I'm determined. I'm not passionate: Dilip Shanghvi

Sun Pharma chairman and managing director Dilip Shanghvi reveals the secrets behind his leadership tenets of research and acquisition in an interview with Forbes India. He says his weight loss molecule, undergoing trials, can be a blockbuster

By Naini Thaker , Suveen Sinha

Published: May 2, 2025 02:49:26 PM IST

Dilip Shanghvi, Managing director, Sun Pharma Image: Mexy Xavier

Sun Pharma Chairman and Managing Director Dilip Shanghvi reveals the secrets behind his leadership tenets of research and acquisition in an interview with Forbes India. He says his weight loss molecule undergoing trials can be a blockbuster. Edited excerpts:

Q. What is your approach to acquisitions? You have made quite a few, some of which were blockbusters, such as Ranbaxy and Taro. What are the learnings from those?

Whenever you do an acquisition, you have to ask some questions and answer them so that you have clarity.

So, first of all, whether that acquisition is strategic in nature, whether it helps you go further in the direction in which you wish to go. The second is whether you can run that business better than the present owners can. The third would be the issue of culture, whether you can manage the change in culture, and also some potential negative impact of the acquisition in your existing business.

Whenever you do an acquisition, it takes up the time of the senior management. Which means the time available to them for running the routine part of the business is reduced. That has clearly some negative impact on your natural growth, so you have to factor that also into your consideration.

If, after all of this, the answer is that it makes sense for us to do that, we consider it.

Q. You faced a fair bit of tough times between 2014-15 and 2018, which was also sort of an inflection point for the company. How challenging was it for you then? And how did you turn things around?

A few things happened during that period. We did the Ranbaxy acquisition overnight. I think the size of the business doubled, the number of plants that we were managing doubled, the number of people we were managing doubled. And also for most of the senior management, it kind of doubled their workload. They learnt on the job, how to manage the increased complexity… That was a disruption.

The second thing which happened during that period was that the US generic market changed significantly. And we lost almost a billion dollar in terms of top-line, without losing any volume. So, the billion dollars also went out of the bottom-line. We had to rebuild the profit stream.

And then there was a distraction in terms of a whistleblower complaint, which kind of created unnecessary distraction for most of the people, including the senior management.

I’m happy we came through all of these challenges with a reasonable degree of success. We built new profit streams so that the loss of profitability in generics is made-up from other businesses. That profit started growing again, and the whistleblower complaint kind of petered out because it was a technical violation.

Q. Sun Pharma took an early bet on R&D and the innovator side of things. What convinced you to bet on this fairly early on?

Philosophically, we look at our business as one which helps Indian patients or patients in our markets solve complex disease problems. There will be many products either available at a very high price or not available. We will focus on them… how can we bring this product to market faster.

Also read: Dilip Shanghvi has built Sun Pharma by making bold bets. And he's not done yet

Q. Right now, we believe there is a new molecule in the works for weight loss and obesity. How excited are you about it? And what is the progress so far?

It (obesity) is a global problem. I can also use it (laughs). More than obesity, I think diabetes and many other potential uses of GLP-1 excite us. We have generics of existing products that we find, plus we are actively pursuing our own GLP-1 in clinical trials.

Q. When you decided to focus on R&D, did it cross your mind that some other Indian pharma companies had also talked about R&D in a big way... Ranbaxy, Reddy’s, Glenmark. Did your shareholders question you about putting so much money in this?

A significant part of our spend is for generic products. Last quarter also, the specialty R&D was about 35 to 40 percent. So 60 percent is still for generics, which produces short-term cash flow, new products, and all of that.

While we continue to invest in innovative products, our approach is that we want to invest in short-term, medium-term and long-term outcome investments. Some of the investments we will make, say, like a GLP-1 would be a long-term investment. When it comes, it can potentially change the complexion of the company.

Q. Your colleagues say you are a humble man and yet a very passionate man.

Humble, I agree. I don’t know about passionate.

Q. How do you balance the two? Because when you are passionate about work, you tend to...

I think I am determined. I’m not passionate. Because passion talks of emotion. I am not really very emotional.

Q. Not about the company?

No, never.

Q. But this company is your life...

No, my family is my life. I have a clear separation between business and family. But I would like to succeed in whatever I do. Since Sun Pharma is what I do, I want to be successful in it. But if I don’t succeed, I don’t get upset.

Q. Your son and daughter are in the company. What it is like to have your children working alongside?

It has worked out quite well till now… both my children have significant capability to do self-assessment and introspection. They have the ability to look at what is it that they did which worked, what is it that they did which did not work. And they keep on doing self correction.

I don’t interfere with their process of learning, because my own experience is that experience teaches you much more than what anybody else will teach you. I want them to learn by experience.

Q. A lot of family businesses in India have not quite got the succession part right. Did you start thinking about it at an early stage?

I don’t think there is any grand plan. It is up to my children to decide whether they want to be active managers or owners. I’m happy with whatever their decision is.

Q. How do you look back at the Ranbaxy acquisition? If you have to do it all over again, will you do it any differently?

There are two questions. One is whether we would do it or not. The answer is, we would do it. The second is whether we would sign the agreement differently. Maybe there would be a few things, but that’s not material. Philosophically, I think it was a major stress for the management when we acquired the business, but it has ended up making us stronger.

Q. It did not prevent you from making more acquisitions.

And we will continue...

Q. Anything on the cards?

We are always on the lookout. I have also told people that we believe that we have integrated Ranbaxy well with the company, and we have the capacity to look at future opportunities.