From humble beginnings as a contract manufacturer for industry leaders, this company has come a long way. Now, the company is strategically transitioning from a B2B model to a B2B2C approach, offering a diverse array of healthcare solutions. They are focusing on branded segments like Petcare, Nutrition, and Cosmetics. They have set ambitious targets, aiming for a robust 25-30% CAGR growth between FY24 to FY26, while maintaining a healthy EBITDA margin of 12-15%. Currently trading at a multiple of 25x FY24 earnings, the stock presents an enticing opportunity, considering its strong growth prospects.
About the company
Incorporated in 1987, Fredun Pharmaceuticals Ltd (Mcap 370 Cr) manufactures & exports healthcare and pharmaceutical products. The company started as a contract manufacturer for big pharma companies. The product basket includes multiple therapeutic classes such as anti-diabetics, anti-retroviral and anti-hypertensive. The company is one of the subsidiaries of Fredun Group.
About the Management
The main people behind FPL are Dr. Daulat Medhora and Mr. Nariman Medhora. They’ve worked in the pharmaceutical industry for more than 30 years, focusing on creating new medicines. Mr. Fredun Medhora, who leads the company, has been in this business for over ten years. He is the son of Dr. Daulat Medhora (Mother) and Mr. Nariman Medhora (Father)
Important Highlights from the Last 5 Annual Reports
FY19:
- Investing heavily into developing the latest molecules
- Adding new countries & registration of brands to fuel growth
- Around 300 registrations in various in the next 2 years
- Installing high-speed automatic machines for production and packing departments to strengthen core operations and manage cost structure.
FY20:
- Plans laid out for the next 5 years
- Latest WHO cGMP certifications for both new units of Ointment & Pellets
- Continuous investments in infrastructure
- Focusing on adding new molecules
- Several R&D projects for new products and improving existing production efficiencies
- FDA approvals for new departments and successful registrations in other countries.
FY21:
- By FY23, achieving economies of scale in all production lines
- Transformation from B2B to B2C
- Launching Generics, Pet Product lines, Nutritional, and Cosmeceutical products.
- Received WHO cGMP certificates for manufacturing pellets and topical creams and gels.
FY22:
- New registration approvals for existing products
- Growth in the generics segment in India
- Order pipeline at 300% of current inventory
- Launched 24 products across various therapies in FY22 with 210 products planned by mid FY23
- Received FDA Registration approvals from the Philippines MOH
- Tied up with a Company in UAE for tech transfer and manufacturing
- Targeting markets in UAE, West & Central Africa, and SEA countries
- Launched brands like FREOSS, Fredun Nutrition, and Bird n Beauty in various markets
- Transforming from B2B to a B2C company with a growth target of 25% to 27% in FY23.
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Disclaimer: This article is provided for informational purposes only and should not be considered as an investment advice
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