Which Companies Manufacture Pharma APIs in India?

India is a major global player when it comes to production of Active Pharmaceutical Ingredients (APIs).

APIs are critical components of medicines. Think of them like the active elements that provide therapeutic effects.

India currently contributes about 8-10% of the world's API supply.

Close to 1,500 pharma companies are involved in manufacturing and exporting APIs, ensuring a strong presence in both domestic and international markets.

This extensive network of manufacturers not only supports India's healthcare sector but also strengthens its position as a vital supplier of APIs globally, particularly for antibiotics, antivirals, and other essential drugs.

In this article, we look at the top Indian companies in the pharma API sector.

#1 Neuland Laboratories Ltd.

Based in Hyderabad, Neuland Laboratories focuses on making complex and niche APIs for important medical areas, including cardiovascular, central nervous system, and respiratory treatments.

In the fiscal year 2024, Neuland did well, with revenues reaching Rs 15.6 billion (bn), the highest in its history while profit shot up to Rs 3 bn.

In just 5 years, the company has doubled its revenue while profit has shot up more than 15x. The improved performance could be attributed to the company's efforts to boost its manufacturing capabilities and grow its API range.

Neuland is now making waves with new projects, especially in peptide APIs and custom manufacturing services (CMS). Peptide APIs are drugs made from short chains of amino acids, which are becoming more popular for treating cancer and other serious diseases.

For the quarter ending June 2024, Neuland reported a total income of Rs 4.4 billion. The company's net profit during this period came in at Rs 977.9 million.

During the quarter, the company's specialty APIs like Dorzolamide and Donepezil, alongside prime products like Mirtazapine, Levetiracetam, and Escitalopram, had a notable performance.

Going forward, the company expects peak growth momentum in FY26, driven by new manufacturing facilities and commercial launches.

To know more, check out Neuland Laboratories financial factsheet.

#2 Marksans Pharma Ltd.

Founded in 2001, Marksans Pharma has made a significant mark in the pharma industry by focusing on the development, manufacturing, and marketing of APIs, formulations, and over-the-counter (OTC) products.

The company operates across several therapeutic areas, including pain management, cough and cold remedies, and gastrointestinal treatments. It has a strong presence in regulated markets such as the US, UK, and Australia.

In recent years, the company has made significant investments, including the establishment of a new greenfield manufacturing plant to meet the growing demand for APIs in regulated markets.

Additionally, Marksans completed the acquisition of Time-Cap Laboratories, a US-based pharmaceutical company. This move is expected to strengthen its presence in North America and open up new market opportunities.

For the quarter ended June 2024, Marksans Pharma reported an all-round performance with the drugmaker's net profit shooting up by 26% to Rs 891 million.

Even after the acquisition of Teva Pharma in 2023, Marksans Pharma remains debt free.

Going forward, the company's management anticipates better growth, aided by expectations of a stable demand situation and new product launches.

For more, check out Marksans Pharma financial factsheet.

#3 Dr Reddy's Laboratories Ltd.

Established in 1984, Dr Reddy's Laboratories has become a leading force in the pharma industry, renowned for its diverse range of APIs and finished dosage forms.

The company's expertise spans several therapeutic areas, including oncology, gastroenterology, and cardiovascular treatments.

Dr Reddy's is actively expanding its capabilities with the recent establishment of a new oncology API facility in Vizag. This new facility aims to support the company's growing presence in the oncology sector.

Additionally, the company is making significant progress in developing biosimilars and complex generics, particularly in its biologics API division.

With nearly no debt, Dr Reddy's has shown impressive financial performance, delivering a 24.4% compound annual growth rate (CAGR) in profit over the past five years.

FY24 was an excellent year for the company. Its consolidated revenue, operating profit, and net profit increased 12%, 15%, and 24% respectively, over FY23.

Apart from growing the core business of generics, the company invested in businesses of the future under the three spaces of consumer health, digital therapeutics, and access to novel molecules.

Recently, Dr Reddy's has joined hands with the global FMCG giant, Nestle, to form a joint venture (JV) company to bring nutraceuticals to consumers in India.

It has also entered into an exclusive partnership with Sanofi to market and distribute its vaccine brands in India. This gives the company a strong presence in the vaccine market in India.

The company entered the UK consumer health market with the launch of its allergy medication, Histallay and launched Bevacizumab, its first biosimilar in the UK.

The management has stated that Dr Reddy's number one priority is to reinvest in the business, both in the drug pipeline as well as in building businesses of the future. The company's strong balance sheet provides financial flexibility to implement all its plans.

To know more, check out Dr Reddys Laboratories' financial factsheet.

#4 Cipla Ltd.

Founded in 1935, Cipla is known for its expertise in generic formulations and its strong presence in the API market. The company produces APIs for respiratory, cardiovascular, and anti-retroviral treatments.

Some of the most popular brands of the company are Nicotex, Cofsils, and ORS. It has 47 state-of-the-art manufacturing facilities where it manufactures generics and APIs.

Over the years, a growing share in high-value products and strong growth in API business in emerging markets such as India and South Africa have supported Cipla's profit growth.

Some of the company's recent investments include expanding its API manufacturing plant in Maharashtra to meet the growing demand for respiratory drugs and developing inhalation APIs for respiratory disease management.

Cipla plans to further strengthen its business by a multi-pronged strategy. It's focusing on new product development.

Moreover, it entered into a strategic partnership with Sanofi India to distribute Sanofi India's Central Nervous System (CNS) product range.

Cipla is also looking at acquisitions, which has already proved successful for the company in the past.

Finally, to expand its market reach, it's following the point-of-contact (POC) model, leveraging its network of doctors, clinics, and nursing homes to improve its sales.

To know more, check out Cipla's financial factsheet.

#5 Lupin Ltd.

Lupin is a prominent player in pharma formulations and API manufacturing, particularly renowned for its focus on treating chronic diseases such as cardiovascular conditions and diabetes.

It has a comprehensive product portfolio, which it manufactures in its 15 manufacturing facilities across the world.

The company also has 6 state-of-the-art API facilities, and 7 R&D facilities.

Lupin's products are spread across various therapeutic areas including cardiovascular, diabetology, asthma, pediatrics, and central nervous system.

In the past 5 years, the company's revenue have grown at a CAGR of 5.4% on account of the company's well-diversified portfolio.

Lupin also staged a good turnaround with a positive net profit from a negative Rs 15 bn in loss three years ago.

Going forward, Lupin has a healthy pipeline of around 20 new product launches planned for FY25, aiming for 20-30% growth.

The company plans to complete three biosimilar filings and launch ten novel complex pipeline products in India by 2028.

It is also expanding its retail footprint by partnering with e-commerce, organised retail and institutional businesses.

For more information, check out Lupin's financial factsheet.

Snapshot of Pharma API Companies in India

Here's a table showing the above companies and more such names with their various important parameters.

Conclusion

While the Indian pharmaceutical industry shows significant growth potential, it's crucial to be aware of potential challenges.

Regulatory hurdles, global demand fluctuations, and intense competition could impact profitability and market share.

For investors, thorough evaluation of each company's financial health, market position, and adaptability is essential.

You can get started with the best Indian pharma stocks on the Equitymaster Screener.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...