Suven Pharmaceuticals Share Price

Suven Pharmaceuticals Limited: Fundamental Analysis of India's Leading CDMO Company

Suven Pharmaceuticals Limited is one of India’s leading contract development and manufacturing organisations (CDMOs). The company focuses on developing and manufacturing pharmaceutical ingredients and products for global innovator pharma companies. This blog will analyse Suven Pharmaceuticals' fundamentals to understand its financial health and growth prospects.

About Suven Pharmaceuticals Limited

Suven Pharmaceuticals is an Indian pharmaceutical company founded in 1989 by Mr. Jasti Venkateswarlu and Mrs. Jasti Sudha Rani. The company started by manufacturing bulk drugs and drug intermediates. Over the years, Suven has evolved into a major CDMO player serving global pharmaceutical and biotech companies.

The company operates through two business verticals – Contract Research and Manufacturing Services (CRAMS) and Specialty Chemicals. Under CRAMS, Suven provides end-to-end contract research, manufacturing, and supply services for pharmaceutical companies’ proprietary products. The Specialty Chemicals division manufactures and supplies speciality chemicals to various industrial sectors.

Suven has a global presence with manufacturing facilities in India, a formulation facility in the US, and offices in the UK, China, and South Africa. The company is listed on the National Stock Exchange and Bombay Stock Exchange in India.

As of date, Suven Pharma's share price was trading at ₹634.50.

Pharmaceutical Industry Overview

The global pharmaceutical market is expected to reach nearly $2 trillion by 2027, exhibiting a CAGR of 6% over 2020-2027. Key growth factors include a rising old population, increasing prevalence of chronic diseases, healthcare spending, and higher consumer spending power.

India’s pharmaceutical market is the third largest globally in terms of volume and 11th in terms of value. It is projected to grow at a 9-11% CAGR over the next five years and reach $65 billion by 2025.

The high growth potential makes the pharmaceutical industry attractive for investments. Leading Indian pharma companies have benefitted from increased outsourcing by global majors over the years. The CRAMS market in India reached nearly $18 billion in FY21.

As one of the leading CDMO players, Suven Pharma is well-positioned to leverage the growing opportunity in contract services and speciality chemicals. Suven Life Sciences share price, strong track record, global access and cost competitiveness make it an attractive investment option.

Suven Pharmaceuticals Limited's Competitors

Some of Suven’s major competitors in the CDMO space include:

• Sun Pharma
• Cipla
• Divi's Laboratories
• Zydus Life
• Dr. Reddy’s Labs

Suven enjoys competitive advantages like strong client relationships, compliance standards, diverse service offerings and cost efficiencies. However, competition has intensified as more players enter the contract services space.

History of Suven Pharmaceuticals Limited

Suven Pharmaceuticals Limited has over 30 years of operating history marked by several key milestones:

• 1989: The company was founded by Mr. Jasti Venkateswarlu and Mrs. Jasti Sudha Rani as a private limited company focused on manufacturing bulk drugs and intermediates.
• 1995: Suven converted into a public limited company to aid its expansion plans.
• 2000: The company entered into an agreement with NSDL and CDSL for the dematerialisation of its shares. It also secured significant export orders worth Rs 21 crores.
• 2001: Borregaard Industries Ltd, a Norwegian pharmaceutical company, acquired a 15% stake in Suven, which helped Suven gain technical expertise.
• 2004: Suven ventured into contract research and manufacturing services by acquiring US-based Synthon Chiragenics. It also established a US subsidiary called Suven Life Sciences USA LLC.
• 2007: The company issued a 1:1 bonus Suven Life Sciences share and split its equity shares from Rs 10 to Rs 2 face value.
• 2009: Suven secured multiple product patents in the US, Europe and other markets for its NCE pipeline focused on CNS disorders.
• 2019: Suven acquired assets of Rising Pharmaceuticals in the US through its JV company to bolster its formulation capabilities.
• 2022: The company raised over Rs. 300 crores through rights issue to fund capacity expansions and repay debt.

Through strategic expansions, partnerships and patents over the years, Suven has evolved into an industry leading CDMO player with global operations.

Company Profile – Strengths and Weaknesses

Strengths

• Leadership in CDMO services with end-to-end capabilities
• Advanced infrastructure and strong compliance record
• Long-standing relationships with innovative pharmaceutical companies
• Robust pipeline of patented molecules
• Strong financial performance and return ratios
• Low debt

Weaknesses

• High customer concentration risk with top 2 clients contributing 50% of revenues
• Significant competition from other CDMO players
• High working capital requirements

The Financials

Financial Metric	Value
Market Cap	₹ 16,155 Cr.
Book Value	₹ 76.0
Dividend Yield	0.16%
ROCE	32.5%
Face Value	₹ 1.00
ROE	24.5%

Shareholding Pattern of Suven Pharmaceuticals Limited

Here’s the shareholding pattern of Suven Pharmaceuticals Limited:

• Promoters: 50.10%
• Foreign Institutional Investors (FIIs): 9.54%
• Domestic Institutional Investors (DIIs): 17.24%
• Public: 23.11%

Overall, Suven has a healthy mix of promoters and institutional and public shareholders. The shareholding pattern demonstrates the company's positive investment appeal for both domestic and foreign investors.

*The shareholding data is as of March 2024 and may change over time.

Peer Comparison

Stock	P/E Ratio	ROCE %	Div. Yield
Suven Pharma	43.56	32.47	0.16
Sun Pharma	35.10	17.31	0.77
Cipla	28.05	23.08	0.57
Dr. Reddy’s Labs	17.52	26.86	0.68