Indian Pharmaceutical Sector Overview
► The Indian pharmaceuticals market increased at a CAGR of 12.79 % in 2015 from US$ 6 billion in 2005, and is expected to expand at a CAGR of 15.92 % to US$ 55 billion by 2020.
► The Indian pharmaceuticals market is the third largest in terms of volume and thirteen largest in terms of value, as per a report by equity master.
► Branded generics dominate the pharmaceuticals market, constituting nearly 70 to 80 % of the market.
- Research and development (R&D)
- Manufacturing of branded, generic and branded generic drugs
- Manufacturing APIs
- Laboratory testing and clinical research
Opportunities and Threats for Pharma Sector in India
Introduction to Granules India
Granules – Analysis
Geography – Wise Revenue Breakup
Risk Mitigation Employed by Granules
► The Company has received regulatory approvals from major regulatory agencies, such as the U.S. FDA, Australian TGA,Canadian TPD and German Health Authority.
► As being a B2B company the customers of Granules conduct 4-5 audits each month (which are more stringent than USFDA) unlike the B to C companies which are more relaxed in handling and managing processes.
► The Company possesses three internationally benchmarked manufacturing facilities in India and one in China.
► The Company ensures strict adherence to quality management systems through robust quality processes.
► The Company possesses integrated facilities ranging from the manufacture of PFIs (strategically backward integrated through in-house API manufacture) to finished dosages (tablets).
Raw Material Risk
► The Company entered into long-term contracts with approved vendors, establishing itself as a preferred buyer.
► The Company implemented ERP, strengthening raw material planning.
► The Company is present in 60 countries.
► Plans to enhance penetration in Southeast Asia and Gulf Cooperation Council countries.
The Company proactively invested in modern effluent treatment units, curbing effluent generation to below permissible limits and targeting zero discharge status.
Business model: A strong presence across the entire value chain has transformed the Company from being an API manufacturer to a global pharmaceutical player.
Customer Centricity: Strong business associations with global pharmaceutical majors, resulting in long-term revenue visibility.
Economies of Scale: The Company’s facilities can accommodate large-scale customers with its industry-leading batch size in PFIs.
Flexibility: Being spread across the pharmaceutical manufacturing value chain enables the Company to offer customer flexibility.
Approved Facilities: Manufacturing facilities aligned with rigorous global operating benchmarks and approved by global regulatory authorities provide a wide footprint in regulated and semi-regulated markets.
Business Strategy/ Road Ahead
RESEARCH BY – SHREENIDHI PADITHAYA
About the Author
Rajat Sharma is a well known stock market analyst and commentator. He has covered Indian markets for over a decade and is regarded for consistently identifying early stage investment opportunities. Attorney by qualification, Rajat has done extensive work for improving corporate governance and disclosure standards.Follow @SanaSecurities