Insights on the Indian API, Formulation and CRAMS via a recent report from o3 Capital.
Tailwinds (China+1): 10% market share switch from China can double Indian API market.
Headwinds: Rising input costs in China due to power outage + freight hike. India has high dependency.
1/n
2/n
Indian API landscape
Scale, capacity, DMF filings, focus segments/ therapy areas and leading products.
#Divis #LaurusLabs #Granules #AartiDrugs #Solara
3/n
Growth strategies adopted by API companies
- Diversifying beyond API and CRAMS into Formulations, Biologics and Nutraceuticals.
- Laurus: Forward integrated into drug development via contracts from NATCO, Citron, Dr. Reddy + foray into new markets + new segments (Biologics)
4/n
Solara - Merger with Aurora L/S triples CRAMS revenue + customer & geographic diversification + new product (ARV)
Divis - Backward integration in key products like Naproxen (70% share) - lowest-cost producer. 1200 cr Capex.
Aarti Drugs - Forward integrated into Formulations
5/n
Understanding the scale and margin profile of key API companies.
6/n
Segment snapshot: CRAMS players command higher EBITDA margins than pure API companies (28% vs 15%) and thus higher valuations.
7/n
Valuation multiples metrics of all companies in API, Formulations and CRAMS
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