Topline Securities recently hosted Pakistan Pharma Invest 2024, where Citi Pharma Limited (CPHL), led by key speaker Mr Rizwan Ahmed, CEO of the Company, presented the details of the operation amid future strategy.
The total market size of APIs in Pakistan is around US$1.3bn, whereas the local share of APIs is US$200mn, and the rest are imported.
CPHL partnered exclusively with Murli Krishna Pharma of India to provide high-quality APIs. As per management, 15 APIs will be supplied from Murli Krishna. Of the 15 APIs, 3, including omeprazole, have been registered in DRAP (Drug Regulatory Authority of Pakistan), and the registration of the remaining 12 APIs is in process.
The company expects to finalise this Murli Krishna Pharma in 6-8 months. It expects a 20%- 30% revenue impact by FY25, while a major impact will be seen in FY26. Post FY26, the company is targeting 50% revenue growth.
The success ratio of these APIs regarding registration with DRAP is 100%, as these products have been supplied for decades in the country. The total CAPEX of this project would be US$1mn, mainly for importing some complex equipment. The installation period would be less than six months after the registration of all APIs.
The company’s gross margins are expected to improve in the coming quarters as it enters the formulation business, which usually has higher gross margins than the API segment.
The company also has a JV with Saudi Arabia to develop an API manufacturing facility. The venture will benefit the company in two ways. Firstly, CPHL will make APIs there and thus export formulations to the Saudi market. Secondly, through this venture, CPHL can supply its products to other countries where the company cannot export directly from Pakistan.
The company expects to materialise the JV with Sinopharm, one of the biggest Chinese pharmaceutical companies, to manufacture the vaccine by the beginning of next year.
Prices of Paracetamol significantly decreased in the last year, and Currently, prices hover around Rs1,100/kg vs Rs3,000/kg in the past.
Management stated that the Citi Hospital project has been delayed. However, management is more optimistic about expanding APIs and formulation businesses.
Management expects revenue growth of 20-25% in FY25 and over 50% by FY26 as these new developments will likely materialise.
Courtesy – Topline Research
