Dear Shareholders,
The financial year 2024 has been a truly transformational year for JB
Pharma, with headwinds and tailwinds to navigate and we have successfully emerged of it,
by demonstrating resilience, agility and unstoppable executional excellence. We have
constantly aimed higher, achieving unprecedented business highs, at the same time, stayed
grounded in our fundamentals, and fulfilled organisational objectives of capability
development, driving cost efficiencies and making the organisation future ready.
Building on the rich legacy and solid foundation of the company, we
have successfully carried the organization towards becoming more sustainable and
responsible, creating significant value for all our stakeholders. At the base of this
growth story, 'our people' continue to remain our biggest assets, displaying unwavering
dedication, tireless efforts, and relentless commitment to excellence at every step of the
journey. Their collective hard work and innovative spirit have propelled the company to
new heights and I wish to extend my heartfelt gratitude to each member of our team for
this co-created transformation.
Over the past three years, we have seen significant growth not just in
our top line, but also improvement in EBITDA, profitability, net working capital, and
operating cash flows. We have sustained our performance momentum, where revenue grew at
19% CAGR to INR 3484 crores in FY24 from INR 2043 crores in FY21 including
contribution from acquisitions. Operating EBITDA grew at 19% CAGR to INR 939 crores in
FY24 vs INR 560 crores in FY21. Net working capital has improved to 87 days in FY24 from
98 days in FY21. Operating cash flows as percentage to operating EBITDA improved to 85% in
FY24 from 56% in FY21. These figures highlight not only our growth ambitions, but also our
strategic vision towards making the business profitable and sustainable for the coming
future.
Outpacing the market with all-round growth in domestic business
The highlights of FY24 include steady increase in domestic business
outperforming the industry growth, led by outstanding growth in the chronic portfolio,
building big brands bigger, innovative therapy building initiatives for patient-benefit
and foray into the ophthalmology segment amongst others.
We now rank #22 in the India Pharmaceutical Market (IPM) (IQVIA
MAT Mar'24) and remain amongst the fastest-growing companies in the Top 25 with a 10%
year-on-year growth rate vs industry growth of 8% in FY24. We maintained our momentum
in driving above-market volumes and increasing our market share in core therapeutic areas.
All five of our major brands - Nicardia, Cilacar, Rantac, Metrogyl, and Cilacar-T -
have achieved rankings within the top 150 brands in the IPM (IQVIA Mar'24). Our
brand portfolio continues to strengthen through effective Product Life Cycle (PLC)
management, further bolstered by a strong focus on sales force excellence and automation.
As a result of the renewed go-to-market strategy implemented in FY22, our focus on
progressive therapies such as cardiology, paediatrics, gastroenterology, probiotics and
our rigour in launching new introductions continues to reap benefits for the domestic
market.
Our strategic focus on chronic therapies has been particularly
rewarding, growing at a rate of 14% as against IPM chronic growth of 11% y-o-y (IQVIA MAT
Mar'24). Specifically, in cardiology therapy, our emphasis on heart failure, hypertension,
and lipid management therapies have delivered impressive outcomes. In the cardiology
market, we have ascended to #8, climbing 6 positions in just three years. Notably,
our brands Cilacar, Nicardia, and Cilacar-T are now among the top 20 brands in the
cardiology segment.
Additionally, we rank #16 in terms of prescription with Rantac and
Metrogyl being amongst the top 10 most prescribed brands in the IPM.
Our recent venture into the rapidly expanding Ophthalmology market, with
the trademark licensing agreement for 10 ophthalmology brands with Novartis Innovative
Therapies AG, Switzerland in December 2023, has made us rank amongst the top 4 Indian
Ophthalmology players in our covered market. We have seamlessly integrated this
ophthalmology portfolio into our business operations and strive further to make this
portfolio gross margin accretive for JB, post grant of perpetual license in Jan, 2027.
International Markets and CDMO
International business recorded consolidated revenue growth of 5% to
INR 1587 crores in FY24 vs INR 1509 crores in FY23. ROW branded generics business
delivered strong growth on the back of new launches; US business registered mid-teens
growth and the CDMO business continued its growth trajectory of clocking INR 400+ crores
revenue in FY24 as well; registering a compounded annual growth rate of 31% in 3 years.
However, overall revenue growth was influenced by strategic decisions made in our
international operations, particularly in South Africa. Our operations in Russia have also
shown promising growth this FY24. New concepts in lozenges manufacturing and entry into
new geographies (UAE) have sustained the accelerated growth for our international
business. We continue to remain bullish on increasing demand in our covered
international markets in the future.
Notably, CDMO business for us is now 27% of the total international
business as compared to 20% in FY21. Anticipating a rising demand for high-quality
lozenges, we are expanding our manufacturing capacity annually. Looking forward, we plan
to diversify our lozenge portfolio by entering into new categories such as sleep
disorder, pain management, immunity boosters, and anti-inflammatory products.
Additionally, our focus on introducing newer technologies for sustaining our
technological lead in herbal and medicated lozenges manufacturing underscore our
commitment to sustained growth and leadership in the global market. With these strategic
initiatives in place, we are targeting to achieve $100 million in revenue from our CDMO
business within the next three to five years.
Building a sustainable future for good health We prioritize advancing
our Environmental, Social, and Governance (ESG) initiatives, integrating responsible
practices throughout our entire business. Our efforts have led to a 9% reduction in total
energy consumption within the organization and a 16.67% reduction in Scope 1 and Scope
2 emissions in FY24 compared to the previous year. Additionally, we have implemented
various green initiatives such as renewable hybrid power supply and zero liquid discharge
sites. In FY23, we published our 2nd ESG report aligned with international standards like
the Global Reporting Initiative (GRI) framework, and integrated it with the Sustainable
Development Goals (SDGs). This underscores our dedication to fostering a sustainable
future and promoting transparency in our journey towards achieving our ESG objectives.
We are deeply committed to corporate social responsibility (CSR) and
actively engage in a variety of initiatives. Our CSR efforts span healthcare, education,
environmental sustainability, poverty alleviation, and responding compassionately to other
societal needs as they arise. These initiatives reflect our dedication to making a
positive impact beyond business and contributing meaningfully to the communities in which
we operate. Diversity, Equity and Inclusion (DE&I) is another significant area I want
to highlight. We have seen female representation in FY24 within our company at 11 % of
the permanent workforce and with the implementation of JB's new dE&I charter, it
will continue to remain a key growth area for us in the coming times.
Looking Ahead
Looking forward, we are enthusiastic about the opportunities ahead. Our
dedication to delivering lasting value to shareholders, upholding exemplary corporate
governance, and positively impacting our communities remains unwavering.
With a continued focus on our domestic business and CDMO business, we
are poised for sustained revenue growth and while doing so, we remain anchored to our
purpose of contributing to healthcare, supporting healthcare providers, and enriching
patients' lives. As we embark on this new chapter, I am confident that the growth
trajectory for JB Pharma is only going to be 'Onwards & Upwards' from here on. Let
us continue to collaborate, support one another, and make the upcoming year our most
successful yet.
Thank you for your unwavering support and dedication.
Your's sincerely,
Nikhil Chopra