Sai Life Sciences Limited

The promoters of Sai Life have been involved in the pharmaceutical industry for more than two decades. The company is headed by Dr. K. Ranga Raju, Chairman, who has a Ph.D. in Pharmacy from U.S.A, and the business operations of Sai Life have benefited from his long -established track record in the pharmaceutical industry and the vast industry network developed over the y ears. He is well supported by a team of qualified and experienced management team.

Sai Life is an integrated CRAMS provider offering end -to-end integrated service across pharmaceutical life cycle. Hence, the company has presence across the life cycle viz. pre -clinical drug discovery, clinical development phase, commercial manufacturing and also generic API and formulation development & supply upon the pro duct going off-patent. Preferred vendor for global innovator pharmaceutical and biotechnology companies

The categorization of preferred partners has become integral to the outsourcing process in the pharmaceutical industry. Global pharmaceutical companies usually have a formal and rigorous process for conferring preferred status on a vendor. Sai Life has been awarded ‘preferred partner’ status by globally established innovator pharmaceutical and biotechnology companies resulting in healthy flow of repeat business. The established relationships with major global players also act as

Sai Life executes contract research projects for numerous global pharma companies. The company has served more than 100 clinical stage products. The company is engaged in the entire molecular process and hence, commercialization of any of the products by its client upon clearing Phase -III would provide significant manufacturing opportunities and margin upside for the company. Growth in total operating income and profitability margins during FY20

There is consistent improvement in scale of operations with t he total operating income increasing from Rs. 700.71 crore during FY19 to Rs. 743.20 crore during FY20 backed by increase in volumes of the commercialized products. The PBILDT margin has improved from 23% during FY19 to 25% during FY20 owing to improvement in operational efficiency along with gradual absorption of fixed cost overhead with increasing scale of operations. Furthermore, the PAT margin has

The capital structure represented by overall gearing remained comfortable with below unity and improved as on March 31, 2020 as against March 31, 2020 due to increase in net worth levels on acc ount of accretion of profits to reserves. Further, the debt coverage indicators viz. interest coverage and Total Debt/GCA also remained comfortable during FY20. 1Complete definition of the ratings assigned are available at www.careratings.com and other C ARE publications

Sai Life has been strategically planning to enhance its production capabilities to provide end-to-end integrated service offerings across the pharmaceutical life cycle. The company has planned to spend Rs. 900 crore spread over 5 years till FY23. The said capex is to be funded through a mix of internal accruals, infusion of funds from PE investors and term loans. Foreign exchange fluctuation risk The company is exposed to foreign exchange fluctuation risk in view of large volume and high value t

The company is exposed to foreign exchange fluctuation risk in view of large volume and high value transactions of export and import, a phenomenon common to the players in the industry. However, the company uses derivative instruments primarily to hedge foreign exchange. The company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in

Sai Life operates in a working capital-intensive industry and the operating cycle remains moderate. However, the operating cycle of the company has improved and stood at 76 days in FY20 as against 102 days in FY19, at the back of improved inventory holding period and collection period. The company undertakes significant portion of its sales in the last quarter which resulted in high receivables as on March 31, 2020. Furthermore, the business operation of Sai L ife

Regulatory challenges have been an integral part of the pharma industry. Over the past few years, India’s drug makers have faced increased scrutiny from the USFDA. With the proportion of imports from overseas sources rising, the FDA has become more vigilant about regulatory adherences. With the Indian regulato r as well as the USFDA becoming more active about quality and price controls, challenges will persist.