Akums Drugs and Pharmaceuticals, which recently received the European Union’s (EU) stringent Good Manufacturing Practice (GMP) stamp of approval for two of its units in Haridwar, said the firm will increase its focus on growth in the European and American markets.
In an interview with Moneycontrol, Sandeep Jain, the company’s Jt. MD said that domestic demand along with the expansion abroad will ensure growth at a CAGR of 12-15 percent over the next five years.
Jain also said that discussions have begun internally for taking the company public, however, the matter is yet to be taken to the board and to foreign investors.
Akums, which is India's largest contract research and manufacturing services (CRAMS) firm, had earlier bid for the public sector pharmaceutical firm HLL Lifecare (HLL). Jain said the company is very interested in acquiring the Kerala-based company.
Akums is India’s largest CRAMS firm. After the pandemic, what has the demand for drugs from pharma firms been like?
We have seen the demand for nutraceuticals growing as the demand for products related to wellness increased after the pandemic. Our main forte is allopathy. We are looking to manufacture gummies (chewable medicines) going ahead. We are not changing our product line — the market is seeing a growth in demand.
As demand is surging in the pharma sector, what are your plans for growth in the coming five years?
We currently have a turnover of over Rs 4,000 crore. Bearing in mind the rise in demand that we are seeing in Indian pharma, we aim to more than double our business by 2028, with annual revenues touching Rs 10,000 crore. Our plan is to grow at a CAGR of 12-15 percent over the coming five years.
What would fuel this revenue growth? Is there rising demand for any specific product that you are looking at?
The first factor is the ongoing demand, which in itself is sufficient to fuel the growth. Apart from that, there’s the product pipeline we have in our research and development (R&D) department focussed on drugs that are going to be off-patent in the next two years.
Third is the expansion in foreign markets, and finally, fresh investments in gummies and injectables: these are the key factors that will fuel our growth in the coming years.
What would be the mix of domestic and international sales in the future?
We are service providers, as in, we are contract manufacturers in India. We have been focusing on the domestic market more than the international market. We aim to log Rs 1,200 crore in annual turnover from exports in five years.
Are you seeking partners in Europe for expansion in that market?
We are in regular talks with our partners abroad. Our plan to focus on Europe is based on the strength of our products abroad.
We recently got the EU’s GMP approval for one of our plants, and are awaiting approval for the other two units. Our existing clients in India also have businesses abroad. We plan to supply our products to these firms as well as across the world.
Infrastructure-wise, we aren’t ready to take our product to the (retail) market as we don’t have marketing strength. We are contract manufacturers and we aim to achieve the targeted growth without changing that.
What are your views on taking the company public?
We have a foreign investor, Quadria capital, we can comment only after we consult them. We want to go public but haven’t discussed timelines. We need to align internal strategies first for that.
We need to table this matter in our board meeting, but the ball can be set rolling only after discussing with the foreign investor.
Akums had bid for the government-owned HLL Lifecare. Any progress on that?We bid because we thought HLL would be a good acquisition. I think it is on hold right now. But whenever the government reopens the bid for HLL, we would like to participate in the same. We don’t have plans for any other acquisitions as of now.