Syschem (India) - Syschem (India)

📊 BSE: 531173 🏢 Pharmaceuticals 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment (APIs) and reported a 24% quarter-over-quarter increase in revenue for the quarter ending June 2025 compared to June 2024. However, a modest dip was noted in June 2025 compared to March 2025 due to weaker demand early in the financial year.

Geographic Revenue Split

Not disclosed in available documents, though the company targets both domestic and international markets for its API products.

Profitability Margins

Operating Profit Margin significantly decreased from 1.76% in FY2023-24 to 0.26% in FY2024-25. Net Profit Margin also fell from 1.18% to 0.1191% over the same period, primarily due to a reduction in overall profitability and increased operational costs.

EBITDA Margin

EBITDA improved in the June 2025 quarter compared to previous periods, though specific percentage margins for the full year FY2024-25 show a downward trend in core profitability as operating margins collapsed to 0.26%.

Capital Expenditure

The company is currently constructing a new manufacturing unit in Kalka, Haryana, for B-lactam antibiotics. Borrowing powers have been increased to INR 150 Crores to support expansion and business growth.

Credit Rating & Borrowing

The Debt-Equity ratio improved from 0.01 to 0.00 in FY2024-25 following the repayment of unsecured loans. However, the Interest Coverage Ratio saw a drastic decline from 2571.69 to 18.06, indicating significantly higher interest obligations relative to earnings.

⚙️ Operational Drivers

Raw Materials

Key raw materials include inputs for Amoxycillin Trihydrate, Ampicillin Trihydrate, and Cloxacillin Sodium. Specific names and percentage of total cost are not disclosed, but raw material volatility is cited as a major impact on cost structure.

Capacity Expansion

Production capacity was scaled up by 95% by the end of March 2025 and 81% by June 2025 compared to June 2024. A new plant in Kalka, Haryana, is currently under construction to further enhance capacity for cloxacillin, dicloxacillin, and flucloxacillin.

Raw Material Costs

Raw material costs are subject to high volatility. The company has initiated strategic sourcing and lean manufacturing practices to mitigate financial pressure and improve margins which were squeezed to 0.26% in FY25.

Manufacturing Efficiency

The company demonstrated enhanced operational capacity with a 95% production scale-up by March 2025. The facility in Kalka is ISO-certified and aligned with cGMP standards.

📈 Strategic Growth

Expected Growth Rate

9-12%

Growth Strategy

Growth will be achieved through the strategic expansion of the Kalka facility to produce B-lactam antibiotics (Cloxacillin, Dicloxacillin, and Flucloxacillin) under WHO-GMP guidelines. The company is also focusing on backward integration and process innovation to remain competitive against aggressive peer pricing.

Products & Services

Active Pharmaceutical Ingredients (APIs) including Amoxycillin Trihydrate, Ampicillin Trihydrate, and Cloxacillin Sodium.

New Products/Services

New products include Cloxacillin, Dicloxacillin, and Flucloxacillin, which will be manufactured at the upcoming WHO-GMP compliant facility.

Market Expansion

Targeting rising domestic and international demand for B-lactam antibiotics to contribute to India's pharmaceutical self-reliance vision.

Strategic Alliances

The company has a significant partnership with Indosol Export for transactions involving the sale and purchase of goods up to a maximum value of INR 100 Crores.

🌍 External Factors

Industry Trends

The Indian pharmaceutical sector is expected to reach US$ 100 billion by 2025. There is a notable shift toward chronic therapies such as cardiovascular, anti-diabetes, and anti-cancer treatments.

Competitive Landscape

The API industry is highly competitive with both domestic and international players offering similar products, leading to commoditization pressures.

Competitive Moat

Moat is built on ISO-certified and cGMP-aligned manufacturing facilities, backward integration, and a dedicated R&D division. These provide a quality-based differentiation, though sustainability is challenged by aggressive peer pricing.

Macro Economic Sensitivity

Highly sensitive to the performance of the Indian economy and international pharmaceutical markets, as well as medicine spending trends which are projected to grow 9-12%.

Consumer Behavior

Increasing demand for chronic therapy medicines and evolving regulatory quality expectations are driving shifts in product portfolios.

Geopolitical Risks

Risks include clinical-trial execution, drug approval delays, and global commercial practice changes in a politically and economically turbulent environment.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with WHO-GMP guidelines, cGMP standards, and ISO certifications. Regulatory requirements significantly impact product approvals and manufacturing standards.

Environmental Compliance

The company is committed to sustainable practices and reducing environmental impact across the value chain, though specific ESG costs are not disclosed.

Legal Contingencies

The secretarial audit reports compliance with the Companies Act 2013 and SEBI regulations. No specific pending court case values or major legal disputes were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Key risks include the inability to attract/retain skilled technical personnel, raw material cost volatility, and pricing pressure from disruptive business models in the branded generics sector.