Marksans Pharma Ltd- Analysis

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Since the company largely manufactures in India and export its exports via its subsidiaries, it would be more meaningful to look at the consolidated numbers. Headquartered in Mumbai, Marksans Pharma Ltd is engaged in the research, manufacturing and marketing of generic pharmaceuticals(formulations) and focused on the regulated market and grown majorly via acquiring international companies. A larger percentage of revenue now comes from the acquired subsidiaries.  The co. derives more than 95% of its revenue from the developed market. The company’s product includes – soft gelatin capsules & tablets in niche segments. Developed markets have much higher per capita spending on healthcare than India or developing countries.  

The management of the company has repeatedly emphasized about the niche & expertise required to manufacture soft gel capsules. According to the company’s annual report the price erosion in the soft gelatin capsule segment is only 50-60 percent against 80-95 percent in the tablets and capsules segment, following patent expiry.

In terms of product portfolio about 31% of company’s revenue comes from Pain management vertical followed by 18% from Anti-diabetic, 13% from cough & cold, followed by Gastrointestinal, CNS, CVS etc

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Earlier the company used to do contract manufacturing for Pharma MNC but there has not been any mention of the same in the last 2 annual reports. Seems like they have exited this business.

In terms of product segment split, the split is equal of 50:50 in OTC & Rx varying 5%+/- here and there. 

The management keep setting growth target for themselves and is growth hungry but not at the cost of profitability.

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Shekhar Yadav

Shekhar Yadav

It was only during the third semester in Engineering that Shekhar overheard a Gujarati guy in his class discussing stocks. After a few discussions with him, he realized that this was what he wanted to do in his life.
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