Supriya Lifescience Aims To Double Revenue To Rs 1,000 Crore By FY27 — Know Your Company
The manufacturer of active pharmaceutical ingredients is also planning a capex of Rs 100 crore in the next two-three years.
Supriya Lifescience Ltd. expects to doubles its revenue by FY27 as the maker of bulk drugs continues to diversify outside China and enters new categories, according to Chief Financial Officer Krishna Raghunathan.
"We expect 21-22% revenue growth for FY25, with a sustainable Ebitda margin of 28–30% and (are) expecting Rs 1,000 crore in top line by FY27," Raghunathan told NDTV Profit.
The manufacturer of active pharmaceutical ingredients is also planning a capex of Rs 100 crore in the next two to three years. All the capex will be done through internal accrual, and no debt will be taken for the same, the CFO said.
The company is backward-integrated—with its own supply of raw materials—in 15 products which contributed 72% of its total revenue. The company is in the process to further backward-integrate three more products in the medium term.
The bulk drug maker a leading exporter from India in key molecules with 45-50% market share in chlorpheniramine maleate, used against allergy and common cold, 60-65% market share in ketamine hydrochloride—an anaesthetic drug—and 30-40% market share in salbutamol sulphate, a bronchodilator.
"We believe in backward integration, where we do not have to rely on external supply and our customer is satisfied with us because then, he knows that there will not be any disruption in supply," said Satish Wagh, chairman and managing director at Supriya Lifescience.
Alternatives To China
Before Covid-19, China was one of the main contributors to the company's overall revenue, but after the pandemic, it diversified to Europe while still expanding in China.
"We are expanding in China, but Ebitda margins have gone down, but this is a temporary issue, as China also needs good GMP manufacturing sites. Supriya Lifescience's Lote facility was audited by China Food and Drug Administration," said Wagh.
Supriya Lifescience is working on four to five products, which will be registered in China. "These products, along with old products, will fetch us good margins, but we cannot depend on one country, so we are concentrating more on different regions like Brazil," he said.
CDMO And CMO Foray
In its third-quarter concall, the company said it will enter the contract development and manufacturing segments.
According to the management, this is the right move as the company is present across 100 countries, has a good customer base, and has regulatory approvals, said Saloni Wagh, whole-time director of Supriya Lifescience.
India is emerging as a top choice for outsourcing pharmaceutical operations throughout the value chain. This is on the basis of available expertise, proven track record in terms of contract manufacturing and ability to scale, and cost arbitrage. In short, quality with decent prices.
"Currently, CDMO does not contribute to our top line, but we expect 15-20% revenue from this segment in the next 3–4 years," she said.
Supriya Lifescience has announced a 10-year contract with a European company—DSM Firmenich—for the supply of vitamin products, which they have co-developed.
The Mumbai-headquartered pharma company will be the contract manufacturer for this product globally and will generate revenue of Rs 60–70 crore per year in the next two to three years through the product.
Capex Plans
The company plans for Rs 100 crore capex for the next two years. Of this, Rs 60-70 crore will be for their Lote Parshuram facility in Ratnagiri, where it is putting a new production block with a capacity of 300 KL. This will take the total capacity to 900 KL. CDMO/CMO, opportunities in API and advanced intermediates will be scaled up via this facility, Saloni said.
Supriya Lifescience expects tremendous growth in the existing portfolio as they have done filings in the regulated market.
The company is also entering into a new segment of dosage filings, for which it is building a facility in Ambernath. It is planning to spend Rs 60 crore for the facility over the next two years.
It plans to manufacture a new anesthetic product in the facility, in an effort to expand within the segment. The global market for the product is currently about $300 million and is growing at 4.5% CAGR for the next 10 years, Saloni said.
Currently, there is a dependence on China for this product globally, and this would be an import substitute product.
The company is targeting 20% market share in the next 2-3 years for the anesthetic product. It will set up a bottling line in Ambernath for it, with a capacity of five million bottles a year. The facility will be ready by August this year and will start contributing to top line from FY26, she said.
The company also has four new products in the pipeline for launch in fiscal 2025. These are from the anti-diabetic, anti-anxiety, and anesthetic categories.