Morepen Laboratories plans 1,000-strong salesforce expansion to scale Rs 1,000cr formulations business

Morepen Laboratories Limited has announced a nationwide expansion effort that will see it recruit over 1,000 medical representatives over the next three years. The strategic move is designed to bolster its domestic formulations business, which currently contributes approximately ₹325 crore in revenue, with a target of scaling this to ₹1,000 crore within five years. The company intends to add over 200 sales professionals in FY26 alone, reinforcing its presence across both metro and underserved regions.

This expansion underscores Morepen’s intention to deepen its relationships with healthcare professionals, strengthen its retail pharmacy coverage, and reinforce its presence at the last-mile level. The ₹2.38 lakh crore Indian pharmaceutical market offers ample opportunity for branded generics and affordable formulations, and Morepen aims to capture a larger slice through this strategic field-force augmentation.

Chairman and Managing Director Sushil Suri highlighted that the initiative reflects a major shift in the company’s focus toward finished dosages, which are more margin-accretive compared to APIs. This hiring drive, paired with enhanced distribution and brand engagement, is expected to generate higher returns for stakeholders and play a pivotal role in aligning the company with India‘s broader healthcare mission.

How will the new strategy support Morepen’s ₹1,000 crore dosage goal?

Morepen’s expansion is being driven by its aggressive ambition to scale finished dosage revenues threefold. With India’s pharmaceutical industry forecasted to grow at an annual rate of 8.2%, reaching $130 billion by 2030, the domestic market offers a fertile ground for expansion. By increasing its salesforce and deepening market penetration—especially in Tier 2 and Tier 3 cities—the company expects to accelerate uptake of its product portfolio, which includes high-demand generics and chronic therapy formulations.

Morepen’s strategic advantage lies in its ability to produce finished dosages at highly competitive costs, supported by in-house API production. This cost efficiency, combined with a strong retail presence and relationship-driven marketing via medical representatives, positions the company to achieve its targeted market growth.

This renewed emphasis on human-led engagement also serves as a strategic response to the growing saturation of digital marketing channels. The medical representative remains a trusted source of information in many parts of India, particularly in rural and semi-urban geographies where face-to-face interactions still influence prescription behaviour.

How is Morepen’s stock reacting to this bold expansion plan?

Despite the company’s robust strategic announcements, Morepen Laboratories’ stock performance has seen recent declines. As of April 11, 2025, the stock closed at ₹48.31, registering a 1.91% drop from the prior session. The company’s shares have declined 44.83% over the last six months and are down 29.20% in the last three months, indicating bearish market sentiment. The 52-week range for the stock lies between ₹41.66 and ₹100.80, underlining the volatility that investors have faced.

This suggests that while investors recognise the long-term potential of Morepen’s expansion into formulations, near-term execution risks, macroeconomic uncertainty, and broader pharmaceutical market challenges may be influencing market sentiment.

Valuation-wise, Morepen’s trailing twelve months (TTM) earnings per share stands at ₹2.30, with a price-to-earnings ratio of 21.0, which is lower than the industry average of 32.61. Its return on equity is 12.0%, return on capital employed is 16.8%, and the debt-to-equity ratio remains minimal at 0.03—indicating sound capital efficiency and low financial leverage.

What is the role of Morepen’s API leadership in supporting its domestic growth?

Morepen Laboratories is globally recognised for its leadership in Active Pharmaceutical Ingredients, with top rankings in exports of six molecules including Loratadine, Montelukast, Desloratadine, Atorvastatin, Rosuvastatin, and Fexofenadine. This strength has long served as the foundation for its global reputation, and now it is being leveraged to support its formulations strategy.

The company’s ability to produce its own APIs in-house ensures a high degree of vertical integration, which not only safeguards quality but also protects pricing power. By reducing dependency on third-party suppliers and controlling key components of the value chain, Morepen can offer competitively priced finished formulations without compromising on margin or regulatory compliance.

This approach is especially important in the Indian market, where pricing pressure from public procurement schemes and price control regulations often squeeze margins for pharma companies that lack internal API capabilities.

How are institutional investors responding to Morepen’s transformation?

There has been a mixed response from institutional investors in recent quarters. Domestic Institutional Investors (DIIs) slightly reduced their holdings from 1.01% in March 2024 to 0.96% by December. In contrast, Foreign Institutional Investors (FIIs) increased their exposure from 1.85% to 2.22% in the same period, reflecting a cautious but growing international interest in the company’s long-term transformation.

This divergence indicates that while local investors may be adopting a wait-and-see approach due to short-term execution risks, foreign investors could be viewing Morepen’s expansion through a longer-term lens, attracted by its fundamentals, low debt profile, and ambitions in India’s high-growth healthcare sector.

Should investors consider buying, holding, or selling Morepen Laboratories stock?

Given the current valuation and expansion plans, Morepen’s stock presents a nuanced investment case:

Buy: Long-term investors with a high-risk tolerance may view the current price as an attractive entry point. The company’s clean balance sheet, strategic diversification into finished dosages, and robust API capabilities make it a potential value play for those betting on India’s healthcare growth story.

Hold: For existing shareholders, a hold strategy might be prudent. The company’s fundamentals remain intact, and the execution of its expansion plans over FY26 and beyond will be critical to unlocking further upside.

Sell: Short-term traders and risk-averse investors may find the current volatility unsettling, especially with the stock trading below its 200-day moving average. Until there is clearer visibility on the implementation of the expansion and its revenue impact, some may choose to limit exposure.

What lies ahead for Morepen in the Indian pharma landscape?

Morepen Laboratories’ renewed domestic push signals a shift in strategic priorities. By moving aggressively into the branded formulations market—an area long dominated by major players—Morepen is seeking to carve out a bigger presence in a segment offering better returns and stronger brand recognition. The decision to invest in medical representatives rather than solely relying on digital channels suggests a deep understanding of India’s diverse prescriber ecosystem.

With proven success in diagnostics (e.g., 12.3 million glucometers installed, 1.65 billion test strips sold) and established API capabilities, Morepen is now building a triad of integrated strengths: diagnostics, formulations, and APIs. This multi-pronged strategy could not only diversify its revenue streams but also insulate it from cyclical downturns in any single vertical.

The next few quarters will be crucial. Execution consistency, regional uptake of new formulations, and evidence of margin accretion will define whether Morepen can deliver on its ₹1,000 crore ambition. Regardless, the strategic roadmap is bold, timely, and reflective of a company keen to expand its legacy as a pillar of India’s pharmaceutical transformation.