Case Study Ajanta Pharma

Ajanta Pharma Ltd.

19th July 2015

Introduction

Strategic Financial Management

Submitted By:

Crew 15

Surbhi Kaushal F029

Sushant Gupta E028

Tushar Agarwal H002

Ajanta Pharma is an established player in the formulations sector of the pharma industry.

Incorporated in 1973, it has operations domestically and in many international markets. Mostly earning through exports, (a ratio of roughly 70:30 for Exports to Domestic), it has recently forayed into the US market with an already on-shelf product and 23 approvals pending before the USFDA.

The company’s main strengths stem from its manufacturing capabilities with its main formulation facility at Paithan. The same has been approved by the US FDA, health authorities of Brazil and Colombia and the UK

Ajanta Pharma’s strategy is to serve global healthcare needs through empathy, innovation and technology. To achieve this, Ajanta adopts “The Right Things at the Right Time” strategy, which emphasizes the company’s focus on existing geographies and therapeutic segments to drive its growth. It plans to make timely investments in infrastructure including R&D and manufacturing capabilities to enhance its growth and profitability.

Ajanta has a special focus on Emerging Markets and follows a strategy of its own front ends in these markets, which constitute two-thirds of its sales, with Africa accounting for 55% of Emerging Market sales and Asia and CIS for the remaining. Ajanta follows a strategy of country specific brand portfolios with a field force of 450 sales representatives. The exception to this is its presence in Malaria tenders (23% of Emerging Market sales).

Ajanta is present in Southeast Asia in the

Philippines, Vietnam and Myanmar with the key markets being Philippines (Ajanta is ranked 35th and is the fastest growing company in the Philippines). Its west Asia presence is mainly in Iraq, Jordan and Libya. Ajanta is equally strong in branded generic markets in Franco-African and Anglo-African markets which together accounts for half of Africa

Ajanta is ranked 38th in the India pharma market. The company 's USP is launching first-to-market products with (1) differentiated delivery system, and (2) a combination of existing molecules in India for better compliance. So far, Ajanta has been first to the market in 75% of its launches.

Another reason for its high revenue growth historically is product selection in high growth molecules. 85% of Ajanta’s sales come from molecules where the market is growing >15%. Going forward, management expects to grow revenue at 25% CAGR over next three years driven by (1) pipeline of 20 first-to market products and (2) the market for existing molecules is growing at 20%.

Ajanta Pharma Ltd. 19th July 2015

8

Segment

% of India Sales

Total Launched products till June '14

# of 1st time products

% of 1st time launches

No. of brands in top 3

% of brands in top 3

Ophthalmology

24

57

49

86%

17

30%

Cardiology

31

28

10

36%

6

21%