Buy Supriya Lifescience Ltd For Target Rs. 1,030 - Choice Broking Ltd
We visited SUPRIYA’s Block E at its Lote facility (in Ratnagiri, Maharashtra) and also met the senior members of the management - Dr. Saloni Wagh (MD) and Mr. Krishna Raghunathan (CFO). Block E houses large-volume, multipurpose synthesis equipment and supports complex/controlled-substance handling. The unit is compliant with global cGMP standards and has significant liquid-filling capabilities. Management highlighted strong progress in backward integration (including KSM development), semi-automated processes that enhance data integrity and readiness for customer and FDA audits.
We believe growth will be driven by new launches (3–4 in H2FY26) and CMO opportunities. Ambernath R&D ramp-up will strengthen the portfolio, while improved additional land acquisition and capacity expansion position the company for sustained 20%+ growth. Additionally, the shift towards high margin CDMO and GLP-1 intermediates will also drive margin expansion. We continue to expect to see a CAGR of 21.6%/18.9%/19.4% over FY25-28E and maintain our BUY rating with an unchanged TP of INR 1,030.
Block E: Key Features and Observations
* Large-volume, multipurpose synthesis block designed for complex and controlled-substance chemistry, with globally aligned cGMP practices.
* Gravity-flow–driven material movement, significantly reducing manual handling, minimising variability and improving process accuracy and consistency.
* Semi-automated operational setup which helps eliminate dataintegrity risks and supports smoother audit readiness.
* Equipped with liquid-filling capabilities and multiple clean-room areas which enable parallel product execution.
* Supported by expanding warehousing and utility infrastructure, strengthening both, throughput and compliance.
* Demonstrates strong regulatory preparedness with 6–7 customer audits per month and three completed USFDA inspections, reflecting confidence in systems and process controls.
Backward Integration & Raw Material Management
* Clear backward-integration roadmap, with several KSMs (Key Starting Materials) already developed in house and more progressing toward internal production, reducing reliance on external vendors.
* Robust RM sourcing strategy, balancing local and international suppliers, supported by an 80:20 principle which ensures security without overdependence.
* Strong inventory planning, maintaining 1–2 months of local RM and ~6 months for imported RM, providing insulation against supply disruption.
* Zero RM rejection, indicating tight vendor qualification, material testing and process control systems.
* Increasing IT-driven RM management and automation, aimed at improving traceability, reducing manual intervention and strengthening compliance.
* Backward integration expected to enhance margin, supply stability and regulatory agility, while preparing the company for higher-scale, complex chemistries.
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SEBI Registration no.: INZ 000160131
