Upholding Cipla's ethos: Umang Vohra on the crucial role of the management

Umang Vohra, the current MD and Global CEO points out that Cipla is not just a pharmaceutical company; it's a combination of legacy and a commitment to being there when people need it the most.

Cipla was there; whether it was challenging the patent regime, the fight against AIDS or the global pandemic like COVID-19. The company operates with the heart of a foundation doing everything for the public’s benefit.

Talking about succession and the idea that there are big shoes to fill when it comes to the Cipla legacy, Vohra points out that recent reports about the stake sale in Cipla are speculative. While there have been no official announcements yet, one has to infer, he notes, through the recent developments such as the opening up of the employee trading window, that it is business as usual for Cipla.

Hamied, in fact, is not as concerned about an owner but more about upholding the company's values and mission. In conversations with Vohra, Hamied has discussed many times how Tata Sons and Asian Paints continue to co-exist through generations of promoters. As much as Hamied plans for succession on the promoter side, he has to plan for succession on the management end.

In all, Hamied places his trust in the capable hands of the management team to carry forward the legacy. What sets Cipla apart is its commitment to preserving its ethos.

The company's commitment to providing affordable drugs is unwavering. While there has been talk about assessing businesses on a standalone basis, selling any part of the business at this stage seems unlikely. Cipla is not about bringing in a strategic investor for valuation boosts; it's about delivering on its mission.

Talking about growth, Cipla seems to be bullish on the India story, especially in Tier-2 to Tier-6 cities as a big growth driver. In fact, the growth potential in these areas might surpass that of Tier-1 cities and metros. Vohra's bullishness aligns with the growing trend of private equity investments in hospitals in Tier-2 to Tier-6 cities. He expects Tier-2 to Tier-6 to grow as much as 15% versus the whole of India at 10-12% for the industry.

Also Read: Cipla board approves sale of generics business to wholly-owned subsidiary for ₹350 crore

The company, which plans to introduce the weight loss drug Semaglutide in the Indian markets by 2025-2026, is expecting US sales to be above $220 million per quarter in future.

Vohra is expecting 24% margins with an upside conditional on launches such as that of the cancer drug Abraxane and is also looking to solve regulatory issues at the Goa and Indore facilities. For Goa, they will be ready for remediation by December and could see an inspection in the next six months. For Indore, it will be a little later, possibly by July or August of next year.