iifl-logo

Sanofi Consumer Healthcare India Ltd Management Discussions

5,013
(0.02%)
Jun 27, 2025|12:00:00 AM

Sanofi Consumer Healthcare India Ltd Share Price Management Discussions

Indian Economic Overview

India remains resilient amid global economic challenges and geopolitical uncertainties. The Gross Domestic Product (GDP) growth of the Indian economy is anticipated at 6.4% in FY 25, down from the 8.2% growth in FY 24, due to demand slowdown, industrial deceleration, and inflationary pressures. The Reserve Bank of India (RBI) forecasts Consumer Price Index (CPI) inflation to average 4.8% in FY 25 and has maintained the policy repo rate at 6.50% to support growth.

Despite the global challenges, India is poised to grow at 6.5% in FY 26 and FY 27, retaining its position as the fastest-growing major economy. Growth will be driven by robust domestic factors, including heightened investments in infrastructure development, favorable demographics, and strong consumer sentiments. Initiatives such as the Production-Linked Incentive (PLI) scheme and the ‘Make in India will further accelerate manufacturing growth.1

Industry Overview

Overview of the Indian Consumer Healthcare Industry

The consumer healthcare industry ("CHC") in India, encompassing products aimed at improving health and well-being without insurance coverage, was valued at Rs 68,000 Crore. The CHC market spans categories such as allergy, cough, cold and flu, digestive wellness, physical wellness, pain care, and personal care.

In India, CHC usage has expanded steadily over the past few years. Factors such as rising awareness for self-medication, increasing lifestyle diseases, and greater availability and affordability of over-the-counter (OTC) drugs, have contributed to the growth of the consumer healthcare market. Common ailments driving demand for OTC products include indigestion, constipation, cold, cough and flu, and allergies. Rapid expansion of e-commerce and digital health platforms has increased accessibility and availability of healthcare products, further propelling the sectors growth.

The government of India aims to ensure the accessibility, safety, and well-being of consumers in the healthcare sector. To uphold these standards, several laws and

In India, CHC usage has expanded steadily over the past few years. Factors such as rising awareness for self-medication, increasing lifestyle diseases, and greater availability and affordability of over the counter (OTC) drugs, have contributed to the growth of the consumer healthcare market. Common ailments driving demand for OTC products include indigestion, constipation, cold, cough and flu, and allergies.

Regulations govern the operations of consumer healthcare companies. Key legislations include the Drugs and Cosmetics Act, 1940 and its Rules, the Drugs (Price Control) Order, 2013, the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, the Consumer Protection Act, 1986, the Narcotic Drugs and Psychotropic Substances Act, 1985, and the Legal Metrology Act, 2009, along with its associated rules and regulations.

Target Consumer Evolution

The consumer healthcare market in India is undergoing a significant transformation, driven by evolving consumer behaviors, digital access, and changing health priorities. Purchase decisions are influenced by a mix of stakeholders, with healthcare professionals (HCPs) accounting for approximately 50% of the influence, followed by direct-to-consumer (DTC) channels at 30%, and chemists at 20%.

Digital access is playing a pivotal role, with over 53 million Indians seeking health-related information online. This growing digital literacy is shaping consumer choices and enhancing awareness about preventive care and wellness solutions. Another key trend is the increasing inclination toward self-medication. About 26% of consumers prefer to self-medicate, while 15% rely on chemist consultations for their health needs. Additionally, the mindset around health is evolving, with 41% of consumers identifying physical fitness and preventive care as their top health goals.

Growing Adoption of Digital & Artificial

Intelligence (AI)

The consumer healthcare industry is witnessing a rapid shift with the growing adoption of digital technologies and Artificial Intelligence (AI). Companies are increasingly leveraging AI to personalize consumer experiences, enable predictive healthcare, and offer smarter self-care solutions. Digital platforms are being used to deliver health education, track wellness goals, and provide virtual consultations empowering consumers to take control of their health journeys. Moreover, AI-driven tools are enhancing supply chain efficiency, optimizing marketing strategies, and supporting data-driven decision-making. As consumers increasingly seek convenience, accessibility, and proactive wellness solutions, the integration of digital and AI technologies is transforming the way healthcare is delivered, making it more personalized, preventive, and responsive.

