Nicholas Piramal India Limited
May9, 2001
Innovations Continue
Nicholas Piramal is one pharma company, which has a big penchant of growing through mergers, acquisitions, joint ventures and it has successfully done so in the past one decade. Its acquisition of a majority stake in Rhone Poulenc and a subsequent decision to merge is clearly going to create a good value in the long run. The company is stepping into an interesting phase now and is worth a re-look. More details follow in the report.
** Inside The Report **
Business Model & Development *
Financials *
Valuations *
Business Model & Development
Formulations continue to be the core business of NPIL consisting 75% of the revenues. Vitamin A and premix constitute about 13% of the business followed by diagnostics having 11% share of the total business. As a strategy, NPIL has decided to discontinue the generics business contributing only 1% to the revenues. The sales composition for FY01 has been indicated in the following chart:

NPIL has a leadership position in clinical chemistry segment in the area of diagnostics. The company has installed 150 Hitachi make analysers in India. This business had a temporary setback during FY01 due to exit of businesses of Stryker and G-II companies.
The vitamin A business suffered during the year due to reduction in customs duty leading to cheaper imports and reduced demand from the poultry segment. The company is developing new avenues of increasing the usage in the areas of speciality molecules and perfumery chemicals.
Formulations- a thrust area
As per ORG, The domestic formulation market was placed at Rs. 14155.1 Cr. in the year 2000 compared to Rs. 12804.3 Cr. showing 10.5% improvement. However, this growth rate was lower than the previous year growth rates of 15% on an average. During the year, 1157 new products were launched in different therapeutic segments, contributing Rs. 309.7 Cr. (2% of the total market).
NPIL has reported...