The Current Pharmaceutical Industry in India - A CFO's Perspective

The Current Pharmaceutical Industry in India - A CFO's Perspective

Mukesh Surana, CFO, Granules India, 0

A Chartered Accountant from The Institute of Chartered Accountants of India, Mukesh boasts of a 22 years long illustrious career of having successfully handled key roles across diverse companies such as SRF, Asian Paints, Noble Group, Kalpataru Power Transmission and Garware Technical Fibres, prior to joining Granules India in 2022.

In a recent interaction with CEO Insights, Mukesh shared his insight on diverse topics such as the role of a CFO, current pharma industry in India and many more. Below are the excerpts from the exclusive interview –

What are your thoughts on the current pharma industry in India?
Pharmaceutical industry is highly regulatory-driven industry, which brings along its own set of opportunities and risks that need to be mitigated. Currently, India is one of the largest pharma markets in the world. The government also is undertaking a lot of initiatives with regards to pharma industry recently, while associating with pharma companies in the R&D and innovation areas. Along with offering incentives and other benefits, the government’s PLI scheme is also acting as a driving force for the pharmaceutical industry in India lately.

While pharma industry was by far largely dependent on China for key raw materials, the scenario is expected to slowly change. Many of the pharma companies from across the world will look at India as the major pharma hub with complete backward integration. As a result, India is expected to become self-reliant for the demand of most of the chemicals going forward.

Briefly explain the various roles and responsibilities of a CFO in the organization.
While a CFO does have a lot of functional priorities, he must also ensure business requirements and business effectiveness are met or improved over having the necessary processes and systems in place. The CFO must also take care of management of working capital and capital expenditure. Additionally, he is responsible for improving the cash flow from operations and formulating strategies for capital allocation for capex,
R&D, new product launches, technology acquisition opportunities and M&A. Since every process in an organization involves multiple internal and external stakeholders, a CFO plays a crucial role in making sure that all the stakeholders involved in the business process have a clear understanding of the company’s vision & mission statements and work together towards achieving a common goal.

Throw some light on India’s positioning in the global pharma ecosystem currently.
There are massive avenues of opportunities for India to cater to the entire global pharma needs. Currently, most of our country’s pharma products are largely being supplied to US and Europe regions which are very highly regulated markets regarding FDA requirements. Catering to these geographies from many decades, India has proven its mettle both in supply and quality. With WHO having a lot of norms across the globe, there has been an increased emphasis on the importance of quality assurance in the healthcare and pharma industries across globe. India has built a very good reputation in this regard, and this factor will enable it to become the go-to supplier for global pharma requirements.

While pharma industry was so far largely dependent on China for key raw materials, many global pharmaceuticals will look at India as the major pharma hub with complete backward integration.

Suggest a few effective means to increase the cash flow in an organization.
Cash flow planning and management in an organization aligns with Organization’s growth plan, strategic initiatives and annual operating plans. You have to carefully analyze each financial aspect of the business to increase EBITA and keep the working capital lean. Also, you must ensure to prioritize the capital expenditure in terms of their payback and compliance related capital expenditure, and accordingly allocates the capital.

What are some key group policies and procedures that other CFOs should implement?
In terms of group policies and procedures, every company must have strong SOPs in place as per their industry dynamics and business requirements. Also, those SOPs must have adequate internal controls. This will enable the Organization to have SOPs in alignment with business requirements and with adequate controls and enable the management in taking proper decisions.