Cadila Healthcare works to build Zydus brand

Cadila Healthcare, India's fourth most valuable pharmaceutical company, is gradually working on carving out a brand identity for Zydus that would act as a differentiator with its namesake Cadila Pharmaceuticals, an unlisted entity based in Ahmedabad. While most of its subsidiaries bear the Zydus name, the company has decided not to change the name of its holding company and the listed entity Cadila Healthcare at the moment. 

It has, in fact, spun off its domestic formulations business (sans the biologics business) into a separate subsidiary called Zydus Healthcare Ltd. Henceforth, all communications related to the India formulations business would refer to Zydus Healthcare. 

Cadila Healthcare is also popularly known as Zydus Cadila. The group is known as Zydus Group and now the company is slowly creating a brand identity for the same. 

Late Ramanbhai B Patel, a former lecturer at LM College of Pharmacy, had founded Cadila Laboratories in 1952 along with his business partner Indravadan Modi. In 1995, the Patel and Modi families split, with the latter’s share being moved to a new company called Cadila Pharmaceuticals Ltd and Cadila Healthcare became the Patel family’s holding company. 

Cadila Healthcare eventually got listed on the BSE in the year 2000. Cadila Healthcare is headed by Ramabhai’s son Pankaj R Patel as chairman, while his son Sharvil has taken charge as the managing director recently. From a turnover of Rs 250 crore in 1995, the group posted revenues of over Rs 9,600 crore in FY17. 

On the other hand, Cadila Pharmaceuticals is headed by Indravadan Modi’s son Rajiv Modi. While Cadila Healthcare is a listed entity with a market capitalisation of Rs 43,386 crore, close on the heels of Cipla (Rs 48,256 crore) and Piramal (Rs 50,052 crore) on the BSE, Rajiv Modi-headed Cadila Pharmaceuticals is privately held. 

It is among the top privately held pharma companies in India with revenues estimated to be in the range of Rs 1,500-2,000 crore. 

The similarities in names at times causes confusion among media, investors and physicians. Cadila Healthcare has thus chosen to build a brand identity for the Zydus brand. 

“It is a million-dollar question whether or not to drop the Cadila name from the holding company. It reflects our roots," said a source in Cadila Healthcare, adding that after much deliberations it has ruled out the possibility of changing the name of the holding company. 

He elaborated, “At the time of the split, it was decided that only one Group company can use the name Cadila. Accordingly, the holding company is called Cadila Healthcare. But, the subsidiaries do not carry that. In fact, almost all subsidiaries carry the Zydus name and it would continue to be like this.”

The group’s website is called Cadila Healthcare’s 2016-17 annual report mentions the name Zydus 327 times and its employees are known as Zydans. 

Apart from recently spinning off the domestic formulations business into a separate subsidiary Zydus Healthcare Ltd, some of the other key subsidiaries that carry the Zydus name are  Zydus Animal Health, Zydus Hospira Oncology, Zydus Healthcare USA (LLC), Zydus Wellness etc. 

Of these, Zydus Wellness, the group’s personal care arm is listed. Analysts feel creating a separate subsidiary for the India formulations business creates the opportunity to go for a listing at a later date if required.

The story so far 
  • Cadila Laboratories was formed by two friends Ramanbhai Patel and IA Modi in 1952
  • In 1995 Patel and Modi families split the biz
  • Modi family’s share was moved to Cadila Pharmaceuticals
  • Cadila Healthcare became the holding company for the Patel family
  • Cadila Pharma remained privately held; now headed by Rajiv Modi, IA Modi’s son
  • Cadila Healthcare got listed in 2000; 
  • Pankaj R Patel, Ramanbhai’s son heads it
  • Cadila Healthcare is the flagship firm of Zydus Group
  • From a turnover of Rs 250 cr in 1995, it swelled to Rs 9,600 cr in FY17

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel