Interview with Shivani Wagh, Joint Managing Director, Supriya Lifescience Ltd

In this insightful interview, Shivani Wagh, Joint Managing Director of Supriya Lifescience Ltd, discusses the company's recent impressive financial performance, strategies for sustained growth, and the evolving landscape of the Indian pharmaceutical industry.

What were the key drivers behind the company's record-breaking quarterly revenue, marking a substantial 22 per cent year-on-year growth, alongside a 57 per cent surge in net profit?

The record-breaking quarterly revenue of Rs 161 crore, representing a 22 per cent year-on-year increase, and the 57 per cent increase in net profit are the outcome of various strategic initiatives and our dedication to quality and innovation. One of the key drivers of this growth is our strong emphasis on regulated markets, with exports accounting for 80 per cent of our revenues. Our ability to reliably produce high-quality products from USFDA-regulated facilities has enabled us to establish and maintain excellent partnerships with major pharmaceutical businesses.

Additionally, our focus on Contract Manufacturing (CMO) and Contract Development and Manufacturing Organisation (CDMO) services has created new growth opportunities. These services are in high demand, especially in therapeutic areas where international corporations are increasingly collaborating with us. While our initial CMO and CDMO engagements are modest, we anticipate tremendous growth as we establish ourselves as a long-term supplier to major global companies.

Another element is our strategic choice to broaden our product portfolio and decrease our dependency on the Chinese market. We have maintained good margins and delivered sustainable growth by focusing on in-house product development and manufacturing. This approach, together with our continued efforts to extend our footprint in important regulated markets, has been critical to generating revenue and profit growth.

Could you provide an overview of the product portfolio and segment-wise performance for the latest quarter?

Supriya Lifescience has established itself as a market leader in API manufacture, with a comprehensive product portfolio spanning multiple therapeutic areas. Antihistamines, anti-allergics, vitamins, anaesthetics, and asthma medications are among our primary emphasis areas. These segments remain critical to our operations and continue to operate effectively. In the most recent quarter, exports accounted for 80 per cent of our revenue, with our items sold in over 120 countries.

We have a substantial presence in regulated areas like Latin America, North America, and Europe. Our strategic objectives include increasing our presence in these markets, particularly North America and Europe, where we see tremendous growth potential. We are also working to increase our market reach by adding at least 7-8 more nations to our list by the end of this year. Segment-wise, our analgesic and anaesthetic sectors have continued to show robust performance, contributing significantly to our overall growth.

Other segments, such as anti-allergics and vitamins, have remained stable but are showing positive growth trends. To ensure long-term success, we are broadening our portfolio to include anti-anxiety and anti-diabetic drugs. This expansion reflects our commitment to addressing diverse medical needs and enhancing our market reach. By continuously assessing market demands and innovating our product portfolio, we aim to ensure sustained growth and create value for our stakeholders.

While the revenue contribution from the Europe region has consistently grown, what factors have contributed to the ongoing decline in the Asia region? What strategies does the company plan to implement to address this issue?

The decline in the Asia region's revenue contribution is a concern that we are actively addressing. Several factors have contributed to this decline, including increased competition, pricing pressures, and regulatory challenges in certain Asian markets. Additionally, the region has been more susceptible to supply chain disruptions, which have impacted our ability to deliver products consistently. To address these challenges, we are implementing several strategies aimed at revitalising our presence in Asia.

First, we are enhancing our focus on high-growth therapeutic segments that are in demand in the region, such as anti-diabetics and cardiovascular drugs. By aligning our product portfolio with the specific needs of the Asian market, we aim to capture a larger share of this market.

Second, we are investing in strengthening our local partnerships and distribution networks. By collaborating more closely with local distributors and leveraging their market knowledge, we can better navigate the regulatory landscape and respond more effectively to market demands. Lastly, we are exploring opportunities to establish local manufacturing capabilities in key Asian markets. This would allow us to reduce our reliance on imports, mitigate supply chain risks, and offer more competitive pricing. By adopting a more localised approach, we are confident that we can reverse the decline in the Asia region and achieve sustainable growth in the coming quarters.

What are the top three strategic priorities the company is currently focusing on, and are there any plans for capital expenditure in the near future?

Our top three strategic priorities are: expanding our global footprint, diversifying our product portfolio, and enhancing operational efficiency. First, expanding our global footprint remains a key priority. We are focused on deepening our presence in regulated markets such as North America and Europe while exploring new opportunities in emerging markets. This includes entering new countries and strengthening our relationships with existing customers. Second, we are committed to diversifying our product portfolio. This involves not only expanding into new therapeutic segments like anti-anxiety and anti-diabetics but also increasing our CMO and CDMO activities. By offering a broader range of products and services, we aim to meet the evolving needs of our customers and create new revenue streams.

Third, enhancing operational efficiency is crucial for sustaining our growth. We are continuously investing in advanced manufacturing technologies and process optimisation to improve our cost structure and maintain high-quality standards. This also includes our ongoing efforts to reduce reliance on external suppliers by in-sourcing critical processes. Regarding capital expenditure, we have several plans in the pipeline. We are looking to invest in expanding our manufacturing capacity, particularly in regulated markets. Additionally, we are exploring investments in R&D to support our diversification efforts and enhance our product pipeline. These investments are aimed at ensuring that we remain competitive and well-positioned to capitalise on future growth opportunities.

What is your perspective on the future outlook for the pharmaceuticals and drugs industry in India?

The future outlook for the pharmaceuticals and drugs industry in India is highly promising. India has long been recognised as a global pharmaceutical hub, and the industry is poised for significant growth in the coming years. Several factors contribute to this optimistic outlook. First, the increasing demand for affordable healthcare solutions, both domestically and globally, will continue to drive the growth of the Indian pharmaceutical industry. With its cost-competitive manufacturing capabilities and skilled workforce, India is well-positioned to meet this demand.

Second, the ongoing shift towards generic drugs and biosimilars presents significant opportunities for Indian pharmaceutical companies. As patents for many blockbuster drugs expire, the demand for high-quality, cost-effective generics are expected to rise. Indian companies, with their expertise in generic manufacturing, are well-equipped to capitalise on this trend. Third, the government’s focus on promoting healthcare access and affordability, as well as initiatives such as the Production Linked Incentive (PLI) scheme, are expected to provide a further boost to the industry. These initiatives will encourage investment in manufacturing, R&D, and innovation, which are critical for the long-term growth of the sector.