Cases

Assessing the Investment Opportunity for an Organisation Manufacturing Bulk Drugs in a Niche Segment

Challenge

The client was a passive stakeholder in a bulk drug-manufacturing organisation and had performed poorly in the past. Regular investments of capital had yielded poor returns. The bulk drug manufacturer developed a revival plan and asked for additional investment by the partner, i.e. our client.

The top management requested UC to evaluate the revival plan and to express an opinion on the feasibility of additional investment to support the revival plan.

Our Approach 

To evaluate the feasibility of the investment opportunity, UC adopted the following approach:

  • Conducted a plant visit and assessed the manufacturing capabilities
  • Conducted secondary and primary research

    1) Analysed sales trends of formulation products based on the bulk drugs manufactured - Growth/ key customers

    2) Analysed imports/exports of the products (derivatives) and their bases

    3) Analysed price trend and impact of regulation on prices

    4) Assessed competition – capability, entry barriers, future plans etc.

    5) Established customer concerns, while dealing with the bulk drug manufacturer

  • Reviewed the revival plan – assumptions, projections and financials based on detailed understanding of the market
  • UC mapped each product – projections vs. market realities
  • Independently defined scenario and indicative financials – turnover/ PBT/ working capital.

Impact

The client received an objective opinion on the feasibility of additional investment.