MESSAGE FROM THE CHAIRMAN & MANAGING DIRECTOR
Pursuing Purpose-led Growth
Dear Stakeholders,
I hope you will find the Annual Report 2022-23 to be engaging and informative, as it
provides a comprehensive overview of how Granules is managing its business in an
increasingly integrated manner to reflect our new purpose of ‘Healing lives
responsibly through pioneering green science'.
A Year of Growth
I am pleased to report that our Company's performance has shown significant improvement
over the past year. In FY 2022-23, we experienced a 20% surge in revenue, accompanied by
impressive growth rates of 27% in EBITDA and 25% in PAT.
In terms of operating cash flow, FY 2022-23 was an outstanding year. Thanks to our
strategic initiatives, we successfully generated a robust operational cash flow of Rs.
7,387 million. Despite incurring buyback expenses of Rs. 3,110 million and unanticipated
capital expenditures of Rs. 919 million for our green technology initiatives, our net debt
increased by a modest Rs. 705 million compared to the previous year.
Our revenue growth is particularly noteworthy considering the ongoing price erosion in
the US market and the distribution challenges we encountered with our previous third-party
logistics provider. This growth can be attributed to the significant increase in sales of
API and FD products, particularly in key markets such as the US and EU.
During the year, we have successfully filed seven ANDAs with USFDA, two dossiers in the
EU, and two ANDAs in CA. Additionally, we have submitted seven US DMFs and five CEPs.
Furthermore, it gives me immense pleasure to announce that we have received approvals for
five ANDAs from the USFDA during the same period.
Our capital expenditures for the year amounted to Rs. 4,106 millions underscoring our
commitment to investing in our future growth.
We have made substantial enhancements to our paracetamol API capacity and anticipate a
surge in MUPS block utilization for the upcoming financial year. Furthermore, we are
actively expanding our footprint in the EU through strategic business partnerships and the
sale of dossiers for our FD products.
Notably, the construction of the new formulation facility at Genome Valley is
progressing at a good pace, and we anticipate the completion of Phase 1 by October 2023
and Phase 2 by May 2024. Upon completion, this plant will augment our current capacity of
24 billion units of Finished Dosages (FDs) by an additional eight billion units.
Additionally, we successfully launched our new greenfield packaging facility in
Virginia, USA, and obtained FDA approval. The integration of this facility will
significantly bolster our operations in both the OTC and Rx segments of our portfolio. It
will also enable us to optimize our supply chain efficiency in the US, resulting in cost
reductions and an improved working capital cycle.
Investing in Innovation and R&D
During FY 2022-23, our primary focus was on fortifying our R&D and product
development capabilities through innovation and advanced technology platforms. By
allocating a significantly higher budget for R&D expenditure, we aim to establish
Granules as a research and development-driven organization.
These strategic initiatives are geared towards expanding our capabilities, improving
the quality of our portfolio, and increasing the number of regulatory filings.
Granules' Commitment to Combatting Climate Change
Climate change represents one of humanity's most pressing challenges. Its impact
extends beyond borders, posing profound challenges to the stability of nations, economies,
and ecosystems. Consequently, our planet and society face significant obstacles. The
economic consequences of climate change are extensive, affecting industries, supply
chains, and financial systems on a large scale.
Building a successful business involves identifying and addressing the problems society
faces. In the face of the climate crisis, corporations have a crucial responsibility to
pioneer innovative solutions and drive positive change. Customers are increasingly seeking
sustainable products and services, and businesses that can meet this demand will be
well-positioned to succeed in the years to come.
By aligning purpose and profit,
Transforming Healthcare through Innovation and Sustainability
As a reflection of our commitment to combat climate change, we have entered a
partnership with Greenko to establish the integrated green pharmaceutical zone in
Kakinada, Andhra Pradesh. To support this endeavor, we have established Granules CZRO, a
wholly-owned subsidiary of Granules India Limited. This subsidiary is dedicated to
manufacturing products with a near-zero carbon footprint. We have made substantial
advancements in developing various technologies for this purpose and have also formed
partnerships with esteemed academic institutions and companies to drive innovation in this
domain businesses can reshape the world for the better, leaving a lasting legacy for
future generations.
Sustainability Initiatives at Granules
Granules has taken a deliberate approach to embedding sustainability within its
business operations and decision-making process. Driven by a strong sense of environmental
responsibility, Granules is dedicated to achieving Net Zero by 2050, further affirming its
commitment to a sustainable future.
During the year, we completed the baselining process, benchmarked sustainability
practices, and conducted a materiality assessment. Moving forward, Granules intends to
establish and communicate comprehensive goals to all stakeholders, across the identified
material areas. Our ambition is to become an industry leader and a global frontrunner in
sustainability, driving positive change at scale.
Transforming for the Greater Good
Amidst an ever-changing business landscape, we embrace the potential of innovation and
adaptability. Our transformation journey rests on a 2050.
Granules' Net Zero target year steadfast dedication to creating a future-ready
organization, capable of thriving in the face of evolving challenges and seizing emerging
opportunities. We aim to develop the necessary capabilities and competencies that propel
us toward enduring success in today's fiercely competitive environment.
As we embark on this ongoing journey, with careful deliberation, we have revitalized
our purpose, vision, and values, ensuring they embody our commitment to transformation. As
you read through the report, I hope you gain an overview of what we mean.
In Gratitude
Let me conclude by expressing my heartfelt gratitude to the Board of Directors for
their continued guidance. My deepest appreciation goes to our employees for their
dedication and pursuit of excellence. Finally, I would also like to extend my gratitude to
all our stakeholders for their continued faith and confidence in us.
With best wishes to you and your families,
Dr. Krishna Prasad Chigurupati
Chairman & Managing Director