Concord Biotech Limited Company Review – Indepth strategic insights

Concord Biotech IPO Details,

Concord Biotech Limited Company Overview

Concord Biotech Limited was incorporated as ‘Servomed Pharmaceuticals Private Limited’ in Ahmedabad, Gujarat on November 23, 1984. The company changed its name to “Concord Pharmaceuticals Private Limited” in 1985. On November 7, 2001, the company became a public company with the name “Concord Biotech Limited”.  The registered and corporate office of ‘Concord Biotech Limited’ is in Ahmedabad Gujarat, India.

  • A leading global developer and manufacturer of select fermentation-based APIs across immunosuppressants and oncology in terms of market share.  
  • The company is an integrated manufacturer from formulation to API.
  • Occupies a market share of 20% across identified fermentation-based API products in 2021.
  • 200 customers in 70 countries worldwide including major countries such as the United States, European countries, Japan, and India.
  • As of March 31, 2022, the total annual installed fermentation capacity for APIs was 1,250 m3.
  • The annual installed capacity of the formulation manufacturing facility in Valthera accounted for 522.64 million units.

Concord Biotech Limited Products & Services

Concord Biotech Limited manufactures six fermentation-based immunosuppressant APIs, tacrolimus, mycophenolate mofetil, mycophenolate sodium, cyclosporine, sirolimus, and pimecrolimus. This is one of the major contributors to its revenue. As of March 31, 2022, it had 22 API products.

Concord Biotech Limited also aims to increase the sales of APIs across other therapeutic areas, especially the following:

  • Anti-infective APIs
    • Anti-bacterial APIs. The company offers four anti-bacterial APIs, including mupirocin, mupirocin calcium, vancomycin hydrochloride, and teicoplanin;
    • Anti-fungal APIs. The company offers three anti-fungal APIs, including anidulafungin, micafungin sodium, and caspofungin
  • Oncology drug APIs. The company offers six oncology drug APIs, including temsirolimus, everolimus, romidepsin, mitomycin, dactinomycin, and midostaurin.

Concord Biotech Limited Founders and Leadership team

The company is run by experienced Promoters and a qualified senior management team with significant experience in the API business.

Mr. Sudhir Vaid, is the Promoter, the Chairman, and the Managing Director of the company. He has strong experience in this industry. Before this assignment, he worked with Ranbaxy Laboratories Limited, and as a part of M/s. Sudman Consultants acted as a consultant for companies such as Plus Chemicals S.A., Lek Pharmaceuticals & Chemicals Co., and Biocon India Limited.

Mr. Ankur Vaid, one of our Promoters, the Joint Managing Director, and the Chief Executive Officer of the company. He has over 15 years of experience in the pharmaceutical industry. Mr. Ankur was involved in the development of the research and development division and contributed to the market strategy of the Company.

Suggested Reading on company insights Nykaa, mamaearth, Signature global, Hexagon Nutrition Pvt Ltd, Deltatech Gaming.

Concord Biotech Limited Financial snapshot

The company reported strong revenue from operations of INR 5,123.29 million, INR 6,169.43 million, and INR 7,129.33 million, respectively for the financial years 2020, 2021, and 2022. The top 10 largest customers of the company contribute approximately 60.20%, 48.20%, and 47.66%, respectively for the same periods. This shows the strength of the operation of the company.

Concord Biotech Limited reported a profit of INR 1,691.12 million, INR2,348.87 million, and INR1,749.29 million for the financial years 2020, 2021, and 2022 respectively. For the financial years 2020, 2021, and 2022, the EBITDA margin was 39.88%, 53.02%, and 37.82%, respectively. The company has consistently distributed dividends of more than 30% of the net income to equity shareholders over the last seven years. This reflects the financial strength of the company.

Valuation Parameters

Concord Biotech Limited has been registering strong EPS over the years. The debt-equity ratio is negligible over the years. Similarly, all other parameters such as the return on equity, ROCE, net cash flow, and profit margin look strong.  Looking at the numbers below one can invest in the company’s IPO if the valuation is good.

All amounts in INR Million
(Year ended March 31)
Total income5,435.916,307.507,363.49
Total Revenue from Operation5,123.296,169.437,129.33
Total expenses3,301.033,175.814,951.93
Profit after tax1,691.122,348.871,749.29
Earnings Per Share-Diluted16.1722.4516.72
Net Cash from Operating Activities1,548.441,668.172,074.75
Debt-Equity Ratio0.060.090.05
Return on Equity Percentage23.3%26.5%16.6%
Return on Capital employed25.7%28.5%20.5%
Profit margin33%38%24.5%
Source: DHRP document file by Concord Biotech Limited

Suggested Reading on company insights Nykaa, mamaearth, Signature global, Hexagon Nutrition Pvt Ltd, DCX System.


Indian API market looks very attractive with the push from the government on India in the “Make in India” concept. Global dependence on China is shifting to India. The Indian API market remains fragmented with several unlisted players in the market. Almost 200 companies cater to the U.S. market alone. Some of the domestic listed companies include Divi’s Laboratories Ltd., Laurus Labs Ltd., Shilpa Medicare Ltd., and Neuland Laboratories Ltd. While some of these companies are pure-play API companies such as Divi’s Labs, some are forward-integrated and manufacture formulations such as Laurus Labs.

Suggested Reading on company insights Nykaa, mamaearth, Signature global, Hexagon Nutrition Pvt Ltd.

Company Strategies and outlook:

Concord Biotech Limited is one of the preferred Indian manufacturers in API and formulation business with global accreditations. The company has a strong clientele with a strong execution capability. This has enabled the Company to develop long-term and entrenched relationships with its customers. This is reflected in the growth of the company with revenue from the operation having been growing over the years. Overall, the company is fundamentally strong and it is yet to be seen at what price the company will come up with an IPO. If the valuation is reasonable, it is worth investing in the company IPO.

Global pharmaceutical spending grew from USD 1,070 billion in 2018 to USD 1,287 billion in 2021 at a CAGR of 6.4%. The Indian healthcare market is growing rapidly. The Indian healthcare market is projected to grow at a CAGR of 8% to 10% from 2022 to 2026. India is a major supplier of generic drugs to the world and accounts for 60% of global vaccine production. The success of this growth depends on APIs and formulations. Hence Indian government is focusing on manufacturing these products domestically to reduce its dependency on Chinese imports.

This will further boost the top line of the company. China started following stringent environmental norms leading to production cuts during winters. Changes in geopolitical scenario after Rusia and Ukraine war, Covid situation, where large companies are reducing their dependencies on Chinese suppliers. These factors will further help the company in the long run.