Investing Reflections On India

Jenburkt Pharma is in the business of manufacturing pharmaceutical formulations – in tablets, capsules, ointments etc. Its plant has been approved by 13 countries for distribution.  Its R&D focus is on lifestyle diseases including diabetes, inflammatory conditions, pain relief etc. Its objective is to create long term therapies in acute and chronic ailments. The company has reported modest growth in revenues and operating profits in the last five years – reporting about 10cr of operating profits on revenues of 56cr in the last financial year while employing no net debt to finance its operations. The business is subject to heavy regulatory norms.  It is dependent on its R&D to create new and better formulations to maintain competitiveness in an ever-evolving pharmaceutical industry.  Moreover, it is subject to high competition and pricing pressures in its generics segment.

Jagsonpal Pharma is in the business of manufacturing capsules and bulk drugs for the pharmaceutical industry – with a focus on supplying solutions for lifestyle-related diseases (diabetes, blood pressure etc.) The company hasn’t really grown its revenues over the last five years but generated consistent operating profits – reporting about 15cr in operating profits on 160cr of revenues in the last financial year.  It operated with modest debt of 15cr (as at 31 st March, 2010). The company is exposed to risks of price controls on the end products, high competition in an undifferentiated product category, falling behind on innovative and more effective drugs, and stringent supplier demands.