Interview | The secret behind the doubling of profit for this Mumbai drug maker

Pharmaceutical companies are always under pressure as they are in a sector that is highly regulated and at the same time, highly competitive.

This has been more intense in the active pharma ingredient (API) space as the business of generic drugs is getting increasingly commoditised, and the market prices are highly volatile. Sustaining growth, therefore, has become a big challenge even for large companies.

Some small and medium players with a niche market approach, however, can beat the trend.

Mumbai-based Supriya Lifescience (SLL) raked two times the profit in the latest December quarter compared to a year earlier. CNBC-TV18 spoke to Dr Saloni Wagh, Wholetime Director, SLL, to ask how the tide turned for the company.

The ₹500 crore company makes active pharmaceutical ingredients, the primary input for making drug formulations, a business where the margins are highly volatile. The net profit margin of the company ranged between 12.27% to 21.90% in the last five years (2019 to 2024), while the industry margin swinged between 0.1% and 14.25% during this period.

Wagh highlighted three strategic changes: focus on niche therapeutic areas and strong entry-barrier products with predictable business, reduce reliance on volatile markets like China and add most potential regulated markets for sales, and a new management team of professionals.

“We want to beat the trend by pursuing our niche market approach with additional capabilities in product innovation and manufacturing and (are) also following a complete backward integration model,” the 29-year-old Wagh, daughter of the company’s founder Satish Wagh, said.