Gujarat Themis Biosyn Limited: A Niche Player in the API Market with Strong Growth Potential

GTBL specializes in manufacturing active pharmaceutical ingredients (APIs), specifically fermentation-based products. The company holds a competitive advantage in this niche, with limited Indian competitors engaged in similar manufacturing processes. The company has exhibited substantial growth, delivering close to 20x returns in the last five years.

Product Profile:

This is an intermediate for manufacturing drug Rifampicin which is an Anti biotic used for the treatment of several types of bacterial infections, including tuberculosis, Mycobacterium avium complex, leprosy, Legionnaires’ disease, and digestive tract infections

Rifamycin O:

It is an intermediate for manufacturing drug Rifaximin which is an Anti biotic used for the treatment of traveler’s diarrhea, irritable bowel syndrome, and hepatic encephalopathy.

Revenue Breakup by Customer

Growth Drivers for GTBL
Change in Business Model:

GTBL transitioned from a contract manufacturing business to a manufacturing and sales model. This shift has improved margins, thereby increasing profitability. In 2019, their OPM was at around 18%. Currently its at 46%.

Product Diversification 

Company is introducing of 10 to 12 new products in various therapeutic areas, such as cardiac and anti-infectives. This will reduces reliance on two key products, making GTBL a more diversified pharmaceutical company.

Capacity Expansion & Market Expansion:

Investment of approximately 200 crore rupees in upcoming projects, including an R&D lab, API block, and increased fermentation capacity. The company anticipates a growth rate of 25 to 30 percent in the coming years due to these investments.

As part of their future plans , they aim to expand their market presence. They believe that Rifaximin will open up certain parts of Europe in FY24.

Debt Reduction and Financial Health:

Consistent reduction in debt, with the company currently being almost debt-free. Also, company has a robust revenue growth of approximately 31.8 percent over the last five years and the profit grew at a CAGR of about 71%.

Potential Risks
  • Dependency on two major clients, Lupin and Optics Laboratories, which accounts for most of their sales.
  • Change in CEO with Mr. Jagadish O. Kauiaigi resigning and Mr. Tapas Guha Thakurata assuming the role on January 5, 2023.
  • Though company has plans of international expansion, currently company has exposure only to domestic markets.


5 year view:

For GTBL, we expect a 30% CAGR growth in EPS in the next 5 years.

Key reasons include the strategic investments, such as a new R&D lab, API block, and expanded fermentation capacity. Also company’s shift to a manufacturing and sales model has enhanced margins.

Further the launch of 10 to 12 new pharmaceutical products and targeted market expansion with special focus on exports would drive the growth for the company in the next 5 years.

FIIs/DIIs currently hold no stake in the company and hence more FII/DII investments are expected due to the solid performance of the company which will also aid in its growth.

We estimate the stock to grow by at least 3.3 times or grow by a CAGR of at least 27% in the next 5 years.

Disclaimer: This research is for informational purposes only and does not constitute investment advice. Please do your own due diligence and consult your financial advisor before making any investments.


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