Is Corona Remedies’ IPO an attractive bet for long-term wealth creation?

ET Intelligence Group: Corona Remedies, a pharmaceutical company, plans to raise Rs 655.4 crore through an offer for sale. The promoter group’s stake will drop from 72.5% to 69% after the IPO. The company focuses on the specialist doctors, which is driving revenue growth faster than the Indian pharmaceutical market (IPM). Specialists accounted for 75.8% of the company’s prescriptions, compared to 61% for the sector. The company focuses on the Indian market, reducing tariff-related and geopolitical risks. However, the EBITDA margin is lower than that of its peers. Considering these factors, investors with a high risk appetite may want to consider going public with a long-term view. Company

Corona Remedies, founded in 2004, is engaged in the development, production and marketing of pharmaceutical products. According to CRISIL Intelligence Report, it was the fastest growing pharmaceutical company among the top 30 companies in the IPM on a moving average aggregate (MAT) basis as of June 2025. During this period, the company’s revenue grew 13.6% compared to the 7.9% growth for IPM. As of June 2025, the portfolio included 71 brands in therapeutic areas such as women’s health, cardio-diabeto, pain management, urology and multi-specialty pharmaceuticals including vitamins, minerals, nutrition, gastrointestinal and respiratory medicines. It has two manufacturing facilities with a total installed capacity of 1,285.4 million units per year for formulations. The company spent over 1% of total spend on research and development (R&D) in FY24 and FY25 in areas such as new formulation development, improving process efficiency, oral hormone product development and packaging development.

Financial data
Revenue grew 16.3% annually to `1,196.4 crore, while net profit rose 32.6% to `149.4 crore between FY23 and FY25. Operating profit before depreciation and amortization (EBITDA) grew 35% annually to `245.9 crore, while EBITDA margin improved from 15.3% in FY23 to 20.6% in FY25. Among sector peers it still remained below 25-35%. About 96% of sales come from India. Return on invested capital grew from 36.6% to 47.9% and return on equity improved from 23.3% to 27.5% in FY23-25. Cash flow from operating activities rose from `102.7 crore in FY23 to `190.5 crore in FY25. The company has paid dividends in each of the three years through FY25 with a dividend payout ratio ranging between 6 and 19%.

Valuation

Considering equity and post-IPO earnings for FY25, the price-to-earnings (P/E) ratio stands at 44, compared to 24-56 for listed peers including Sanofi India, Pfizer and Eris Lifesciences.