ValueEquity

Businesses I was reading about this week , things that I heard and found interesting across pharma , chemicals and IT services and more 1) Gufic Biosciences ( small but innovator DNA) - The company is at a very interesting point in their growth journey , the Huge capex phase is done in Indore , there has been validation activities also now they will be moving into commercial production , now along with this they are a very decent and innovative business from day one Lyophilisation at scale is what they have been able to do, Lyophilized + Liquid Vials + Ampoules + Microspheres + NDDS (DCB, DCS) + Depot — very few companies can run this breadth under one roof Gufic's international business historically was a distributor-led, opportunisticfiling model. The FY26 pivot is structural: we are moving to an IP-owned, complex-injectable-led market access model where Gufic holds the Marketing Authorisation, controls the IP, and monetises assets through three mechanisms — direct supply, out-licensing, and tech-transfer fees Even present in the Botox space with the cosmetic angle as well Indore Capex : Batch size economics Indore batch sizes (100K+ vials/batch) vs Industry avg (40K) = 2.5x unit economics for export (QP release cost fixed per batch, not per vial) CDMO credibility 20+ Indian pharma majors have audited or are CMO partners —this is the ultimate third-party quality validation 30% (FY26) → mgmt-guided path toward 75%+ over the medium term; each 10pp of utilization adds ~₹69 Cr of potential revenue at the ₹687.5 Cr peak-revenue midpoint, No greenfield capex for 2 years; FY27 EBITDA margin guided at 18%, with a multi-year glide path to >20% by FY30. International model shift: Gufic Ireland secured its first EU Marketing Authorization in Q4FY26, with 2 products filed across 18 EU countries in the quarter; 24 additional product/facility approvals secured across South Africa, Colombia, Portugal, Myanmar, Sri Lanka, Cambodia, Thailand and Lithuania in H1. ● GLP-1 CMO ( Hetero ) : validation batches executed for a big-pharma client's lyophilized-vial GLP-1 programme; Gufic will act purely as CMO with limited front-end India ambitions — too early to size revenue contribution, also the management quality is also really good with Pranav Choksi at the lead , CEO is very capable with very strong technical skills as well ( built lot of optionality as well ) Seems to me that things are falling in place for them and a large capex cycle is behind them and now their focus will be on getting the numbers and execution , very interesting times for this co ahead , do go through their Q4FY26 concall transcript and also do read their investor presentation ( very detailed ) 2) Coforge : Okay this is not the first time I am talking about this but the fact is I am pretty impressed with their Investor day presentation and the sheer confidence which they have spoken on the clarity of their business model and how AI is already being implemented and they are the only company I have heard so far that talks about using AI as tailwinds and not deflationary in nature , if you have the time do Listen to Sudhir Singh speak on the investor day and go through their uploaded decks that each unit and practice heads have put up , not only from a company pov , but also from a sector understanding there is a lot to learn link : investors.coforge.com/investor-day-2… 3) Not a stock or sector but a thought , how much research we do at the end of the day will not matter if we don't learn to be better executors. cycle , entry valuation , sizing and ability to sit , these are not traits that can be learnt , these are are a part of the character we already have in life and is built from our experiences around the way we have lived , but this has to be thought about , structured and tilted in the favor to win big Yes research is important , but that is half the game , the reality is we are not in the fact collection or data aggregation business ( at least I am not ) , so money is made with conviction , character and ability to generate differentiated insights and bet where the odds and equation favors , execution , execution and execution . disc: this is not investment or financial advice , I am biased in the names so take it with a bucket of salt and read the businesses yourself too

Biocon Annual report , reading this one today to see how the story is building up 1) Syngene secured the first global phase 3 trial and expanded ADC capabilities through new GMP bioconjugation , @kiranshaw in her latest interview has acknowledged the mistakes made with syngene as well as how a new management could turn around this asset in the next fiscal ( Peter Bains to Siddharth Mittal transition , I think great for the company also , but it is to be seen how they turnaround ) 2)disease burden shifts toward chronic conditions. Biologics are now central to treatment, accounting for one-third of dispensed medicines and over half of R&D investments in 2025. With 45 biologics losing exclusivity, this opens a USD 300 billion biosimilars opportunity, globally 3)R&D investment remains in the range of 7–9% of revenues, balancing innovation with financial discipline. 4) They are finally talking specifically of executing a ROCE positive growth as well Yesintek market share, Aflibercept , and Insulin Delta remains key monitorable , along with the elephant in the room , Syngene!