Company Overview

Sanofi Consumer Healthcare India Limited (SCHIL or the Company) was incorporated on May 10, 2023, marking a pivotal step in Sanofis global strategy to establish a dedicated Consumer Healthcare (CHC) entity. Following the successful demerger from Sanofi India Limited, SCHIL was established to empower consumers through accessible and effective self-care solutions.

SCHIL was listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) on September 13, 2024. This debut underscores the Companys commitment to growth, operational independence, and delivering trusted healthcare offerings to consumers. Backed by a robust distribution network, SCHIL operates across a wide range of channels, including distributors, wholesalers, government institutions, hospitals, pharmacies, pharmacy chains, and e-commerce platforms.

Guided by the principles of business integrity, marketing excellence, and consumer-centric innovation, SCHIL is focused on redefining the self-care landscape in India.

The Companys core purpose is to enable healthier lives by offering high-quality, reliable, and accessible healthcare solutions that enable individuals to take charge of their well-being.

Product Portfolio

SCHIL has a portfolio of leading brands with a strong legacy, as mentioned below:

Allergy

Allegra: A trusted name in allergy relief, Allegra is used to treat allergies caused by sneezing, runny nose, and itchy eyes. With a scientifically proven, nondrowsy formula, Allegra helps individuals stay active and comfortable throughout the day. The Allegra range includes Allegra, Allegra M, Allegra Nasal, and Allegra Nasal Duo.

Avil: Avil is an antiallergic medication for treating allergic conditions (such as hay fever, drug rashes, allergic conjunctivitis, and food allergies), respiratory tract conditions, and other skin conditions. It is also used to treat and prevent motion sickness, symptoms of Menieres disease (such as nausea, vomiting, and vertigo), and other associated labyrinthine disturbances.

Pain care

Combiflam: Combiflam is a popular pain relief tablet to treat headaches, toothaches, body aches, muscle pain, joint pain, and fever. It contains Ibuprofen and Paracetamol, which work by blocking chemical messengers responsible for pain, fever, and inflammation.

Physical wellness

DePURA consists of two SKUs: DePURA Kids Drops & DePURA 60,000 IU. Both products were recalled in March & June 2023, respectively. DePURA 60K was relaunched in January 2024, and the kids SKU is yet to be launched.

Opportunities and Risks

Opportunities

Adoption of the latest technologies and innovations:

The landscape of pharmaceutical manufacturing is undergoing a transformative shift. The growing adoption of digital technologies such as artificial intelligence (AI), telemedicine and machine learning (ML) is expected to improve healthcare delivery and amplify the demand for innovative medicines, revolutionize distribution channels and propel the pharmaceutical market in India.

Innovation and product development for evolving customer needs:

There is growing demand for products that address specific health concerns such as immunity, digestion, mental wellness, and lifestyle-related conditions. Companies that continuously innovate with targeted, customized solutions will be well-positioned to capture market share.

Rising awareness and adoption of self-care therapies:

With greater access to health information, more consumers are embracing self-care practices.

Over-the-counter (OTC) products and home-based healthcare solutions are witnessing increased acceptance, driving demand for such products.

Growing adoption of e-commerce channels:

Online platforms are transforming how consumers discover, research, and purchase healthcare products. E-commerce not only improves accessibility but also enables brands to offer personalized experiences and build direct relationships with consumers.

Risks

The Company is exposed to several risks. However, it has a structured risk management framework for the effective identification, assessment and mitigation of key risks. The major risks are listed below:

Stringent regulatory environment:

The Indian pharmaceutical industry operates under a highly regulated environment. Stringent and evolving regulations in both domestic and international markets and tighter norms for clinical trials as well as for the development of new drugs may hamper innovation and impact the growth of the industry.

