After examining some great case studies about Indian pharma companies, you would realize how much the Indian pharmaceutical industry has evolved over the years. India has some of the most innovative pharma companies in the world with much higher profitability than ever before. According to the Indian Economic Survey of 2021, India’s domestic pharmaceutical market will top the charts by reaching a total revenue of 65 billion USD by 2024.
Anticipating India’s biotechnology sector growth to 150 billion USD by 2025, the case study of Divi’s Laboratories vs Dr. Reddy‘s Labs becomes ever more important since both of them are key industry players.
Divi’s Laboratories Limited
Tagline: “Striving for leadership through chemistry.”
Company Overview
This Hyderabad-based company has been partnering with innovative firms since its inception by manufacturing generic active pharmaceutical compounds. Divi’s Labs is primarily involved in the manufacturing of highly demanded generic Active Pharmaceutical Ingredients (APIs), custom synthesis of APIs, and Nutraceutical Ingredients for potential customers across the globe.
Journey
After briefly working with Dr. Anji Reddy, founder of Dr. Reddy’s Laboratories, Dr. Divi Murali Krishna Prasad founded his own company in 1990. The Research & Development Centre used to be the core of Divi’s Lab. Soon, the company shifted its focus towards inventing cutting-edge processes to manufacture APIs and Intermediates.
From opening its first manufacturing facility in Choutuppal, Telangana in 1995 and going public with an IPO in 2003 to opening a research center in Hyderabad in the year 2010, Divi’s laboratories case study is one of its kind. Currently, it is a dominant leader known for its top-brass quality APIs among other drugs.
Business Model
One of the core differences between Divi’s Laboratories vs Dr. Reddy‘s Labs is that the former is mostly engaged in export markets. Its production facilities with a total capacity of 14000 m3 and over 400 best-in-class scientists have led to huge profitability ratios evident by the sale of thousands of tonnes of APIs to over 100 countries.
Over 2000 employees engaged in Divi’s Labs Quality Assurance and Quality Control maintain premium quality standards by frequently performing on-and-off site assessments and developing its Quality Management System. Divi’s Laboratories case study is also noteworthy since top health agencies such as the US Food And Drug Administration and European Medicines Agency regularly inspect its manufacturing facilities.
Achievements
No pharma company case study is complete without stating its recent accomplishments, following are some of Divi’s Labs’:
l CII (Confederation of Indian Industry) South Region’s Excellence Award in Environment, Health & Safety (EHS) Award 2022
l Lifetime Achievement Award 2021 by IconSWM (International Conference on Sustainable Waste Management)
l Suraksha Puraskar Award 2020 from the National Safety Council of India
l Environmental Sustainability Supplier Awards 2019 by Glaxo Smith Kline (GSK)
Dr. Reddy’s Laboratories
Tagline: “Good health can’t wait.”
Company Overview
Since its initial stages, the company started exporting to markets like Canada, the UK, and the U.S.A. Dr. Reddy’s case study is very interesting because what began just as a supplier to Indian drug manufacturers gradually became one of India’s most popular multinational pharma companies.
Today, with over 190 medications, and 60 APIs for biotech products, diagnostic kits, and drug manufacturers, Dr. Reddy’s Laboratories is one of the leading players in the Indian pharma sector.
Journey
Kallam Anji Reddy, a mentor in the Indian Drugs & Pharmaceuticals Limited founded Dr. Reddy’s Laboratories in 1984 in Hyderabad. Its pharma company case study begins with its business in 1985; one year after which Dr. Reddy’s Labs went global thanks to the export of the API Methyldopa. Due to the popularity of Omeprazole as its first manufactured product in 1991, the company established its offices in New Jersey in the late 1990s.
Dr. Reddy’s case study is incomplete without mentioning its ground-breaking introduction of Ibuprofen under its brand in the US market and consequently, experiencing much higher profitability in the Indian market. The company has not only generated over $1 billion in revenue in the mid-2000s but also provided high-quality, affordable medicines in 2016 to cancer patients in Columbia.
Business Model
Another fundamental difference between Divi’s Laboratories vs Dr. Reddy’s Labs is that the latter’s business model largely focuses on research and development alongside end-to-end production. Its business model is fruitful because its cornerstone lies in the production of bulk drugs and APIs.
A large portion of its revenue and expenses is also related to the manufacturing of various oncology and immunology-related biosimilar medicines. Dr. Reddy’s Labs not only has establishments in the US and Canada but also extends its products and services to Russia, Australia, China, Africa, Southeast Asian countries, and much of Western Europe.
Achievements
l Sustainable Corporate of the Year Award 2022
l CII Supply Chain and Logistics Excellence (SCALE) Award 2021
l Global Generics & Biosimilars Awards 2021
l CII Industrial Innovation Awards 2021
Divi’s Laboratories vs Dr. Reddy’s Laboratories: A Head-to-Head Comparison
Any marketing case study should be replete with facts and figures. Following is the statistical comparison between Divi’s laboratories vs Dr. Reddy’s Labs as per their respective financial statements and expert analysis:
| Divis Lab | FY19 | FY20 | FY21 | FY22E | FY23 |
| Revenues (in cr) | 4946.3 | 5394.4 | 6969.4 | 8276.6 | 9551.3 |
| Net Profit (in cr) | 1,353 | 1377 | 1984.3 | 2960 | 1823 |
| P/E Ratio | 33.42 | 38.33 | 48.56 | 39.49 | 45.11 |
| Compounded Sales Growth Rate (year-on-year) from FY19-FY23 | 15% | ||||
| Compounded Profit Growth Rate (year-on-year) from FY19-FY23 | 16% | ||||
| Dr. Reddy | FY19 | FY20 | FY21 | FY22 | FY23 |
| Revenues (in cr) | 15,448.2 | 17,517.0 | 19,047.5 | 21,545.2 | 23,925.4 |
| Net Profit (in cr) | 1,277 | 2,938 | 2,186 | 1,623 | 2,613 |
| P/E Ratio | 23.62 | 25.57 | 38.50 | 32.83 | 16.35 |
| Compounded Sales Growth Rate (year-on-year) from FY19-FY23 | 13% | ||||
| Compounded Profit Growth Rate (year-on-year) from FY19-FY23 | 37% | ||||
As per the Indian Economic Survey, India exported medications and pharmaceuticals stood at a worth of USD 24.44 billion in FY21. This growth is most likely to skyrocket in the next few years. We hope you have learned a great deal about the two Indian pharma giants in this Divi’s laboratories vs Dr. Reddy’s Labs’ comparative and compelling case study.
