Strong Revenue Growth Expected:
GIL is a pharamaceutical manufacturing company, which produces Active Pharmaceutical
Ingredients (APIs), Formulation Intermediates (PFIs) and Finished Dosage (FDs).
GIL is among the top global manufacturers of Paracetamol and Ibuprofen (APIs) and
also manufactures single and multiple - active PFIs. The company also has its own
Abbreviated New Drug Applications (ANDAs) and dossiers, which enables MNC pharma
companies to quickly enter the market instead of filing their own applications.
Leveraging its sound technological knowledge and manufacturing skills in API and
PFI, GIL has increased its thrust on Fixed dosage (FD) with intent to enrich its
basket of offerings. Backed by strong vertical integration, the increased thrust
on down-stream products will generate strong revenue growth along with robust profitability.
Company is acquiring an APIs and intermediates manufacturing company, Auctus for
Rs.1.2bn. Auctus has an impressive portfolio of APIs like Anti histamines (Levocetrizine,
Cetrizine and Doxylamine succinate), Antihypertensives (Losartan, Telmisartan, Olmesartan
and Valsartan), Antifungal (Fluconazole), Antithrombotic (Clopidrogel), Amti ulcerant
(Pantoprazole), Antibacterial (Rifaximin) and Anti convulsant (Pregabalin). It also
manufactures the intermediates for most of these products. The APIs unit is FDA
approved. For Rifaximin, it’s the only generic player to get an EU approval. These
will help GIL to improve in its product portfolio and strengthen its market presence
Granules pioneered the concept of commercializing PFIs, saving customers the need
to manufacture their own PFIs and leaving them free to focus on finished dosage
manufacture and marketing. The Company, through its PFI facilities at Gagillapur
and Jeedimetla, is a leader in manufacturing PFIs and has the world’s largest capacity.
The manufacturing facility uses high-shear and fluid-bed granulation processes with
a 6 ton batch size, the largest in the industry.
Paracetamol, also known as acetaminophen, is used to reduce body pains, headaches
and lower fevers. The current global market for the product is 104,000 tons per
annum (TPA), and is expected to grow at 2% for the next 4-5 years reaching 110,000
TPA. While the global capacity is 141000 TPA, high quality supply for the regulated
market is tight. With plans to expand its bulk drug manufacturing capacity in FY13-14E
(expected to come on-stream by FY15E) taking its total capacity to 30,000 tons (API
and PF), GIL aims to capture 27% market-share of the global market by FY17E (from
the current 15% aided by strategic external sourcing).
Guaifenesin & Naproxen:
This drug is currently being supplied to developed markets (majorly supplying to
US >50%). The growing popularity can be substantiated by GIL’s expanding order-book
and increasing capacities. Also companies is supplying the Naproxen to Canadian
markets and have recently started to US markets too showing the clear intent of
the company to expand its reach geographically.
Initiatives to boost growth:
In July 2011, GIL entered the contract-manufacturing sector by signing a JV with
Ajinomoto OmniChem and decided to form Granules-OmniChem Private Limited, a 50:50
joint venture company. The new entity has delivered high value through a unique
contract-manufacturing platform by leveraging GIL’s technological capabilities,
efficient processes, OmniChem’s extensive product portfolio and existing customers.
A Greenfield facility set up in the Pharmacity SEZ Zone in Vishakhapatnam had commence
commercial production in January 2013. As per the company, the JV had initially
focused on APIs and intermediates in the cardiovascular, central nervous system
(CNS) and oncology therapeutic sectors for patented, brand name products. The JV
also worked on second-generation manufacturing processes and has develop new chemical
entities for the future. This will help to boost company in its future domestic
and international growth.