Shree Ganesh Remedies Limited targets over 60% specialty revenue

Shree Ganesh Remedies Limited expects specialty and fine chemicals to account for more than 60% of revenue in coming years. The company, referred to as SGRL, is pursuing this shift as specialty project sizes have moved from 20-50 tonnes a year to 80-100 tonnes, with current customer inquiries exceeding 500 tonnes annually.

Why is SGRL changing its revenue mix?

SGRL is changing its mix because pharmaceutical intermediates, previously contributing more than 90% of revenue, now contribute less than 60%. Since its 2004 inception, the company has manufactured intermediates for off-patent and generic drugs, generally producing multiple products in small campaign batches at multipurpose plants.

SGRL entered specialty and fine chemicals in 2010, focusing on patented molecules and customer-specific innovative molecules. Management expects this vertical to exceed 60% of revenue in coming years, although the presentation does not specify a target year or disclose current segment revenue in rupees.

The company applies stated selection criteria before taking products forward. These include a fit with its chemistry and technology skills, backward integration, and manufacturing involving multiple chemistries, which SGRL defines as three to four different chemistries rather than merely three to four reaction steps. It also requires products to meet its internal benchmark for sustainable long-term margins.

SGRL lists liquid-gas, high-pressure, cryogenic and photo-catalytic reactions among its capabilities, as well as thin-film and high-fraction distillation. Its chemistry portfolio includes chloro-alkyl amine hydrochloride salts, cyclopropane derivatives, carboxylic acids and acid chlorides, serving human and veterinary health, agrochemicals, polymers and electronics.

How much larger are SGRL's custom-manufacturing projects?

SGRL says specialty and fine-chemical assignments have grown from 20-50 tonnes a year to 80-100 tonnes a year, while current inquiries exceed 500 tonnes annually. The presentation does not disclose how many inquiries it has received, their likely conversion rate, contract values or potential revenue.

SGRL also says it has moved from third supplier to second supplier for medium-sized client projects. The presentation does not identify the relevant products, customers, volumes or contract duration, though it lists Dipharma, BASF, Lonza, Dottikon, Cambrex, Aarti Industries, Dr. Reddy’s, Laurus Labs and Cipla under its industry collaborations.

The increase in inquiry size signals a different stated capacity requirement, rather than confirmed orders. SGRL intends its Dahej site to handle large-scale custom-product requirements for large corporates through capital-intensive, highly automated plants. It says multiple Dahej projects are under evaluation and discussion, but customer and product details are withheld under signed non-disclosure agreements.

What manufacturing capacity is SGRL adding?

SGRL is expanding Ankleshwar Unit 1 and preparing Dahej for larger custom-manufacturing projects. Unit 1 has seven functional production blocks, while Block 8 was added in FY24 and its capital expenditure was completed in FY25.

Block 7 is scheduled for commissioning in H1FY27, with projected capital expenditure of about Rs 20 crore. SGRL also disclosed Rs 15 crore of FY26 capital expenditure for a new manufacturing block and research and development initiatives. The stated focus spans pharmaceutical intermediates, complex and niche specialty chemicals, and fine chemicals.

The Ankleshwar site has 35 glass-lined reactors ranging from 1,000 to 25,000 litres and 28 stainless-steel reactors ranging from 1,000 to 15,000 litres. It also has three 2,000-litre autoclave reactors rated up to 40 bar, nine dryers and eight distillation setups with up to 70 stages, vacuum capability down to 1 mbar, short-path distillation and thin-film distillation.

SGRL acquired 40,554 square metres of land at Dahej in 2022 for Rs 11 crore. Construction of common infrastructure, utilities and warehousing has begun, while subsequent expansion is planned in phases. The presentation provides no Dahej production-capacity figure, total development budget or commissioning date.

How will SGRL scale customer-specific molecules?

SGRL plans to use its pilot and research facilities to move molecules from laboratory development to commercial manufacture. A new pilot plant incorporating automation and flow chemistries is scheduled for commissioning in Q4FY26, while the facility is intended to support scale-up of both new and existing molecules.

The existing pilot infrastructure includes 12 reactors with total capacity of 6,900 litres, including eight glass-lined reactors and four stainless-steel reactors ranging from 600 to 1,000 litres. It also includes three filter dryers of up to 250 litres and two hydrogenation reactors, of 2 litres and 25 litres, rated at 100 bar.

SGRL has a 40-member research and development team, and its in-house laboratory is recognised by the Department of Scientific and Industrial Research, or DSIR, of the Central Government. The company says its research head has 18 years of experience and two patents, while laboratory facilities include analytical, synthesis, safety and compliance labs and high-performance computing for molecular modelling.

Management also plans a new research and development block for pilot trials and scale-ups, intended to speed development. It is exploring research facilities in foreign locations, but has not disclosed locations, costs, timing or approval status. The defined near-term milestones remain the Q4FY26 pilot-plant commissioning and Block 7 commissioning in H1FY27.

Conclusion

SGRL's planned business-model shift rests on management's expectation that specialty and fine chemicals will exceed 60% of revenue in coming years. That ambition follows a decline in pharmaceutical intermediates from more than 90% of revenue previously to less than 60% now, alongside specialty-project inquiries above 500 tonnes annually versus earlier 20-50-tonne assignments.

The next disclosed milestones are the planned Q4FY26 commissioning of the new pilot plant and H1FY27 commissioning of Block 7. At Dahej, SGRL has begun common infrastructure development on its 40,554-square-metre site, but customer-project conversion, production capacity, project costs and commissioning timing remain undisclosed.