4 CDMO Stocks with Strong Growth Plans

#2 Akums Drugs

Second on the list is Akums Drugs.

Akums Drugs & Pharmaceuticals stands out as the largest CDMO in the Indian market, with roughly 30% share of outsourced manufacturing for domestic pharma companies.

It caters to therapeutic areas such as cardio-diabetes, neurology, gynecology, nephrology, anti-infectives, respiratory, analgesics, and multi-vitamins. Around 26 of the top 30 Indian pharma firms are its clients.

While India and other developing markets remain core, Akums has been steadily preparing for regulated markets, particularly Europe, by getting its facilities approved.

In recent times, the company has made sizeable investments in its core businesses. The expected commencement of its sales to Europe and Zambia this year, via two contracts it undertook, is expected to support geographical diversification.

Coming to its financials, the company's sales and net profit have grown at a CAGR of 11% and 51% respectively over the past 5 years.

Its ROE and ROCE have averaged 8% and 6% respectively during the same time.

Going forward, the partnership with the government of the Republic of Zambia would be key for future growth.

Additionally, Akums Drugs and Pharma has also completed a European GMP audit, having received approval for the same.

On the export side, the company has successfully shipped its first commercial batch of Dapagliflozin tablets to Switzerland.

As Schedule M enforcement tightens, Akums is well placed to attract incremental business. Higher volumes, better capacity utilisation, and operating leverage could enhance its profits.

#3 Syngene International

Third on the list is Syngene.

The company is a global contract research, development and manufacturing organisation (CRDMO). It provides integrated scientific services to pharmaceutical, biotechnology, animal health, consumer goods, nutrition and specialty chemical companies worldwide.

It has some of the world's leaders in their fields as its top clients, including top global multinationals like BMS, Baxter, Amgen, and Herbalife. It holds over 400 patents jointly with clients and has a base of 6,000 scientists.

A 70% subsidiary of Biocon, it currently derives around 90% of its revenue from exports. One third of its revenue comes from long-term dedicated contracts with a contractual commitment of five years and more.

Coming to its financials, over the past 5 years, its sales have grown at a compounded annual rate (CAGR) of 13%. Profit growth during the same time has been around 4%.

The company's 5-year average ROE and ROCE stand at 13% and 15% respectively.

In Q3 FY26, its business was impacted due to the ongoing impact related to a single commercial product from the largest large molecule biology customer.

However, the company is actively working to diversify its business and build more large relationships, so that exposure to single product events is minimised.

Syngene recently extended its partnership with Bristol Myers Squibb, which remains its largest client. The collaboration has been extended through to 2035.

It has also expanded its advanced chemistry capabilities at Hyderabad with new catalytic screening and flow chemistry laboratories.

The company has commissioned a new commercial-scale facility for liquid-filled hard gelatin capsules, significantly enhancing its oral solid dosage platform.

Overall, the company's differentiated scientific capabilities, long-standing client relationships and diversified business model across research services and CDMO will provide resilience, balance, and growth.

#4 Cohance Lifesciences

Last on the list is Cohance Lifesciences.

The company is a technology-driven, integrated CDMO firm. It's headquarters is in Hyderabad. It was formed through the strategic consolidation of leading entities including RA Chem Pharma, ZCL Chemicals, Avra Laboratories, Suven Pharmaceuticals, Sapala Organics, and NJ Bio.

It represents a unified platform with deep scientific capabilities and global reach.

The company is among the top 3 players in 8 out of 10 top molecules in the API portfolio and has nearly 50 product families in the APIs business.

In the formulations business, the company has nearly 50 abbreviated new drug applications as partnered and owned put together.

The company operates across India, the US, Europe, and other international markets, serving pharmaceutical, biotechnology, and chemical companies.

Cohance has 14 manufacturing sites (including seven USFDA/EU-approved) and a robust research and development team.

Coming to its financials, the company's sales have grown at a CAGR of 8% in the past 5 years, while its profit is down 3% during the same time.

The company does have strong return ratios. The average ROE and ROCE over 5 years stand at 23% and 31%.

Going forward, it plans to file 5-10 products every year in various segments.

The company has recently enhanced its capabilities in niche modalities via acquisitions and focused capex in areas.

The CRDMO businesses offers long-term revenue visibility given the nature of contracts, despite the challenges in near-term visibility led by destocking, patent expiries, biotech funding and pipeline progression due to regulatory and customer-specific issues.

Cohance has a strong pipeline of molecules, which will aid to its growth prospects.

Conclusion

All these companies have laid out strong plans and could see sustained growth if the sectoral tailwinds support their expansion.

India's pharma CDMO sector offers long-term potential due to rising global outsourcing and robust order pipelines.

However, investors should carefully assess company-specific risks, including profitability pressures, execution challenges, and debt levels.

Instead of relying only on hype and growth plans, it's crucial to carefully analyse the company's fundamentals, including financial performance, corporate governance practices, and growth prospects.

Happy investing.

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