Shaily Engineering Plastics

Founded by Mahendra (Mike) Sanghvi, Shaily has evolved from a small two-injection moulding machine setup to 200+ currently. Mr. Sanghvi is a chemical engineer from Wayne State University, USA, and a plastics technologist with an MBA from Toronto University, Canada. He started his career in the early 1970s, working in the North American plastics industry, gaining experience in plastic injection moulding, before returning to India to start Shaily.

Shaily Engineering Plastics manufactures precision plastic components and assemblies using injection molding of high-performance engineering polymers for healthcare, consumer, personal care, and automotive sectors. They specialize in drug delivery devices like pen injectors and autoinjectors for pharmaceutical companies, household products for global retailers, and precision automotive components. The company serves Fortune 100 companies globally including pharmaceutical firms like Sanofi and TEVA, consumer brands like IKEA and Unilever, and automotive companies like Honeywell-Garrett.

How They Make Money

Consumer Products: Manufactures plastic items for home furnishing, kitchen, cooking, eating, organizing and storage products that are exported globally, primarily to IKEA stores worldwide.‍

Healthcare: Makes drug delivery devices including pen injectors and auto injectors, primary pharmaceutical packaging like tamper-evident closures, HDPE bottles, child-resistant closures, eye droppers, and precision components for medical devices sold to pharmaceutical companies.‍

Personal Care & Automotive/Engineering: Produces packaging for personal care brands and ultra-high-performance plastic components for automotive applications like turbocharger parts.

GLP-1 Opportunity : The Core Growth Driver

Shaily has emerged out as one of a handful of global manufacturers of the GLP-1 auto injector. This is a large opportunity with the generic GLP-1 launch lined up for 2026 in key markets like Canada, Brazil , India, China among others. With 23-24 clients already contracted, per the management. The entry barrier in this segment is significant, given Shaily's patented technology and regulatory requirements for filing delivery modes makes it difficult for pharma company to change their injector vendors. Limited capable global firms and thus capacity for manufacturing devices makes Shaily key in the supply chain.

The global GLP-1 market presents a substantial addressable opportunity as these drugs lose patent protection. Semaglutide (Ozempic/Wegovy) patents expire in CY26 for emerging markets (Brazil, India, Canada) and CY32 for developed markets (EU, USA). Tirzepatide (Mounjaro/Zepbound) patents expire in CY36 across markets. We wrote our primer on GLP-1 drugs in august ( link ), check this to understand the GLP-1 drug market landspace and second order effects in greater detail.

What's Shaily's role in GLPs?

Shaily, over the years of manufacturing insulin pens, has developed capabilities to manufacture pens for administering GLP-1 drugs, which are largely injectable. Currently, Ypsomed AG, a Swiss company is manufacturing pens for the innovator, Novo Nordisk in the case of semaglutide. The play for Shaily is when these molecules go off patent. Given the large addressable market and the improving penetration due to its efficacy, we expect generic launches to be targeted in geographies it goes off patent. To cater to the diverse needs of generic manufacturers, Shaily has developed a platform of pens for delivery across molecules.

Shaily has developed eight patented platforms:

1. Protean: Cost-effective disposable/reusable pen injector for 0-60 units insulin, settable for alternate therapies

2. Neo: Variable or fixed dose spring-driven pen injector for GLP-1 therapies (globally only Shaily and Novo Nordisk have spring-driven technology)

3. Axiom: Fixed-dose pen injector for Teriparatide/PTH/FSH applications

4. Maxim: Premium reusable/disposable pen injector for 0-80 units insulin/GLP-1 with improved usability features

5. Harmony: Variable or fixed dose pen injector

6. Tristan: Auto-injector for 1.0ml-3.0ml PFS and cartridge-based delivery of Tirzepatide and Dulaglutide with automatic needle insertion

7. Toby: Auto-injector for 1.0ml-2.25ml PFS-based delivery of Semaglutide

8. Mira: Wearable auto-injector configurable for subcutaneous or intramuscular injection with customizable injection times

Key growth trigger for Shaily remains how well they can scale the healthcare segment, which has higher margins and a superior return profile. The company has a 50-60% market share in GLP-1 pens, providing a strong bull case for growth. Apart from the GLP-1 opportunity, Shaily has optionalities in consumer electronics and semiconductors, which management has not provided details on yet.

Competitive Moat

Shaily competes with a handful of global players in the pen injector space, including Swiss giant Ypsomed AG, Becton Dickinson, Gerresheimer, and SHL Medical. What's interesting is that most of these companies serve diversified therapy areas beyond just GLP-1s, given their size and scale.

Shaily's competitive advantages in the GLP-1 space are:

1. High Switching Costs: When pharmaceutical companies file their generic drug applications, they must specify the delivery device vendor. Changing vendors later requires refiling with regulatory authorities - a costly and time-consuming process that creates significant friction.

2. Capacity Constraints: The global insulin market and now GLP-1 market are dominated by a few key manufacturers. With Ypsomed and Becton Dickinson already committed to supplying innovators, their available capacity for generic manufacturers is limited. Given the long lead times for regulatory approvals and the specialized capabilities required for manufacturing without patent infringement, new competition faces substantial barriers to entry.

3. India's Generic Manufacturing Edge: India's robust generic pharmaceutical manufacturing base positions Shaily favorably. With many domestic generic manufacturers launching products globally, Shaily benefits from being the only Indian company with these capabilities, offering proximity and partnership advantages.

Other business verticals

Consumer (71% of revenue in FY25)

Shaily's consumer segment is divided in to three key verticals, 1) home furnishings, 2) personal care FMCG packaging; and 3) carbon steel furniture. It is in the process of adding consumer electronics as another vertical. Over the years, it has also developed secondary capabilities such as ultrasonic welding, vacuum metalising, highspeed rotary pad printing, polymer painting, screen painting, hot stamping and hot filing, to augment its offerings and increase wallet share with its customers. The focus remains on improving capacity utilisation by gaining new customers and going deeper within existing customers. Currently, the business is impacted by tariff-related challenges as global clients realign their sourcing requirements given Shaily competes with other emerging economies that currently have more favourable duty rates. Any expected reduction in tariffs through an India-US trade deal could aid Shaily's positioning. Management has alluded to potential opportunity in semiconductors, whose developments remains to be seen.

Industrial (8% of revenue in FY25)

Within its industrial segment, Shaily manufactures automotive components like knobs, casings of electrical household appliances and other high performance engineering products. Its core strategy is to provide solutions which enable a shift from metal to high performance plastics. It is a very small segment and i don't assume much exciting things from here.