Indian contract development and manufacturing organisations (CDMOs) are positioned for significant growth as global pharmaceutical companies increasingly diversify their manufacturing footprint away from China. According to The Economic Times, this shift has been driven by intensifying regulatory scrutiny around Chinese CDMO giant WuXi AppTec, with Indian players emerging as trusted alternatives for global drugmakers. Sivaramakrishnan Chittor, CFO of Sai Life Sciences, told ET Now that the transition began two years ago, with global pharmaceutical companies already engaging with Indian CDMOs. The inclusion of Indian companies in the 1260H list has made it clearer for pharma companies to ensure diversification, with India now being their best bet for manufacturing partnerships. As Chittor emphasized, "This is a landmark time for the Indian CDMOs. The genesis of this started two years ago. There was the first report that had come out. Pharma companies had already started moving."
Sai Life Sciences plans to invest between ₹1,100 crore and ₹1,300 crore in capacity expansion by FY27, as reported by The Economic Times. The company expects to finance this investment through internal accruals and debt while maintaining a comfortable balance sheet. Chittor confirmed that the company currently has no debt or only very minuscule debt on its books, allowing it to fund the expansion through its own internal accruals and business debt requirements. The capex announced last year will begin coming on stream by the end of this financial year, with production facilities becoming operational but reaching optimal capacity utilisation over a couple of years. According to Chittor, "We have not put out a number on the commercial molecules, so I would stay away from putting a number today. What I would like to emphasise is the longer-term pipeline growth."
The company's revenue composition has undergone a significant transformation over the past four years, with contributions from global pharmaceutical companies rising from 28% to 49%. According to The Economic Times, this trend reflects an industry-wide move towards diversification and deeper partnerships with Indian manufacturers. Chittor emphasized that large pharma has been a big part of their growth, with the entire CDMO business primarily driven by large pharmaceutical companies. The company currently works with 19 out of the top 25 pharma companies, positioning itself at the forefront of this global supply-chain realignment. As Chittor noted, "Large pharma has been on this path to diversify over the last two to three years and has not been waiting for this final announcement from the Department of Defence. Pharma companies are moving faster where they already have existing relationships."
Sai Life Sciences has witnessed strong growth in late-stage development projects, with Phase III and pre-registration molecules increasing substantially over the past year. As reported by The Economic Times, the company now has 11 molecules compared to 6 earlier, with additional molecules coming from pharma companies that want to manufacture more commercially in India. While the company refrained from providing specific revenue guidance from newly commercialised molecules, the increase in Phase III molecules fundamentally reflects how pharma companies are looking at India as a commercial supplier, moving beyond their earlier focus on clinical supplies. Chittor explained that "The increase in Phase III molecules is fundamentally a reflection of how pharma is looking at India as a commercial supplier. Earlier, many pharma companies used India primarily for clinical supplies. Now they are moving towards commercial supplies."
Despite the significant opportunities, Chittor acknowledged that benefits will materialize gradually given the regulatory nature of pharmaceutical manufacturing. According to The Economic Times, while there are opportunities for the entire sector to grow bigger, the timing depends on pharma companies taking time to move products with regulatory implications. The company continues to expect FY27 performance to be weighted towards the second half, supported by new capacity additions and improving order visibility. Chittor emphasized that "Primarily because some of the capacities that we are bringing in will come in during the second half of this year. Increased capacity, backed by order visibility at that point in time, is what gives us confidence that the second half will be stronger than the first."
