Engineering IT & ITeS-BPO Pharmaceuticals PREFACE| FOREWORD | EXECUTIVE SUMMARY | METHODOLOGY| CLUSTER OVERVIEW | COMPANY LISTING| SPONSORS| LAUNCH EVENT |D&B EDITORIAL TEAM Alphabetical Listing Total Employees Turnover Revenue Range Region Exported Offerings

Overview of Pharmaceutical Industry

Over the last three decades the Indian pharmaceutical industry has transformed into a world leader in the production of high quality generic drugs. According to the Ministry of Chemicals and Petrochemicals, the Indian pharmaceutical industry’s turnover is estimated to be around US$ 17 bn. India accounts for 8% of world’s production by volume; 1.5% by value and ranked 4th in the world. In terms of export value of bulk actives and dosage forms, India ranked 17th worldwide. Indian pharmaceutical products are exported to more than 200 countries around the globe including highly regulated markets of US, Europe, Japan and Australia. A new chapter began for the Indian pharmaceutical industry with the Trade-Related Aspects of Intellectual Property Rights (TRIPS), which became binding in January 2005. After the introduction of product patents in India, the domestic industry has witnessed a fresh spell of new product launches. As on December 2007, Indian pharmaceutical sector attracted around US$ 1.2 bn foreign direct investment since April 2000. 100% FDI has been allowed for manufacturing of drugs and pharmaceuticals.

The pharmaceutical industry consists of large as well as a number of small and medium enterprises. The government has reserved four items of pharmaceuticals to be exclusively manufactured by the SMEs. A large number of companies are involved in contract manufacturing and R&D. The major systems of medicines are allopathic, ayurvedic and herbal. There are numerous products in pharmaceuticals different like tablets, capsules, drops, liquids, injectables and dry powders, syrups and ointments.The future outlook for the pharmaceutical sector seems to be extremely positive. A number of acquisitions by the Indian pharmaceutical companies outside, particularly in the US and Europe, are helping Indian players to make their mark at the global level. The Indian drug companies account for over 25% of the total generic drug applications made to the FDA of US. Indian pharmaceutical companies are vying for the branded generic drug space to register their global presence and are expected to grow by around 15% in the near future. India is also fast emerging as the global hub for Contract Research and Manufacturing Services (CRAMs). As compared to Western countries, India offers a huge cost advantage in the clinical trials domain.

Cluster Insights

Cluster Insights are aimed at grasping the pulse of the small and medium enterprises operating in their pharmaceutical industry. The attempt is to chart their operational structure, business practices, future plans, etc., for which, we have considered the companies profi led in this publication.

Key characteristics of the Hyderbad pharmaceutical cluster

• The average revenue growth of the pharmaceutical companies in the last two years was around 32%.



• While 24% of the companies were relatively older having started operations prior to 1990s, the sector has continued to attract new entrants over the years and almost 26% of the companies profiled.



• 76% of the companies possess quality certifications like ISO 9001: 2000 or GMP.



• The pharmaceutical companies operated at an average capacity utilisation of 78%.



• 13% of the companies operated with two or more manufacturing facilities.



• 59% of the profiled companies have their own R&D centres.



• Most of the pharmaceutical companies cater to the anti – infectives segment.



• 54% of the companies are involved in exports.



• Around 19% of the companies generated more than 50% of their revenue from exports.



• Asia (excluding Middle East) is the most preferred destination for export of pharmaceuticals, followed by America.

Ownership Pattern

The ownership pattern of pharmaceutical companies is inclined more towards private limited companies.

• Of the total private limited companies covered, 63% fall in the turnover bracket of Rs 10 - 100 mn.



• The private limited companies operated at an average capacity utilisation of 79%.

Sub Segment

Most of the companies in the allopathic segment fall in the turnover bracket of Rs 10 – 100 mn.

• 22% of the companies’ manufactures allopathic medicines earn more than 50% of their revenue from the international market.



• The average revenue growth of the companies manufacturing allopathic medicines is 33%.

Turnover Bracket

Most the profiled companies fall under the turnover bracket of Rs 10 – 100 mn.

• 14% of the companies covered in the turnover bracket of Rs 10 – 100 mn earn more than 50% of their revenue from overseas market.



• Companies with a turnover bracket of Rs 10 – 100 mn operate at 76% of the installed capacity.



• Europe and Asia (excluding Middle East) are the most preferred destination for the companies covered in the turnover bracket of Rs 100 – 250 mn.

Growth and Future plans

The companies covered in the study expect an average revenue growth of 44% in the next two years.

• 24% of the companies expect more than 50% revenue growth in the next two years.



• Most of the companies have envisaged future plans that include entering into new markets, undergoing capacity expansion, diversifying and modernising. Around 31% of the companies are planning for capacity expansion while 24% willing to enter into new markets and rest are a mixed bag undertaking multiple plans like diversification and modernisation.

Cluster benefits and hindrances

Proper infrastructure, manpower training and adequate technology were the key benefits derived by the companies. On the other hand, availing of government subsidies were the major obstacles observed for the companies covered in the sector.