So, Mr. Sanghavi, congratulations once again.
And I know ideally I should let you go and enjoy this moment, but I don't think we want to miss this opportunity of learning experience and wisdom from you. So, if you'll allow me just 10-15 minutes. And I think the best place in a way to start is to, you know, your leadership has been set apart because of your willingness to see opportunity where others see distress. You have, in the last couple of years, about six companies which were multi-cultural, multi-country, and the latest has been in a way Organon. So, when you walk into a distressed business, what do you look for that others don't? Do you evaluate companies differently from how investors do?
No, I think it's a misconception that I would like to clarify, is that we don't buy distressed companies per se, but we buy companies which we think we can run better than the current owners. But more important than that, I think we need to see whether it is strategically important for us to acquire that business. So, every one of the acquisitions, in addition to being our ability to create wealth and value for our shareholders, we also look at how it will advance our long-term business objective to making Sun Pharma a global company.
But is there a different way that you're actually evaluating than what investors do? Or, you know, how do you see and evaluate a distressed company? Or a company which you see as opportunity?
No, like what I said, say if you look at we acquired Ranbaxy. And at that point of time, I think it was more or less same size as that of Sun Pharma in terms of top line, in terms of bottom line, not as big. But it was 15% of Sun Pharma's value. And we acquired it for equity. So, there was no financial commitment. But we knew the business. We also knew the markets in which they were present. We knew what was their R&D capable of because we have seen them work in the past. So, we found ways to ensure that the intrinsic strength of the company, we gave them an opportunity to come out. So, today I think large part of converting Ranbaxy from what it was at that time to making it as successful as the Sun part of business is what we are seeing in the value creation of Sun Pharma shareholders.
In the same way, I think Organon is identical to Sun in terms of size, $6.2 billion. More or less identical in terms of profitability. Let's say they are $1.9 billion, we are $1.8 billion. But in terms of valuation, they are less than 25% of Sun value. The key reason is that our business is growing at close to 10% and they are growing at 1 to 2%. So, if we are able to find a way to revive the growth in the business to give it much more focus on R&D and strategic direction, we can create huge shareholder value for both the businesses, and that's I think our objective.
Many acquisitions actually fail at the integration level. Particularly when they involve different cultures and different countries. In a way, is it people and culture that are harder to fix, or processes and operations? What are the three first things that you do when you have to acquire a company like that?
I think first of all recognize the importance of culture in making any business successful. Because all businesses succeed because people work effectively as a team and they work with a view to growing the business. So you need to create an environment where people feel wanted, respected and valued for what they can contribute. Sometimes they may not have the strategic direction or the investment resources which are required to make the business successful. So if you make that clear to people that we will evaluate for your success and not for failure because all of us make mistakes. So if you start evaluating people for failure it kind of restricts people from taking difficult decisions. So I think in case of all our previous acquisitions, I think we've been able to find a way to strengthen the capability. I mean, not many, almost all our acquisitions, the same team have become very successful. We haven't had significant leadership change in the businesses that we acquired.
Wow, that's awesome. I think most organizations, when integration happens, I totally agree, you know, there's so much change and especially the first thing that changes is leadership, and that's really heartening to know and a great lesson for a lot of us. Okay, let me put it. India is called the pharmacy of the world. We supply to 200 countries. We're a large provider to the US. Sun Pharma is number one in our country, but you're also number five, if not more now because of Organon, in the US. Do you believe Indian Pharma has become a form of soft power for India?
No, I think India clearly contributes to working towards global health because we are an important supplier of high-quality, cost-effective medicine. What I think we are looking for as a country is how can we innovate also in India? How can we solve problems of different diseases which current treatment options cannot? And I think our government is working with the industry in terms of creating, they've created two schemes by which research in India is encouraged. They're making changes in the regulatory framework which hinder the innovation. But I am reasonably sure that in next few years we will have many products coming out of India which are globally helping patients.
Sure. I think all industry conversations start with AI these days. So healthcare could be one of the biggest beneficiaries of AI. Sun Pharma has historically, and you know, if you look at the book, it says it actually puts great value on the relationship between medical representatives and doctors. Do you see AI changing that relationship or making the human relationship even more important?
No, we clearly see AI strengthening our medical representatives' ability to build better relationships with doctors and also be truly helpful. But apart from medical representatives, I think use of AI in research, use of AI in strengthening manufacturing and regulatory capability is immense. And I kind of look forward to embracing AI so we can become a much better company.
