Solacing Healthcare Needs

Please share with us your journey of Ajanta Pharma.

Ajanta Pharma was established in 1973 as a small repackaging company. Over the decades the company has progressed in the value chain and today it has emerged as one of the leading and fastest growing pharmaceutical company in India.

Last decade has been particularly significant for the company where it has posted robust performance and built a sustainable, scalable and profitable business model. In Indian Pharmaceutical Market (IPC), Ajanta Pharma is ranked 39th as per March 2014 IMS. In India, we focus on fast growing speciality therapeutic segments of Cardiology, Dermatology Ophthalmology and in a small way on Pain Management. In all these therapeutic segments, company has signifi cantly improved its ranking over the years and commands strong equity amongst the specialists. Currently, we are ranked 5th in Ophthalmology, 13th in Dermatology and 24th in Cardiology segments. In Indian market, the company has a basket of 160 products, out of which 119 products are first-to-market in the country. Some of the products enjoy leadership position in their respective sub-therapeutic segment. A team of 2,500+ field force spread across the country briefs medical professionals about its products.

Ajanta has built an outstanding brand image in the emerging markets of Asia, Africa and CIS. Ajanta’s export business is spread across more than 30 countries and is entirely driven by its own brands in each of the markets in which it has presence. The product basket varies from country to country to make it a speciality business in each of the markets. Exports account for 67 per cent of company’s annual sales. Ajanta has a field force of 450 people located in different countries, briefing medical professionals about company’s products into those markets.

Over the last decade, we have made significant investments in R&D and today we have acquired strong skills in formulation development. We have developed robust capabilities in formulations technologies like sustained release, control release, extended release, oral dosage, liquids, ointments and eye drops. We have a dedicated team of more than 350 people working at our R&D Centre.

Ajanta has four manufacturing facilities located in Aurangabad, which are certified for current Good Manufacturing Practices (cGMP) in accordance with World Health Organisation (WHO) guidelines. Out of four facilities, three facilities are exclusively for formulation manufacturing and one facility is an API plant for captive consumption. Ajanta’s flagship facility in Paithan has approval of USFDA, UKMHRA, WHO - Geneva (prequalification), and many health authorities from different parts of the world.

APL has three subsidiaries in Mauritius, Philippines and USA. The Mauritius subsidiary with manufacturing base mainly concentrates on the African market. The subsidiary in Philippines is a marketing arm and caters the needs of Philippine market.

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The USA subsidiary is gearing up to launch the products for which we expect the approvals shortly. Ajanta has maintained a consistent track record of growth with operating income CAGR of 22 per cent and PAT CAGR of 42 per cent for the past 10 years. The company’s market capitalisation grew from `235 crore to `3,497 crore in last three years. In 2013, the company featured among Forbes Asia’s ‘Best Companies in Asia under Billion Dollars’ consecutively for second time.

What is your outlook on the Indian Pharmaceuticals Industry?

India’s pharmaceutical market grew at 6.2 per cent during FY14, with a total valuation of `75,757 crore (IMS data set). As expected, the growth remained subdued owing to many factors. The continued uncertainty on policy and regulatory front from government, increased scrutiny by regulatory bodies worldwide especially the USFDA, movement in currency rates, slowdown in the economy over the last two years, counterfeiting and many more threats are facing the industry. Ajanta has been proactive in terms of such threats and has been fairly successful in containing their adverse impact on operations. Brief us about your international business and its prospects going forward. We are an established player in the emerging markets with presence in more than 30 countries spread across Africa, Asia and CIS. Currently, Ajanta has 1,400 plus products registrations in hand and another 1,400 plus products are waiting for approval in various countries. Besides gaining market share from existing marketed products, the products awaiting approvals  will ensure sustained growth for the company in years to come. We continue to build branded generic business in select overseas markets and lay foundation for sustained growth in coming years. In USA we have fi led 23 ANDAs as on 31st March, 2014, out of which two are approved and 21 are under approval. We are expecting two to three ANDA approvals in current year and balance in next year from USFDA. Our target is to file five-six ANDAs every financial year in US market.

What is the product pipeline under development?

Our product pipeline will remain focused on the select therapeutic segments. In Indian market we are focused on Ophthalmology, Dermatology, Cardiology and Pain Management. In emerging markets, the pipeline spans wider therapeutic segments encompassing all the areas presently under focus including Anti-Malarial, Cardiology, Pain Management, Anti-biotic and Anti infective. For the US market our products in pipeline represents niche, difficult to make products where we hope to have limited competition scenario.

Would you like to comment on the current economic scenario of the country?

Reports suggest that the Indian economy has remained stable and is estimated to grow at 4.9 per cent in 2014-15. With the change of guards, we expect the economy to have a very positive impact in the coming years.

Do you see it improving going forward?

Yes certainly. Clear policies, time bound implementation and positive cooperation among various players will assist in improving the economy going forward…

What are your capex plans for FY15 and FY16?

We are doing significant capex to the tune of around `400 crore in two manufacturing facilities which are coming up in Gujarat in FY15 and FY16. Out of two facilities, one will be exclusively for regulated markets of USA, EU and WHO, and second will be for domestic and emerging markets. Apart from above, we are also expanding our R&D centre, continue to upgrade our existing facilities and invest in essential infrastructure. The entire capex is being funded from internal accruals.

What is your revenue mix and do you see it changing going forward?

Exports contributed 67 per cent of our turnover with balance 33 per cent coming from domestic business in FY14. We expect this revenue mix to continue in the similar range in coming years.

Do you see any impact with the appreciating INR on your revenues?

As I said, we have 67 per cent of our revenue coming from exports and naturally, there will be impact of appreciating INR on our revenues. However, we remain proactive by evaluating our risks and take suitable measures to mitigate the same to ensure minimum impact.

Where do you wish to see your company five years down the line?

Our sustained performance reflects the result of our undivided commitment towards brand building. Our consistent growth is the outcome of our commitment to quality, investment in R&D and manufacturing facilities, intelligent product selection and aggressive marketing in India and other geographies we operate in. We have been able to build strong brand equity across geographies space. We remain focused on select speciality therapeutic segments in India and select geographies in overseas market. We continue to stretch boundaries of excellence and building quality business on the already laid strong foundation with focus on growing sales and profitability consistently. All this will enable us to maintain the pace of growth achieved during past 10 years.