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Kolkata: Indian pharma companies are poised for fast growth. Despite the 50% punitive tariffs on Indian imports to the US, many pharma companies of this country are enjoying a reprieve as they manufacture generic drugs and export to that country. Here we take a comparative look at Rubicon Research and Zydus Lifesciences to find out how they are faring vis-a-vis the lucrative US market.
Pharma companies that have a focus on innovation and strong export markets are set to do well. Pharma exports from India has exceeded $50 billion in the last financial year (FY25). Rubicon Research and Zydus Lifesciences are two important names in this domain. Rubicon is focusing on the US market; so is Zydus Lifesciences.
There are significant differences between the business models of the two companies. Rubicon Research has a focus on highly regulated markets such as the US. In the last financial year, this company earned 98.49% of its revenue from the US. Rubicon Research can boast of gross margins of more than 70% by staying focused on complex and low-competition specialty products. But Zydus Lifesciences is an integrated life sciences company. Its competence lies across the whole value chain -- from research to product development, from manufacturing to marketing. Zydus Lifesciences ploughs 7–8% of its yearly revenue in R&D. It is the fifth biggest generic drug company in the US market and about 47% of its income originates in the US market.
In terms of revenue Zydus Lifesciences is about twice as big as Rubicon Research. In FY25, the revenue of Zydus Lifesciences stood at Rs 2,32,41 crore, while that for Rubicon Research it was Rs 12,842 crore. But the growth rate of the latter was more than 2.5% times that of Zydus Lifesciences -- 50.4% versus 19%. Data also showed that between FY23 and FY25, Rubicon Research clocked a growth of 75.89%.
In FY25, Zydus achieved an operating profit margin (EBITDA) of 30.4%. Rubicon clocked an EBITDA margin of 20%. The margin of Zydus came from Indian formulations and consumer wellness. Rubicon had a different course -- it registered a loss in FY23. The red turned into black in FY24 and earned a PAT of more than Rs 134.30 crore.
Rubicon is not putting almost all its eggs in the US basket and is also trying to enter markets in the UK and Canada. Zydus Lifesciences is increasing its footprint across its specialty products, biologics CDMO, and MedTech offerings. It has an ambitious plan to launch more than 30 products this financial year.
Both companies operate under the strict USFDA regulations. Also any pressure on the pricing front is this market can lead to unstable earnings of both companies. There is another risk in this market and that it legal challenges and patent enpiry.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, INVITs, any form of alternative investment instruments and crypto assets.)
