Emcure Pharma IPO - A Deep Dive into the Company's Strengths

Key Highlights:

• Emcure Pharma has robust R&D facilities
• The company has diversified manufacturing capacity

Indian pharma major Emcure Pharmaceuticals Ltd is launching its initial public offering on 3rd July. The IPO’s issue size is Rs 1,952 crores at the upper price band, and it consists of a fresh issue of equity shares and an offer for sale. Emcure Pharma enjoys a strong presence in India, Europe and Canada.

Competitive strengths of Emcure Pharma

As per the red herring prospectus, the company believes it has the following strengths:

• Well-placed to leverage its position in the domestic market

The company has a long-standing market presence and has successfully grown its business since 1995 when it began focusing on Indian domestic branded generics. Its strong position in a number of therapeutic areas, such as gynecology, cardiovascular, blood-related, pain and analgesics, and oncology/anti-neoplastic, has been driven by its differentiated product portfolio and first-to-market product launches.

Its specialist prescriptions contributed 70.67% of its total prescriptions for MAT February 2024, the highest share among the 20 largest pharmaceutical companies in India.

• Demonstrated capabilities of building brands

Emcure Pharma has demonstrated strong capabilities and a proven track record in building brands. Six of its brands were ranked among the 300 highest-selling brands in the IPM in terms of Domestic Sales for MAT FY 2024. In addition, 16 of its top 20 brands were each ranked among the three highest-selling brands in their respective therapeutic areas in the IPM in terms of domestic sales for MAT FY 2024.

• Large, diversified, and fast-growing product portfolio in international markets

Emcure Pharma has an established presence in international markets, which it believes is a solid complement to its domestic business and presents substantial opportunities for growth. The company sells its portfolio of products internationally in over 70 countries, with Europe and Canada currently being its primary international markets.

The company has also launched its biotherapeutic products and chirally pure products in many countries, including Brazil, Mexico, Russia, Algeria, Saudi Arabia and South Korea.

• Strong R&D capabilities driving differentiated portfolio of products

Emcure Pharma has strong in-house R&D expertise, which has allowed it to develop a differentiated portfolio of pharmaceutical products. This has given it a competitive advantage in the markets in which it operates. As of 31st March, 2024, it had 548 qualified scientists, of which 11 hold post-doctoral degrees, 48 hold Ph. Ds, 391 are postgraduates, and the remaining are graduates.

The company has five R&D facilities in India. It has also established dedicated teams for new product development, including complex oral solids, injectables, complex generic APIs and biotherapeutics, technology transfer and life cycle management.

• Extensive and diversified manufacturing capacity

The company has 13 manufacturing facilities across Maharashtra, Gujarat, Sikkim, Karnataka, and the union territory of Jammu and Kashmir. Its facilities can produce pharmaceutical products in a wide range of dosage forms. Its ability to manufacture its own APIs and formulations has also allowed it to attain a significant degree of vertical integration.

Wrapping it Up

Emcure Pharma’s IPO will close on 5th June. Go through the red herring prospectus for a detailed view of the company and its other aspects. Seek professional help if you need assistance with investing.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.