Sudeep Pharma IPO

It demonstrates strong financial momentum, achieving a profit Compound Annual Growth Rate (CAGR) of 49.2% from FY23 to FY25, while its revenue grew at 8% annually over the same period.

It maintains a highly reliable customer base, demonstrated by 83.17% (₹103.89 crore) of revenue in the recent quarter coming from repeat business. The average relationship tenure with its five largest customers is a stable 7.08 years.

It operates four regulatory-compliant facilities with an annual production capacity of 72,246 MT. It is prioritizing innovation, increasing R&D expense to 2.06% of revenue in the recent quarter (up from 0.91% in FY23).

It is a leading manufacturer in terms of production volume as of June 30, 2025, offering a diverse portfolio of over 100 products. It is one of the largest producers of food-grade Iron Phosphate globally, with a combined annual manufacturing capacity of 65,579 MT as of June 30, 2025. Additionally, it is one of only nine companies worldwide with CEP and WC certifications for Calcium Carbonate.

The company utilizes its manufacturing infrastructure efficiently, as indicated by a Fixed Asset Turnover Ratio of 2.65 times in FY25. It means that for every ₹1 the company has invested in fixed assets, it generates ₹2.65 revenue. This metric shows strong revenue generation relative to the total value of its fixed assets employed in the business.

It maintains a wide reach, serving over 1,100 customers across multiple regions, including valuable partnerships with 14 global Fortune 500 companies.

A limited number of clients drive a significant portion of its sales, with the largest customer accounting for 14.58% of its revenue and the top 10 customers for 42.10% of its revenue in the three months ended June 30, 2025. Loss of a key customer would severely impact financials.

The time taken to collect payments (Days Sales Outstanding or DSO) is lengthening, increasing from 79 days in FY23 to 135 days by June 30, 2025. It means the company now takes about 135 days (over four months) to collect cash from customers, which slows down cash flow and strains working capital.

It reported negative cash flow from operating activities of ₹5.48 crore for the three months ended June 30, 2025, mainly due to stocking up inventory and payments to creditors. Sustained negative cash flow could jeopardize growth plans.

It relies heavily on a few sources for materials; the top 10 suppliers supplied 65.40% of the total raw material costs in the quarter ended June 30, 2025. This high concentration creates procurement risk.

Operational efficiency regarding cash conversion has sharply increased, with the Net Working Capital Cycle Days metric at 344 days as of June 30, 2025, a significant jump from 143 days in FY23. This prolonged cycle pressures liquidity.

Three of its four Manufacturing Facilities and one of its two R&D facilities are located in Vadodara, Gujarat, making it highly vulnerable to localized social, political, economic, or natural disruptions in that specific region.

The financial results for the three months ended June 30, 2025, are not comparable to previous periods because they include the effects of the recent NSS Acquisition (May 22, 2025), complicating accurate trend analysis.

It is unable to trace certain historical corporate filings and secretarial forms, relying instead on secondary documents. This failure could expose it to future regulatory actions or penalties from the Registrar of Companies.