Price control and NLEM: The drugs in the National List of Essential Medicines (NLEM) are scheduled drugs that are under price control by the central government. The NLEM can lead to pricing pressures for pharmaceutical companies, affecting their profitability. Inclusion Sanofis products in the NLEM could adversely impact its growth. Any unfavorable alterations in government policies related to pricing or trade margins may impact the Companys performance.

Counterfeit and sub-standard drugs: The pharma industry has been grappling with issues related to counterfeit or spurious drugs. The presence of fake and substandard drugs in the market erodes trust and tarnishes the industrys image.

Data breaches and cyber threats: The data collected by pharmaceutical companies, including proprietary information about patented drugs, data related to pharmaceutical advances and technologies, and patient information are highly sensitive and valuable. Hence, the pharmaceutical industry is vulnerable to cybersecurity and data breach threats.

Key Strengths

One of the leading consumer healthcare companies with an optimized and agile business model

SCHIL is one of the leading CHC companies in India, with successful brands across several categories, including allergy, pain care, and physical wellness. Its agile and targeted business model leverages strong brands to meet consumer needs efficiently. Further, the Companys partnerships with local manufacturers help it enhance cost efficiency, ensure reliable supply chains, and accelerate market access. Its consumer-focused engagement, supported by strong distribution capabilities, drives growth across diverse channels in India.

Attractive growth profile and strong margin business gin (%) The Company demonstrates an impressive growth trajectory, consistently outpacing category growth rates. Efficient operations, an agile team structure, and strong distribution networks enable it to maintain a compelling margin profile.

Focus on customer-centric engagement

The Company focuses on building a consumer-centric organization through initiatives such as market research, mass media and digital outreach, grievance redressal mechanisms, and consumer support programs. Decades of consumer confidence in the Sanofi brand have been built on innovative products and adherence to the highest global quality and safety standards. This trust, combined with robust stakeholder engagement, drives higher consumer interactions across modern stores and chain pharmacies.

Global parentage with strong local presence

As part of Sanofis global Consumer Healthcare business,

SCHIL benefits from its expertise and experience in scientific know-how, product innovation, and marketing best practices. Its India for India strategy optimally positions SCHIL to implement CHC strategies locally by leveraging global insights and expertise. The Company is also actively engaged with regulatory authorities to help shape OTC regulations in India.

Experienced management team and Board of Directors

The Companys professional management team and Board of Directors bring over 20 years of experience across diverse fields, including CHC, strategy, finance, sales, marketing, M&A, and project management. With a focus on diversity and agility, the leadership ensures quick decision-making at the local level to seize market opportunities and better serve customers.

Performance Overview Financial Highlights

During the year, the Company achieved a revenue of Rs7,245 million, an EBITDA of Rs2,552 million, and an EBITDA margin of 35%. Profit After Tax (PAT) stood at Rs1,810 million, reinforcing its disciplined approach to financial and operational efficiency. The Company declared a dividend of Rs55 per equity share (face value of Rs10 each) for the financial year ending December 31, 2024. It is important to note that, as the Company was incorporated on May 10, 2023, the financial figures for the year 2023 were restated due to the impact of a demerger and are therefore not directly comparable with those of the year 2024.

Key Financial Ratios
Particulars 2024 2023
OperatingProfit 35% 39%
Net Profit Margin (%) 25% 30%
Debtors Turnover Ratio 31.99 17.67
Current Ratio 3.00 2.58
Inventory Turnover Ratio 2.71 1.61
Interest Coverage Ratio NA NA
Debt Equity Ratio NA NA
Return on Net Worth (%)# 75% 122%

#In the year 2024, the reserves increased as a result of profitable operations, which consequently led to a decline in the return on net worth percentage as compared to the year 2023 where the equity base was lower.

