Corporate Grapevine

Published: Mar 31, 2022
Updated: Mar 31, 2022

Leader in animal healthcare product

Sequent Scientific

SSL is India’s largest animal health company – and among the top 20 globally in its field – and is backed by global investment firm, The Carlyle Group, as its promoter. The group holds a 53.02% stake in the company and the balance 46.98% is spread across 1,67,810 public shareholders. The company has 8 manufacturing facilities across Europe, Turkey, Brazil and India, with the Vizag site being India’s only USFDA approved dedicated veterinary API facility. The company generated annual revenues of $ 200 million in FY21, with two-thirds of the revenues from regulated markets

In a recent development, Sequent has completed the acquisition of a 100% stake in Nourrie Saude e Nutricao Animal Ltd (Nourrie) in Brazil through its principal operating company, Alivira Animal Health Ltd, for a total cash consideration of BRL 27 million (USD 5 million).

Nourrie’s acquisition will enable SSL to establish its presence in Brazil’s pet market, that country’s fastest growing segment. Brazil has the 4th largest pet market in the world with an estimated market size of BRL 1.8 billion, growing at 16%.

Likewise, the addition of Nourrie’s business has nearly doubled the product portfolio available to Alivira for commercialisation in Brazil, in both the nutraceutical and therapeutic product categories. Nourrie also brings a strong pipeline of 20 products under development, of which 12 are planned for launch in the next fiscal.

SWINE PRODUCT

This particular acquisition will also provide Alivira complete control over the value chain of transuin, a swine product currently being manufactured at Nourrie, which is at present the 3rd largest product in Alivira’s Brazil portfolio.

With access to Alivira’s own API manufactured in the USFDA approved plant at Vizag, and extension of the product range with upcoming registration approvals, Alivira intends to fast track growth for the transuin franchise in both the Brazil and other Latin American markets. The expansion of the swine and poultry segment will be further catalysed with nearly 5 new product launches expected in the near term.

After considering the additional recent purchase of 0.09% shares made from the open market under its portfolio management services, White Oak Capital Management Consultants LLP holds 1,24,47,490 shares of SSL, which is equivalent to 5.1% of the company’s issued capital.

In another development in the beginning of 2022, Manish Gupta, Managing Director and CEO of the company, has resigned with effect from April 21 this year. However, Mr Gupta will continue to serve as a strategic advisor to the company until July 2022, post cessation of his directorship. He had been in this position for the last eight years.

NEW M.D.

The board of directors has approved the appointment of Rajaram Narayanan as Managing Director and CEO in place of Mr Gupta for a period of 5 years, effective from April 11, 2022, subject to the approval of the shareholders of the company.

With over 25 years of experience, Mr Narayanan has a strong track record of leading revenue and profitability growth across multiple industries, including pharmaceuticals. He joins from Sanofi India Ltd where he was the Managing Director and Country Chair for India. At Sanofi, he led the strategic reorientation of its India business operations, resulting in accelerated growth in key therapies and significant transformation of its market operations.

On a consolidated basis, SSL achieved net revenues of Rs 1,029 crore during the first nine months of FY22, against Rs 999.79 crore during the same period in the previous year. However, the profit after tax has gone down substantially from Rs 80.93 crore to Rs 35.02 crore (56.73%). In the previous FY21, for the full year, the company had revenues of Rs 1,362 crore and net profit of Rs 101.61 crore. The equity capital and book value per share stand at Rs 49.67 crore and Rs 29.30 respectively.

Commenting after the announcement of the Q3 results, Mr Gupta said, “Q3 reflects the beginning of a recovery in business across both APIs and formulations. We saw a strong growth in our formulation business, which grew 18.5% on a constant currency basis, driven by a scale-up across our key markets – Brazil, India and Turkey. On the API side, we had a strong order book and dispatches. However, port congestion challenges impacted about 15% of dispatches, depressing revenue and thereby overall profitability.” Indicating the improvement in operating margins going forward, Mr Gupta said, “Our concerted efforts towards price increases have started reflecting in our financial performance and we expect to see the full benefit from Q4 FY22.

TURKISH BIZ

Sharing both his concern and optimism on the Turkey front, Mr Gupta added, “The performance in Turkey in a volatile currency environment is significant. Our robust manufacturing footprint in the country makes us extremely confident of our continuing growth in local and export market

In his concluding positive remarks, Mr. Gupta opined that “overall, we stay extremely confident of our unique, multi-pillar business model and envisage strong recovery in Q4 led by our API business and normalisation of performance across revenues and profitability in FY23.”