

Chirality is a key factor in the safety and efficacy of many drug products and thus the production of single enantiomers of drug intermediates has become increasingly important in the pharmaceutical industry. Chiral intermediates and fine chemicals are in high demand for the bulk preparation of drug substances and agricultural products. There has been an increasing awareness of the enormous potential of the use of microorganisms and microorganism-derived enzymes for the transformation of synthetic chemicals with high chemo-, regio- and enantio selectivities.

Company manufactures following different types of chiral intermediates

NUTRACEUTICALS

Nutraceuticals might be defined as substances that have physiological benefits or provide protection against chronic diseases. Nutraceuticals may be used to improve health, delay the aging process, prevent chronic diseases, increase life expectancy, or support the structure or function of the body.

Company manufactures following types of nutraceuticals

CDMO

Tyche Industries works in close association with clients and develops solutions for APIS, Intermediates and Fine Chemicals. In addition, company can also develop products from lab scale (Grams) to Plant scale (Tons) as per customer’s requirements, maintaining strict confidentiality and also provide analytical backup at all stages of the process. Last but not the least, company ensures timely delivery of the finished products.

Research and Development

The company has a full-fledged R&D Centre. It has 1 PhD’s and 33B.S.C, B. Pharmacy M.Sc. Chemists engaged on the scientific work done at the Centre. The company has developed innovative processes for its new APIs. The company is planning to introduce new API’s products after carrying extensive research and development in the therapeutic category to treat diseases namely hyperparathyroid, convulsant, asthma etc in the coming years.

The R&D center is located at Kakinada, India and is reinforced by an experienced team of PhDs and Masters in Chemistry . The chemical development team at Tyche supports: Route Development, IP Evaluation, Synthesis, Structure Elucidation, Characterisation of Impurities, Polymorphic Studies, HAZOP Study.

Financials

For the year ended March 22

• Company achieved a total income of Rs. 6642.34 Lakhs as against Rs.8298.03 Lakhs in the previous year
• Net profit stood at Rs.933.14 Lakhs against that of Rs1998.36Lakhs for the Previous Year.
• Compounded profit growth over 3 and 5 year stood at 11% and 26% respectively
• EBITDA for the year ended March 22 was down drastically to 11 crs against that of 24.72 crs last year. However we believe this to be a one time event and going forward this to get better in the coming period.
• Company is completely debt free.
• Company has highest ever cash balance of around Rs 68 crores.
• Average ROCE stands at around 20% over 5 year period.

For the quarter ended Sept 22

• Net Sales at Rs 14.71 crore in September 2022 down 22.75% from Rs. 19.05 crore in September 2021.
• Quarterly Net Profit at Rs. 2.33 crore in September 2022 down 45.07% from Rs. 4.25 crore in September 2021.
• EBITDA stands at Rs. 3.52 crore in September 2022 down 42.95% from Rs. 6.17 crore in September 2021.
• Tyche Ind EPS has decreased to Rs. 2.28 in September 2022 from Rs. 4.15 in September 2021.

Sectorial Outlook

The global pharmaceutical industry is likely to grow at a CAGR of 19.2% and the pharmaceuticals industry is estimated to reach $3201.02 billion in CY2026. The larger section of the global demography is ageing, which makes them prone to chronic illnesses, such as rheumatoid arthritis, hypertension, diabetes, and cancer. Over the next five years, the industry is expecting to launch a total of 300 new medications, with a bias toward specialised, niche, and orphan drugs. This is likely to generate $196 billion in additional expenditure, that will counterbalance the brand spending reductions of $188 billion, owing to loss of exclusivity.

The Indian pharmaceutical industry is the 3rd largest pharmaceutical manufacturing country, in terms of volume. The nation is also the largest supplier of generic pharmaceuticals in the world, accounting for 20% of worldwide supply. The Indian pharmaceutical market is now valued at $41.7 billion and by 2024, it is likely to be worth $65 billion. Investment (as % of sales) in research & development by Indian pharma companies increased from 5.3 per cent in FY12 to 8.5 per cent in FY18. In 2017, Indian pharmaceutical sector witnessed 46 merger & acquisition (M&A) deals worth US$ 1.47 billion. The exports of Indian pharmaceutical industry to the US will get a boost, as branded drugs worth US$ 55 billion will become off-patent during 2017-2020.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti- diabetes, anti-depressants and anti-cancers that are on the rise. The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

Conclusion

Tyche Industries a leading manufacturer of APIs & Advanced Intermediates mostly caters to manufacturing drugs for anti-retroviral, anti-depression, anti-arthritic, anti-diarrheal, anti-psychotic etc. It is also one of the largest manufacturers in India of Glucosamine Hydrochloride and corresponding sodium and potassium salts which are mainly exported to USA and Europe. Besides company is completely debt free and has a cash balance of around 60+ crores which is a big beneficial for the company since it can grab lot of opportunities which requires initial cash outlay and a bit delayed payback with good return on capital. Also company has solid net profit cagr of about 26% over the 5 years period. Thus put all together tyche industries is worth exploring for long term.