Focus on oral healthcare
Mid-sized firm Veerhealth Care, which manufactures Ayurvedic medicines, cosmetic products, unique vegetarian oral care products, and personal care items, is on an expansion drive, particularly in international markets. Veerhealth Care manufactures Ayurvedic and cosmetic personal care products under the brand Ayuveer. The company recently secured an export order valued at more than $197,793 from a top US institutional supplier, which is expected to be executed within the next 3 months, as stipulated by the terms of the purchase agreement. Furthermore, the company regularly anticipates monthly repeat orders from the same US supplier. The company has also received a new order from Apollo Healthco Limited.
Yogesh Shah, Chairman, says: “We aim to become contract manufacturers with end-to-end solutions for all private label requirements, which include product development, sampling, packaging selection, manufacturing, and final dispatch. Our biggest strength is our in-house research and development centre for developing formulations and concepts using raw materials of impeccable quality, and products can be suitably customised as per requirement.”
Veerhealth Care’s Managing Director, Bhavin Shah, elaborates: “We are now embarking on an expansion plan. We are in the process of acquiring an additional 27,451 sq ft of land adjacent to our current manufacturing facility in Vapi, Gujarat, to set up new manufacturing lines, which will comply with CGMP (Current Good Manufacturing Practice) norms as required by the USFDA to meet the increasing demand from the US market.”
Mumbai-headquartered Veerhealth Care recently embarked on a R33 crore expansion project to enhance healthcare solutions, covering land acquisition, building construction, procurement of machinery, and infrastructure development. “The acquisition of the land parcel will enable the establishment of new manufacturing lines compliant with CGMP norms as required by the US FDA, addressing the increasing demand from the US, East & North African markets,” adds Bhavin. The company will raise Rs8 crore through bank borrowings to fund this. Additionally, the company’s board has approved the issuance of 99,99,238 new equity shares at Rs25 each (including a Rs15 premium) in a rights issue. Existing shareholders, including promoters, will be offered one new share for every two shares.
Strong team
Incorporated in July 1992 as Niyati Leasing Limited, the company diversified into manufacturing Ayurvedic and cosmetic formulations by setting up a unit in Vapi, Gujarat. It has an established state-of-the-art manufacturing unit that spans 60,000 sq ft, complying with FDA/GMP & ISO9001: 2015 norms. Dr Vinod C Mehta and Dr Rajiv Bhirud, two Ayurvedic experts, played a crucial role in transforming the company from finance and leasing to manufacturing Ayurvedic medicines, oral care products, and personal care products.
Vinod C Mehta, a gold medallist from K G Mittal Ayurvedic College with over 30 years of Ayurvedic practice, joined the company as an expert in Ayurvedic medicine and unique vegetarian oral care products. Mehta plays a crucial role in original formulation and production techniques. Meanwhile, Dr Rajiv Bhirud (PhD) is a specialist in Product R&D with vast experience in companies like Hindustan Lever Ltd, Balsara Hygiene Ltd, CavinKare, Unilever, and others. Bhirud was instrumental in developing the entire Ayuveer personal care range of products. He also plays a pivotal role in enhancing the factory infrastructure for better efficiency. Under his guidance and expertise, the company has developed new cosmetic products and catered to clients’ requirements for domestic and export purposes.
The company expects a substantial increase in demand from the US, East & North African markets following the initial supply of oral care products. After the expansion, the company plans to introduce high-capacity manufacturing and filling lines in the new facility to address this anticipated demand. Additionally, the new facility will be equipped with plastic blow moulding and injection moulding machines, allowing for backward integration by producing packaging materials internally. “This strategic move aims to provide a comprehensive solution to client requirements and is projected to help the company achieve a revenue target of Rs100 crore over the next 2-3 years with a net profit margin of around 10 per cent,” says Akash Shah, CFO of Veerhealth Care.
Veerhealth Care has firmed up plans to enter other critical markets, including Africa and Europe, in the coming months following the initial success of the supply of oral care products. Veerhealth Care has successfully manufactured and supplied the largest online pharmacy in India with over 3,500 stores, ensuring authenticity, quality, and regulatory compliance. It has also successfully manufactured and supplied ‘Caloral’ toothpaste to F&G Branding Co, Casablanca, Morocco, North West Africa. Additionally, it has launched Whident & Caloral toothpaste in the oral care segment in Morocco.
