WE ARE EXPANDING OUR SERVICES MODEL
WHICH SHOULD CREATE IMMENSE VALUE FOR OUR
was an outstanding year for Y22 the Company our clients our Fcustomers and ourshareholders. Once again we outpaced our performance estimates on all parameters.
We did more work we did better work and we bettered our customer relations. That forme is critical for sustaining our business growth over the foreseeable future. Ourtop-line grew by 47% on a higher base. Our EBITDA margin scaled the 50% mark despite theinflationary pressure that prevailed during the year. Our Net Profit increased by 80%.
I am immensely proud of the Suven Pharma team who have made it a habit to outdo theirprevious performance each year.
THE PROMISING DEAL
FY22 was an important milestone from our strategic investment perspective. Weliquidated one investment and got into another both of which have been very promising forSuven Pharma.
We had invested US$35 million in Rising Pharma in 2019. In FY22 Rising Pharma wasacquired by HIG we sold our entire stake to the acquirer for which we received US$41.55million in cash and a 7% stake in Rising Aggregator (a holding Company created by HIG tomanage Rising Pharma and other acquisitions that would happen in future).
We used US$ 20.50 million to acquire Casper Pharma which has a large manufacturingunit in Hyderabad dedicated to the manufacture of solid and liquid oral pharmaceuticalsfor USA and regulated markets and ready for USFDA inspection. They have filed 2 ANDA'swhich should see the light of day in the medium term. Moreover Casper has a seven-yearcontract with Rising Pharma to manufacture and supply formulations for all productsdeveloped by Rising Pharma.
In a nutshell an investment of US$35 million has given the Company US$41.55million incash a 7% stake in Rising Aggregators and 100% stake in Casper Pharma which promises tobolster our formulation vertical significantly.
To put things in perspective today as I pen this statement we have put in place threeout of the four wheels in our formulation vehicle.
Wheel 1: Our existing formulation's piece under Suven Pharma. Wheel 2: Ourstake in Rising Aggregator. The value of our stake in Rising is expected to rise over thecoming years as HIG is focused on new acquisitions to more than double the enterprisevalue of Rising Aggregators in future.
Wheel 3: Our acquisition of Casper Pharma and their contract with Rising Pharmashould generate interesting returns.
Wheel 4: We plan to manufacture KSM and API for formulation for some of ourclients. This will take some time to materialise.
When all the four wheels fit it we expect our formulations vertical to transform intoan important growth and profitability driver.
THE NEW SERVICE OFFERING
In addition to this we are expanding our services model which should create immensevalue for our customers and the Company. This strategic direction is an outcome of ourmultiple and intense interactions with the global innovator community most of whom arealso our clients. They want us to extend the runway of our services. They wish that wewalk the extra mile. For this we have contoured two prospective service options.
One forward integration servicewhere we extend our services to develop andmanufacture products further ahead in the value chain - from say one intermediate(currently) to more intermediates and KSM (Key Starting Material) and APIs andFormulations.
Two life cycle management service where we contour the prospects of working with theinnovator on a product that will genericise in future. We will develop and manufactureeverything (intermediate to formulation) for the innovator. We had been in conversationwith a couple of clients about engaging with us for these services. The prospect of movingahead on the discussion was thwarted by the pandemic and travel restrictions. We willresume the dialogue once again in the current year. I remain hopeful of some positiveresponse in this direction in the medium term.
To support this aspiration we are working on our capital investment of upgrading ourR&D and manufacturing infrastructure which should be complete in the next 18-24months.
In closing I on behalf of the Board take the opportunity to acknowledge all ouremployees customers supplier partners and shareholders for their support and faith inSuven Pharma.
|WARM REGARDS |
|VENKATESWARLU JASTI |
|MANAGING DIRECTOR |