The Ahmedabad-based company, which draws majority of its revenues from the contract research and manufacturing services (Crams) space, feels Japan will be a key thrust area aiding its future growth.
After consolidating its presence in the European market, Dishman Chemicals and Pharmaceuticals is gearing up for opportunities in the Japanese market.
The Ahmedabad-based company, which draws majority of its revenues from the contract research and manufacturing services (Crams) space, feels Japan will be a key thrust area aiding its future growth.
According to V V S Murthy, chief financial officer, Dishman could look forward to revenues of about $10 million in 2010-11 from Japan, mainly from the Crams space.
“About 20% growth is what we expect overall this year,” said Murthy.
Dishman is eyeing contracts from some leading Japanese firms such as Takeda Pharma. Japan is the second-largest pharmaceutical market in the world after the US.
About 75% of Dishman’s turnover of Rs 950 crore comes from Crams, and it lists innovator firms in EU such as Roche, Novartis, AstraZeneca and Sanofi Aventis as its clients.
According to Bhavin Shah, research analyst at Dolat Capital Market, Dishman has benefited by mainly catering to innovator pharma companies, rather than generic firms. “As Dishman mainly has innovators as clients, the orders are not short term and it can keep supplying till the product gets exposed to generic competition. This gives it a higher revenue visibility.”
Dishman’s contract in Crams with Belgian firm Solvay (which was acquired by the US-based Abbott Labs in 2009 for Euro 4.5 billion) is estimated to fetch the company about Rs 130 crore by FY11.
The contract is mainly for the manufacture of eprosartan mesylate which is used for hypertension, and Dishman expects about Rs 40-50 crore each quarter from this product.
An analyst from a brokerage firm in Ahmedabad says order inflows from Solvay were limited due to the buyout in 2009 and would get better this year. Murthy said that rationalisation of inventory post the economic slowdown is easing. “Most pharma giants are looking to curb costs, and will increasingly look towards outsourcing to India.”
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