Business Journal Weekly Series #1 | From My Research Desk I have been thinking about starting this weekly series for quite some time - a space where I share brief notes on businesses I study, their business models, growth drivers, competitive advantages, and key risks. The biggest hesitation was always consistency. But the best way to build something meaningful is to simply begin. A big thanks to @EquityValueIn for the push and encouragement to finally start this journey. Now, let’s see how consistently I can keep this going. For the first edition, I am sharing notes on two companies that I recently studied. I have explored a few more businesses as well and will try to cover them in the upcoming editions. Starting with first one : 1/ Akums Drugs & Pharmaceuticals Ltd Akums Drugs & Pharmaceuticals is India's largest contract development and manufacturing organization (CDMO), manufacturing formulations for leading pharmaceutical companies while also operating API, branded formulations, and export businesses. Unlike branded pharma companies that depend on doctor prescriptions and marketing, Akums earns by monetizing manufacturing scale, formulation development, regulatory compliance, and long-term customer relationships. Demand remains relatively stable as pharmaceutical companies continue outsourcing manufacturing to reduce capital intensity and improve speed-to-market. However, profitability is largely influenced by plant utilization, product mix, and API prices. FY26 demonstrated the operating leverage embedded in the business. Revenue grew just 5.9% YoY to 4,359 crore, but adjusted EBITDA increased 13.3% to ₹522 crore, while adjusted PAT rose 27.3%. Q4 was particularly strong, with consolidated EBITDA margin expanding from 8.9% to 13.1%, while CDMO EBITDA margin improved from 10.6% to 14.4%. Most importantly, CDMO capacity utilization increased from ~25% in FY24 to ~43% in FY26, indicating that existing manufacturing assets are beginning to generate better operating leverage. The company invested 222 crore during FY26 toward capacity expansion, modernization, infrastructure upgrades, and EU regulatory readiness, while guiding for ~300 crore of capex in FY27. It also invested 3.2% of revenue in R&D, filed 230 dossiers, and continues to strengthen its product pipeline. Growth over the next few years could be supported by the €200 million European CDMO contract (commercial supplies expected from FY28), the Zambia JV with committed annual medicine procurement of USD 25 million during FY27–FY28, and expanding European formulation and API approvals. Why Investors should Track This Company? Akums is transitioning from a capacity-build story to a capacity-monetization story. The story no longer depends on building new plants but on filling existing facilities with higher-value CDMO work. FY26 already offers early evidence of this shift- 5.9% revenue growth translated into 13.3% EBITDA growth and 27.3% adjusted PAT growth, while CDMO utilization improved from ~25% to ~43% over two years and Q4 CDMO EBITDA margins expanded from 10.6% to 14.4%. If management can continue improving utilization while converting recent international approvals and large contracts into commercial orders, earnings have the potential to grow faster than revenue over the coming years. Key risks include regulatory compliance, API price volatility, customer concentration within the CDMO business, and execution of international expansion. Next company is... 2/ Jagsonpal Pharmaceuticals Ltd Jagsonpal Pharmaceuticals is a branded-generic pharmaceutical company operating through an asset-light model. The company outsources manufacturing to third-party manufacturers, builds brands around established molecules, and sells them through its 1000 medical representative (MR) network to doctors. Unlike manufacturing-led pharmaceutical companies, Jagsonpal does not own production facilities. Its business is built around brand equity, doctor relationships, prescription generation, and field-force execution. With business roots dating back to 1964 and incorporation in 1978, Jagsonpal is among India's oldest independent pharmaceutical companies. Over six decades, it has built relationships with 50,000+ doctors, particularly across gynaecology, orthopaedics, and paediatrics. This doctor franchise and brand recall are the core strengths of the business. The biggest opportunity currently lies in improving the productivity of its existing MR network. Management has consistently highlighted that MR productivity (PCPM numbers) remains below potential. Current PCPM (Per Capita Per Month = Total quarterly revenue ÷ Average number of MRs ÷ 3 months) stands at around Rs 2.2–2.4 lakh, while management is targeting Rs 3.0–3.5 lakh. Improving productivity from the same field-force base ( like bringing more sales from same MR base) can create operating leverage, as incremental revenue growth does not require a proportional increase in fixed costs. To improve execution, the company appointed Amrut Medhekar as COO, who brings around three decades of experience from companies such as Wockhardt, Zydus, Torrent, and Akums. His focus is on improving sales execution, MR productivity, and building a more scientific approach to doctor engagement. The company has undertaken several initiatives, including doctor-led pharmacology training for MRs, repositioning brand teams toward higher-potential brands, rationalising smaller SKUs, and restructuring incentives toward prescription generation and brand building. The portfolio optimisation led to some short-term disruption during Q3 FY26, including higher attrition, but field stability improved in Q4, with revenue growth recovering to 14.2%. Jagsonpal's top 10 brands contribute around 58% of revenue. While this creates concentration, these brands hold strong positions within their respective molecules, with most ranked among the top five brands in their categories. The company continues to launch new products across its core therapeutic segments while strengthening existing brands. The company recently acquired an 85% stake in Aequitas Healthcare for Rs 20.8 crore, funded entirely through internal accruals. The acquisition expands Jagsonpal beyond its traditional doctor-to-retail prescription model into an omnichannel specialty healthcare platform by adding an institutional hospital channel through Aequitas's 72-member team. Jagsonpal operates with strong financial discipline, supported by an asset-light model, near-100% free cash flow conversion, net working capital of around 11 days, and zero debt. Cash balance stood at Rs 191 crore as of March 2026. During FY26, the company deployed capital through a Rs 40 crore buyback, Rs 26 crore dividend, and the Rs 20.8 crore Aequitas acquisition. The buyback was completed without promoter participation. The company is also backed by private equity investors and has strengthened its management team with experienced industry professionals, bringing a more institutional approach toward execution and capital allocation. Management has indicated its intention to build an acquisition platform in specialty healthcare, with Yash Pharma and Aequitas being examples of this strategy. Key risks include dependence on prescription growth, execution challenges in improving MR productivity, brand concentration, competition in established molecules, and the ability to successfully integrate acquisitions. Why Investors should Track this company ? Jagsonpal is a different pharmaceutical story compared with CDMO or manufacturing-led businesses. The growth opportunity is linked to improving productivity of an existing brand franchise rather than adding physical capacity. Going forward, key factors to monitor will be PCPM improvement, prescription growth, performance of new launches, execution of the omnichannel strategy through Aequitas, and the company’s ability to deploy its balance sheet toward value-creating acquisitions. ________________________________________________ That's it for first edition.. ,the post is already getting a little longer than I expectted. 😄 Request you all to look at both companies from an ideation perspective. This weekly series is not a buy/sell recommendation : just my attempt to study businesses and share learnings. Would love to hear your views on which company you liked more and what I might have missed. 🙌