Sudeep Pharma Limited — IPO Note

IPO Details

Company Overview

Sudeep Pharma is a technology led manufacturer of excipients and specialty ingredients for the pharmaceutical, food and nutrition industries and are dedicated to contributing to the global healthcare ecosystem. They have established a presence in both, domestic and international markets, including key regions such as the United States, South America, Europe, the Middle East, Africa, and Asia-Pacific. They leverage inhouse developed technologies for processes such as encapsulation, spray drying, granulation, trituration, liposomal preparations and blending in an effort to drive innovation in the operations.

The company is one of the largest producers of food-grade iron phosphate for infant nutrition, clinical nutrition, and the food and beverage sectors, in terms of production capacity with a combined annual available manufacturing capacity of 72,246 metric tons (“MT”), as of June 30, 2025.

It is the only company in India and one of nine companies globally with certification of suitability issued by the Council of Europe (“CEP”) and written confirmation certification for sale of calcium carbonate as an active pharmaceutical ingredient (“API”) in the European Union as of June 30, 2025. As of June 30, 2025, they have served over 1,100 customers, and have built longstanding relationships with marquee customers including Pfizer Inc, Intas Pharmaceuticals Limited, Mankind Pharma Limited, Merck Group, Alembic Pharmaceutical Limited, Aurobindo Pharma Limited, Cadila Pharmaceutical Limited, IMCD Asia Pte. Ltd., Micro Labs Limited, and Danone S.A.

Key Highlights

Objects of the Issue

Our View

Incorporated in 1989, Sudeep Pharma is a technology-driven manufacturer specializing in excipients and specialty ingredients for the pharmaceutical, food, and nutrition industries. It is among India’s leading producers of mineral-based ingredients. The company has built a strong presence across regulated markets like the US, Europe, UK, Middle East, and Latin America. It is one of the pioneers in India to introduce a product range of liposomal ingredients for nutrient absorption and stability.

The company holds strong certifications like USFDA, EXCiPACT, WHO-GMP, HACCP, FSSC, ISO, Kosher, Halal. Its market leadership is reinforced by their comprehensive product portfolio and marquee global clients. The global demand for food ingredients is expected to grow at a CAGR of 6.5% between 2024 to 2029, with demand reaching 580 billion USD in 2029.

However, risks to consider are Regulatory & Compliance Risk, significant portion of revenue is generated from a limited number of customers, segment concentration, Regional Dependence, Reliance on export markets (export sales of ~59% in Q1FY26), Acquisitions and strategic investments, reliance on third-party suppliers for the supply of raw materials, negative cash flow from operating activities in Q1FY26, High Competition.

On the financial front, the topline and bottom line marked growth from FY23-FY25 at CAGR 8% and 49% respectively. EBITDA grew at CAGR 42%. The company operated on an EBITDA margin of 39% and PAT margin of 25% at Q1FY26 respectively. Its Debt to Equity ratio improved from 0.32x in FY23 to 0.14 at Q1FY26. ROCE and ROE in FY25 stood at 30% and 28% respectively.

The issue is priced at a P/BV of 9.47 based on its NAV of Rs.62.61 as at Q1FY26 and asking price is at a P/E of ~53x if we attribute FY26 annualized earnings. The issue seems fully priced. There are no listed peers in same line of business.

Sudeep Pharma is a unique, technology driven with strong fundamentals and market leader in a niche segment company. Looking at all the factors, risks, opportunities and valuation, investors may invest with Long term horizon to the issue.

Key Financial & Operational Metrics