Strategic Pillars and Outlook

SCHILs business outlook is anchored in five strategic pillars that continue to drive its leadership and long-term growth:

Elevating brand love through innovative products and stronger consumer engagement: Enhancing brand engagement through cutting-edge products and insight-driven engagement strategies

Leveraging data and digital to drive marketing and operational efficiencies: Harnessing data, AI, and precision marketing to personalize experiences, boost operational efficiencies, and deliver seamless omnichannel journeys

Improve access by leveraging channels of future – e/q commerce and MT: Expanding accessibility through fast-evolving channels such as e-commerce, quick commerce, and modern trade, ensuring increased reach and accessibility of self-care products

Category shaping by driving diagnosis rate and partnering with HA in shaping the OTC policy:

Collaborating with healthcare authorities to shape OTC policies and improve diagnosis rates, influencing the broader healthcare landscape.

Nurturing talent and strengthening processes: Investing in talent, nurturing leadership, and strengthening processes to maintain agility and resilience in a rapidly evolving industry. The investments necessary to support growth are cultivated through continuous, company-wide initiatives aimed at enhancing realizations, reducing costs, and optimizing asset utilization. These initiatives are designed to enhance operational efficiency. The

Company believes it is well-prepared to face challenges due to its strong financial condition, experience in operating under difficult circumstances, and ongoing focus on key priorities. The Company is committed to driving operational efficiency across every facet of income statement to maximize margins. Additionally, it aims to deliver robust cash flow performance, ensuring that resources are deployed strategically to maximize returns for shareholders. Above all, the Company remains focused on achieving long-term success by staying aligned with its core values and prioritizing the interests of all stakeholders.

Human Resources

Human resource management is integral to the Companys growth and success. The Company strives to foster a congenial and harmonious work environment, ensuring that its employees feel valued and empowered. Regular learning and development and employee engagement programs are conducted to enhance their skills and capabilities. As of December 31, 2024, the Company had a total of 583 employees.

Key Initiatives

SCHIL continues to strengthen its people-first culture by adopting a Challenger Mindset. This initiative is led by 28 CHC Challengers, supported by 8 mentors and a 500+ member field force. Monthly mentor-challenger connects help drive momentum and ensure timely execution, while "Challenger Recharge Sessions" provide ongoing engagement and inspiration. Leadership outreach through roadshows by the India Leadership Team (ILT) and the "Your

Human resource management is integral to the Companys growth and success. The Company strives to foster a congenial and harmonious work environment, ensuring that its employees feel valued and empowered. Regular learning and development and employee engagement programs are conducted to enhance their skills and capabilities.

Voice & Challenger Mindset" sessions has connected with over 300 employees.

SCHIL also invested significantly in employee growth and development. The Company enabled internal career progression and introduced the "Insights Discovery" program, covering 55+ corporate employees through group assimilation sessions. First-time managers were equipped with essential leadership skills through targeted training and the "Lead to Growth" workshop.

The Companys employees were rewarded with over 500 BRAVO awards in 2024, marking a 200% year-on-year growth in recognitions. Purpose Day brought together over 80 employees, while festive celebrations such as Diwali and Dussehra, along with the "Game On" sports event, its added energy and joy to the workplace. Top-performing employees were recognized as "Super Achievers" and rewarded with an exclusive visit to Sri Lanka.

Internal Control Systems

The Company has established robust internal control systems commensurate with the size and complexity of its operations. These controls ensure a reasonable assurance regarding the accuracy of financial reporting, compliance with applicable laws and requirements, protection and efficient use of assets and resources, and adherence to policies and procedures.

The Audit Committee of the Board regularly reviews the audit findings presented by the Internal Audit department, covering all risks, including operational, financial, strategic, technological, etc. The systems are regularly tested for effectiveness by the statutory and internal auditors. Regular reviews and Audit Committee oversight ensure timely corrective actions and adherence to regulatory requirements.

Cautionary Statement

Certain statements in the above Report may be forward-looking and are stated as required by the legislations in force. The actual results may be affected by many factors that may be different from what is envisaged in terms of future performance and the outlook presented above.

February 20, 2025

Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.