to Shareholders
Dear Shareholders,
As your Company turns eighteen this year, I am happy to share with you
that we are in a different growth orbit now. Alongside becoming a Top-20 company in the
domestic pharma market, we also crossed a significant milestone of Rs. 1,000+ crore of
EBIDTA this year. Your Company is well on course to evolve into a superspecialty business
with higher share of revenue coming from segments with significant entry barriers and
backed by strong technology platforms. Your Company is also on the threshold of evolving
from an "India-only" business to an "India + RoW Exports" business.
This journey will be accompanied by superior growth and return outcomes for all
stakeholders.
We undertook a series of strategic diversification initiatives over
FY23 to FY25 with an investment of nearly Rs. 4,000 crore. I am happy to share that all
these investments have been successfully integrated with substantial synergies and margin
expansion having been realised in all acquired businesses. Now over 30% of our Domestic
Branded Formulations portfolio is in "high-growth and defensible" therapies, up
from 9% in FY22.
The upcoming disruptions and LOE opportunities in the Injectable
Anti-Diabetes therapy undoubtedly make it the most exciting growth story in the industry
and your company is ideally positioned to make the most of it.
• A market-leading Anti-Diabetes franchise with a Top-5 rank and a
formidable commercial engine; the only Top-5 Diabetes company with leading positions in
Oral as well as Injectable anti-diabetes products
• An exciting Diabesity pipeline consisting of Insulin Analogs,
GLPs and Analog-GLP combinations; well positioned to leverage the democratisation of a Rs.
3,700+ cr. p.a. market hitherto dominated by Innovators
• Clear "right to win" in Diabesity/ GLPs on the back of
our Insulin franchise and Patient Care/ Service Platform
• Vertically integrated manufacturing with the combination of our
Bhopal and Chennai (Levim) facilities
We have made transformational investments in our R&D, Technology
and Manufacturing platforms over the last two years. Starting with one manufacturing
facility in Guwahati, we now have manufacturing operations across six globally accredited/
compliant units, deploying a diverse suite of technologies to manufacture a wide range of
products - small as well as large molecules - across a range of high-value presentations
like Biologics, Sterile Injectables, Topical Formulations and Oral NDDS formulations.
We have also invested significantly in expanding our leadership cadre
in FY25. Our Domestic Formulations business has been realigned into 3 SBUs (Strategic
Business Units) and we have strengthened the SBU Leadership team. We have also enhanced
the leadership in our Sales & Marketing teams. Our technology investments have been
accompanied by several new hires in the disciplines of R&D, Quality, Regulatory and
Operations.
While our R&D, Manufacturing and Technology investments were
undertaken to step up our game in the Domestic Formulations business, these investments
have now placed us on the threshold of a large international opportunity. While it is too
early to quantify what share of this opportunity we will eventually take, we have several
initiatives underway to harness the synergies between our manufacturing assets and Swiss'
global distribution reach. We are also building an EU-focused CDMO business focused on
exclusive contracts for specialty generics. On the back of these initiatives, we believe
that we have the opportunity to double our International revenues by FY28.
While we continue pushing for growth, we always remain true to our
financial discipline and key operating metrics.
• Operating margin of 35% over the last 8 years - the highest in
the industry
• Cash conversion ratio of ~ 80% of EBIDTA over the last 8 years -
and 105% in FY25
• Average acquisition multiple of 10-12x EBIDTA (one- year
forward) for all deals done so far
As we look ahead, your Company stands stronger than ever, with a robust
product portfolio, a sharp focus on high-growth therapies, and a strategic roadmap that
blends domestic leadership with global aspirations. With strong execution, differentiated
capabilities, and a patient-centric approach, we are confident of delivering sustainable
growth and superior returns to all stakeholders in the years to come.
With Warm Regards,
| Amit Bakshi |
| Chairman and Managing Director |