Marksans Pharma - With Focus On Backward Integration, Margin To Improve: HDFC Securities Initiates Coverage

HDFC Securities Retail Research

Marksans Pharmaceuticals Ltd.’s portfolio is skewed towards over-the counter segments and soft gel products mainly in the U.S. and UK markets.

Given its front-end presence in these markets, it has been able to monetise opportunities optimally. OTC segment is likely to see a stable demand with low price erosion.

Consolidated revenue grew at compound annual growth rate of 13% over FY18-22, led by the shift to front-end distribution through its subsidiaries located in U.S., UK and Australia, product launches, increased market share in existing products and increased capacities.

Marksans is primarily into exports of oral solid formulations with a special focus around OTC and soft gelatin/hard gelatin formulations.

It generates majority of its revenues from the OTC business, (~70% of total revenues), while the balance from the Rx business.

While the oral solid business is immensely competitive, it still sees opportunity to build on the base it has created by virtue of its diversified global presence and focused approach.

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