Bajaj Healthcare gains on foraying into opiate processing biz

Bajaj Healthcare advanced 3.55% to Rs 353.05 after the company said that it has received two letters of award for the manufacture of Alkaloids/APIs from Government of India.

The drug maker has been awarded two tenders for manufacture of concentrated poppy straw (CPS) and alkaloids/active pharmaceutical ingredients (APIs) from unlanced poppy capsules along with straw through CPS-reg and opium gum from the Government of India (GOI), Department of Revenue, Office of Chief Controller, Govt. Opium & Alkaloid Factories.

The first letter of award is for the manufacture of alkaloids & APIs from processing of 500 MT of unlanced poppy capsule along with straw on an annual basis.

The second letter of award is for the manufacture alkaloids & APIs from processing of 100 MT of opium gum on an annual basis.

Bajaj Healthcare (BHL) is the first ever private player in India to be awarded a tender for opiate processing, which till date was a highly regulated & government owned business. This foray into new line of business will open up a new stream of revenue, which shows immense growth potential, as BHL is currently the sole player for government allocated opiate processing on a long-term basis.

The company plans to execute both these tenders at their API manufacturing unit located at Savli, Gujarat, India. The APIs will be manufactured under highly regulated conditions & under strict adherence to protocols prescribed by the Government of India.

The unit is well placed to cater to all mandated quality checks and controls, with capacity enhancement capabilities. The tender is expected to bring an overall margin accretion to the company mainly on account of better capacity utilization of the existing plant. The derivate API's and extracts are normally used in a wide range of pharmaceutical applications.

Anil Jain, joint managing director, Bajaj Healthcare, said It is with great pride I would like to announce that BHL has successfully ventured into the highly regulated category of opiate processing for the Government of India.

We have been awarded two tenders for the supply of opium derived alkaloids & APIs to the GOI, under long term contracts and expect successive orders under similar tenders, to scale up to processing of approximately 6,000 MT of poppy straw & opium gum in the next 5 years.

The Indian Opiates market holds good potential, and the receipt of this order opens the doors to a new business vertical with better margins. The order is a part of our strategy towards building our portfolio of opiates and accessing strong capabilities in this segment."

Bajaj Healthcare a leading manufacturer of APIs, intermediates and formulations. It has a strong presence globally in countries like Europe, USA, Australia, Africa, Middle East and South America.

The company's standalone net profit declined 17.90% to Rs 17.47 crore despite a rise in sales 32.93% to Rs 175.71 crore in Q4 FY22 over Q4 FY21.

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