Ajanta Pharma's 300 cr formulation facility boosts markets
New Delhi: A 1,700 crore pharmaceutical business group Ajanta Pharma from Mumbai is setting up a Rs. 300 crore new formulations facility at Guwahati as part of effort to capture future markets. It is focusing on expansion, research and development and new markets to improve its hold in the Pharma industry. The new facility is likely to go on stream before March 2017. The company's Dahej manufacturing facility will be operational by March 2018.
The company has strong presence in branded generics space in more than 30 emerging countries and generic presence in developed market like US. Its consolidated net sales for the year ended March 2016 increased by 17.2 per cent to Rs.1,728 crore from Rs.1,474 crore in the previous year. Its domestic sales worked out to 31 per cent at Rs.528 crore and international sales contributed 69 per cent to Rs.1,178 crore. Despite volatile exchange rates and scarcity in emerging markets, African markets dominated overall sales with contribution of 41 per cent to its sales and sales in Africa was at Rs.692 crore. The sales in Rest of Asia amounted to Rs.462 crore and worked out to 27 per cent of its total sales.
The company's consolidated R&D expenditure increased by 52 per cent to Rs.106.47 crore during 2015-16 from Rs.70.07 crore in the previous year. This worked out to 6 per cent of its total sales as against 6 per cent in the last year. So far, the company launched over 190 products in chronic therapies such as ophthalmology, dermatology, cardiology and pain management. It received US FDA approval for 8 products and also received tentative approval for 2 ANDAs. Its 16 more products are awaiting approval from US FDA. The company is planning to file 8-10 products every year in near future
The company has setup four facilities in Aurangabad and one facility in Mauritius. Its is now setting up new facilities at Dahej in Gujarat and Guwahati in Assam. The Dahej facility has been specially constructed for catering to the requirements of markets like USA, WHO and emerging markets. Once operational it will have capacity to manufacture annually about 1,740 million tablets, 216 million capsules and 150 million powder sachets. Facility has been built complying with US FDA, UK MHRA and WHO standards.
Ajanta scrip is currently moving around Rs.1,635 on BSE with market capitalisation of Rs.14,387 crore . The scrip touched its yearly highest level atRs.1,720 in August 2015 as against its yearly lowest level of Rs.1,103. With strong performance, the management paid handsome equity dividend of 400 per cent per share of the face value of Rs.2 each. Total dividend payout was Rs.70.40 crore.
Its net profit improved by 29.4 per cent to Rs.401 crore from Rs.310 crore and net profit margin improved to 23 per cent from 21 per cent in the previous year. EPS for the Rs.2 each share went up to Rs.45.62 from Rs.35.24. As against the equity capital of Rs.17.69 crore its reserves & surplus improved toRs.1,154 crore from Rs.823 crore, a strong growth of over 40 per cent. The company reduced its long-term borrowing to Rs.14.87 crore from Rs.33.25 crore, though its short-term borrowing are only at Rs.57.83 crore. Return on net worth worked out to 40 per cent in 2015-16 as against 43 per cent in the previous year and return on capital employed worked out 42 per cent as against 50 per cent.
The Companies country and product focused business model is helping it improve its market share in international markets. As the pharma company's priority lies in providing different products that are tailored to suit individual market needs, it has 1,400 product registrations in hand and another equal number under approval. Thus, its investment in facilities, R&D and new products is bound to enhance future growth plan.
The company is considering divestiture of its joint venture investment in Turkmenderman Ajanta Pharma Ltd in near future.