Suven Pharma – Becoming more relevant for customers…

“Crucial alliances were forged. Important investments were made. Strong associations sustained. We chose to widen our canvas. Heighten our vision”
“There is no API as of today. But we can manufacture APIs if our customers desire so”

“There is only one formulation as of today. Creating a basket of formulations for our CDMO customers could be an opportunity”
--- This is where Suven Pharma is moving to become more relevant for its customers…

It is only the penultimate intermediate until now. But straddling the phama value is the new customer mandate. Suven will be taking more wallet share of the customer by supplying the
final formulations..Industry people will understand the kind of value addition that will happen when it moves from intermediate to formulations…and its NCE molecules.. where value addition would be multiple times than that of generics..

Management has retained its guidance of
15% growth in top line and 20% plus growth in bottom line for FY21. Capex of 320 crs will be completed by Mar-21 and it has announced 600 crs capex more. This includes shifting R&D lab, technological up gradation and capacity expansion…will be funded through internal accruals…
Business profitability should be evenly balanced between three verticals– CDMO-Pharma, CDMO Non-Pharma and formulations – making Suven a full-fledged pharmaceutical solutions provider.

There are multiple growth drivers for the company.
Pharma CDMO has 4 molecules in commercial with patent protection till 2025. One molecule is in phase 3 and one more has recently entered in phase 3. Forward integration into API and formulations will provide bigger impetus to this division
Formulations has 11 ANDA in pipeline and management guides for 7-8 ANDA every year. That itself can add 200-250 crs to the bottom line in next 3 years as per my estimate.

Specialty chemicals has 2 molecules currently and will be adding two more in next 18 months.
It is currently working on 3 more in early development phase.

Rising pharma, 25% holding of Suven pharma, has a basket of 88 products currently and pipeline of 112 products..

Specialty pharma (not generic..) and specialty chemicals is the opportunity for next 5-10-15 years..
Identify good and capable management and ride it..

Finest CDMO player with highest margins and highest return ratios among peers available at 16x FY22…cheapest among the peers!!!

Discl. - No recommendation. I own the stock. 
@drprashantmish6 @punitbansal14 @unseenvalue

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