A strong pipeline of products; customer loyalty and trust; and cost control and efficiency are the main factors responsible for a strong financial showing from Junior Market-listed pharmaceutical company Indies Pharma. This is the view of founder and CEO Dr Guna Muppuri, who was commenting on the company’s nine months unaudited financial results ending July 31, 2023.

Gross revenues for the nine-month period increased by 8 per cent to $787 million compared to the same period in 2022 while gross profit saw a substantial 18 per cent increase, reaching $555 million.

Muppuri credits this performance to customers who trust the Indies Pharma brand and have been comfortable with its quality and standards since the inception of the business.

“It all ties to everybody from the end user to the dispensing pharmacist and the physicians who are writing our prescriptions,” he said. “They are quite happy and pleased with our product quality. The presentation and the pricing is very important. We’re making the drugs available and affordable.”

“That is what is contributing to this organic growth even though we have not added any major new product line to the business,” he added. “We will never compromise anywhere in terms of the quality and also the presentation and also appeal to the end user.”

The latest financial results also detailed a strong balance sheet with a strong asset base remaining stable at $2.2 billion and total liabilities decreasing by 4 per cent to $982 million, reflecting improved financial stability.

Shareholders’ equity increased by 3 per cent to $1.18 billion, demonstrating growth in value. Although there was a slight decrease in earnings per share for the nine-month period in 2022 ($0.13/unit), the company remained profitable.

Despite paying substantial dividends, improved profitability is driving the increase in shareholders’ equity, noted Muppuri.

“Our dividend payment has always been more than double of what we committed in our prospectus,” the CEO commented. “We have been paying 65 to 67 per cent of net profits as dividends. If you look at our balance sheet, now…even though we pay such a big dividend, the profitability of the company is making us increase our equities.”

Increase in gross profit has also been attributed to cost control and efficiency. Muppuri insists that Indies Pharma places a strong emphasis on being cost-conscious. Management, including the CEO and COO, is hands-on in monitoring expenses and educating employees about cost containment.

“That is where we are very, very vigilant,” he emphasised. “Remember we are a public company. There is public money in it.”

The company limits spending on marketing and advertising to focus on increasing profitability and ensuring costs don’t burden end-users but still finds cost-effective ways to ensure the visibility of their product line.

“The focus has to be on the field, the visibility of the product line, the continuous reminders to the physician community and the pharmacist community,” the CEO explained. “You may not understand the amount of direct outreach programmes we have [delivering products] directly to the hands of the patient by way of participating in many initiatives as a good corporate citizen.”

“Every other health camp in the country on an average must have our product line directly reaching the customers, the patients and the users at no cost to them,” he continued. “That product loyalty is priceless to us.”

He noted that these strategies “benefit the people…contain the cost and…make sure our product reaches the deeper trenches all over the country.”

Commenting on an $805-million bond attained in 2020 towards “growth capital” that remains on the books as the company pursues growth “through the organic development and approval of two new drugs at the USFDA for the United States market”, Muppuri conveyed that Indies Pharma is making significant progress toward gaining Food and Drug Administration (FDA) approval for these drugs, with a targeted approval date set for November. The CEO also highlighted that their patent challenge passed without contest, which is seen as a positive development.

Despite a significant increase in operating expenses, net profit for the third quarter increased by 16 per cent to $84 million.

With the quarter seeing a 13 per cent increase in revenues, reaching $300 million, and gross profit increasing by 18 per cent to $215 million, Muppuri is upbeat on the future.

He mentioned that Indies Pharma has 53 products submitted for approvals, which are overdue for registration due to a backlog in approvals attributed to the pandemic’s impact on the Ministry of Health’s operations.

Even a partial approval of these products will significantly impact the company’s revenue because operational expenses have reached a plateau, the CEO pointed out. He indicated that the company is closing the fiscal year in October and anticipates registrations in the first quarter of the following year, which will directly and positively impact the second-quarter results.

“I believe we should have some results because we’re going to close this fiscal year in October, which is next month and we are anticipating registrations at least by the first quarter of next year that will directly impact the second quarter results for next year,” Muppuri anticipated. “So yes, the answer is we have a powerful pipeline in the immediate short distance from us.”