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Favourable Sectoral Dynamics and Supportive Regulations Should Lend Support to Bilcare Limited
Focus on cost reduction and improvement in production efficiencies should lend support to next leg of growth. Support of regulatory environment and opportunities offered by global clinical supplies market should help Bilcare Limited achieve reasonable growth rates.
About Bilcare Limited
Bilcare Limited is a global leader and is an innovation-led packaging solutions provider, partnering with pharmaceutical industry to improve patient healthcare outcomes. Focus is on delivering effective and affordable solutions that enhance speed and quality of discovery of drug and help build and protect brands by assuring delivery of genuine medicines to patients. Bilcare PPI helps in providing innovative pharmaceutical packaging solutions, having wide range of specialty polymer films and aluminum foils principally used for packaging of solid dosage pharmaceutical products. Bilcare GCS offers global clinical material supplies for new drug discovery projects.
The company’s multiple manufacturing and R&D facilities on innovative pharma packaging solutions span across Europe, USA and Asia. These facilities and global sales force help the company reach and serve customers to 100+ countries with wide range of products and services. The company has global customer base and its customers comprise many largest global pharmaceutical companies like Bristol-Myers Squibb, Dr. Reddy’s, GlaxoSmithKline, etc.
Growth Enablers of Bilcare Limited
Sharp Focus on Pharmaceutical Sector
Bilcare Limited has shifted and overhauled business processes so that it can adapt to changing times and exceed expectations of customer by offering innovative pharma packaging products. In FY20, the company divested overseas subsidiaries in last financial year, helping the company reduce overall liabilities by INR2000+ crores, which is ~75% of group debt. This was part of the company’s debt restructuring plan. Overseas subsidiaries assets were into certain non-core activities including credit card films & sleeves for FMCG packaging, dragging down the company’s value. After divesting business, the company is now more streamlined and focuses on generating value by catering to pharma sector. Indian PharmaCos have gained strength because of new world order and considering the company’s high-quality offerings, it should able to see significant growth.
Enterprising ability and research capability of pharma companies in India is getting global admiration. The company’s ability to offer value-based research solutions and patient-first focus of care & convenience should be able to lend some support to Bilcare and act as growth enablers. Child resistant, senior citizen friendly & anti-counterfeit security are some features growing in demand. Bilcare should be able to capitalise on sectoral opportunities and should be able to strengthen its position in sector. Products of Bilcare Ltd are approved & registered globally, including USA and Europe. Exports made ~25.7% of the company’s total turnover in FY22. Focus is on penetrating global reach with renewed energy and determination to grow exports.
Industry Opportunity
Global blister packaging market touched US$22.7 billion in FY21. In long run, market should compound at 5.8% to reach US$32.2 billion during 2022-2027. Blister packaging means pre-formed plastic packaging which comprises of a cavity that is made using a thermoformed plastic and a paper or aluminum foil back. This packaging displays a significant part of content to consumers, while saving it from heat, UV rays, humidity and contamination. As a result of this, it eliminates requirement for cartons and supports in reducing packaging costs.
Pharmaceutical packaging market was valued at ~$71.0 billion in 2018 and it is projected to compound at ~6% during FY19-FY29. Therefore, an estimated valuation of market should $149.3 billion by 2026. This impressive growth in market is likely to be contributed by emerging markets such as India, China, Brazil, Russia, and Turkey. This is because healthcare continues to become more accessible.
According to Care Ratings, over 49% of paper produced in India is used for packaging purposes. Rapid growth is primarily due to pharmaceuticals and foods and beverages industries.
Bilcare Limited is expected to capitalize on significant opportunities which are expected to arise. There is a continuous series of opportunities, which should lead to innovations for improving productivity and deliverables of existing solutions. These opportunities should enhance value proposition through clinical research, development and commercialization of new products. The company with solitary focus on quality & innovation in pharmaceutical packaging has been able to match dynamic regulations & requirements. To prevent economic burden, several pharmaceutical companies continue to research and develop a novel vaccine that should support growth of pharmaceutical packaging market in India.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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