“Recently, the company was allotted a labeller code from the US FDA. Under Section 510 of the Federal Food, Drug, and Cosmetic Act, drug products are identified using a unique three-segment National Drug Code (NDC), which includes the labeller, product, and trade package size. The US FDA has officially assigned the labeller code to Veerhealth Care, enabling the company to expand its business within the US institutional supply industry,” adds Bhavin.
“This milestone allows the company to introduce a range of body and skincare products to the US market. Having already successfully exported various oral care products to East Africa, we now aim to leverage opportunities in the global market for manufacturing and supplying oral care products. As a leading manufacturer of Ayurvedic and cosmetic-grade toothpaste in India, Veerhealth Care is well-positioned to benefit from the growing Western interest in Indian Ayurvedic and herbal products.”
Huge export potential
According to a NirogStreet survey, the overall market for Ayurveda products and services is expected to grow at a CAGR of 15 per cent from FY2023 to FY2028, with the product and service sectors growing at a CAGR of 16 per cent and 12.4 per cent, respectively. The survey also estimated the country’s Ayurvedic manufacturing value at Rs89,750 crore ($11 bn) in FY22. This figure includes the value of exports, around Rs40,900 crore ($5 bn). Imports are estimated at Rs8,600 crore ($1 bn).
According to a study, India’s Ayurveda product market is projected to reach $16.27 billion or Rs1.2 lakh crore by FY2028 from $7 billion or Rs57,450 crore. The Ayurveda product market has experienced significant growth due to rising demand for natural and herbal remedies in local and international markets, an increase in Ayurvedic medical practitioners, government initiatives, and the emergence of new entrepreneurs, such as the Ayurveda tech start-up NirogStreet.
At a CII AYUSH Conclave in April 2024, Padmashri Vaidya Rajesh Kotecha, Secretary of the Ministry of AYUSH, highlighted the need to position AYUSH products in global marketplaces and bring more innovation into the ecosystem. The secretary stated that the AYUSH sector has surged to $24 billion in 10 years. This exponential growth trajectory indicates the immense potential of the Ayurveda product market in India to become a significant contributor to the country’s economy.
Independent analyst Vidit Gupta adds: “The oral care and personal care product manufacturer is expected to generate substantial demand and positive feedback from the US, East & North African markets following the initial supply of oral care products. To meet this anticipated demand, we expect Veerhealth Care to introduce high-capacity manufacturing and filling lines in the new facility.”
Veerhealth Care has completed the Quality Council of India inspection for the onboarding process on the Government e-Marketplace (GeM) portal. It has been registered as an OEM for nine products covering skincare, body care & hair care categories. Government e-Marketplace (GeM) is the National Public Procurement Portal, an end-to-end online marketplace for Central and State Government Ministries, Central & State Public Sector Undertakings (CPSUs & SPSUs), Autonomous institutions, and Local bodies for procurement of everyday goods and services.
The company can now bid for tenders related to the personal care category on the GeM portal. Veerhealth Care has successfully manufactured and supplied Fresh Up Red Gel Toothpaste to Vision Impex Limited, Uganda, East Africa.
“We are aiming to achieve a revenue target of Rs100 crore over the next 2-3 years, with a 10 per cent PAT margin,” adds Akash Shah. For the year ended 31 March 2024, the company reported a total revenue of Rs13.22 crore compared to Rs13.27 crore in the previous year. EBITDA improved to R s2 crore from Rs1.46 crore, while net profit stood at Rs0.40 crore. For the June 2024 quarter, the company reported revenue of Rs2.42 crore, an EBITDA of Rs34 lakh, and a net profit of Rs12 lakh. During the quarter, the company completed the onboarding process on Nykaa’s mobile application and website. The stock is trading at R22.88-24.75 with volumes close to 3.83 lakhs. Over the last 12 months, the stock has given a return of 13.85 per cent in the last 3 months and 45.92 per cent in the last 6 months.