Jubilant Pharmova Ltd

During FY 2023, we witnessed stable revenues driven by growth in Radiopharmacies, CDMO-API, Allergy Immunotherapy and Drug Discovery Services businesses. This was offset by lower revenues in CDMO Sterile and Generics businesses. While Radiopharmacies business witnessed growth from launch of new products, CDMO-API, Allergy Immunotherapy and Drug Discovery Services businesses reported higher volumes. During the year, the Generics business was impacted by pricing pressure in the US market, lower volumes due to import alert and decline in Remdesivir sales as the COVID-19 pandemic eased. The CDMO Sterile business reported lower revenues as in preceding year it witnessed higher one-off COVID-19 related business.

In Q4 FY 2023, the Company's Nanjangud API facility received the US FDA clearance with 'Voluntary Action Indicated' classification. In May 2023, for the CMO Montreal facility we received the 'Official Action Indicated' (OAI) classification from the US FDA pursuant to the regulatory agency's audit in February 2023. We have further strengthened the quality governance at the Board level in our efforts to implement best in class quality and compliance standards across our various operating facilities. We are engaging with the US FDA and are aiming towards quick resolution of the Import Alert situation at the Company's Roorkee manufacturing facility and of the OAI classification at the CMO Montreal facility.

In CY 2022, global economy witnessed slowdown in growth impacted by the Ukraine - Russia conflict, persistently high inflation levels across all major economies in the world and slowdown in the Chinese economy that was affected by numerous lockdowns imposed to control the COVID-19 pandemic.

As per IMF, the global economic output stood at 3.4% in 2022 from 6.1% in 2021. The global economy's growth is forecast to further slow to 2.8% in 2023 driven by significant slowdown in major Advanced Economies such as the US, EU, UK and Canada. The slowdown in the Advanced Economies is led by the tight monetary and fiscal policies adopted in these countries to rein-in the stubbornly high inflation levels that reached several decade high marks. While inflation in most key markets have started trending lower, it is expected to continue at higher than desired levels for longer than previously expected.

The Indian economy grew by 7% in FY 2023 as compared with 9.1% growth in FY 2022. Full year GDP was affected by margin compression in industrial sectors owing to higher commodity prices, which was moderated by strong performance in the services sector. As per World Bank, in FY 2024, the GDP is expected to grow by 6.3%. Higher energy prices and a less than normal Southwest monsoon in 2023 pose downside risks to the Indian economy.

We are an integrated global pharmaceuticals company, present across the entire pharmaceutical value chain. We take pride in our positioning as one-stop-shop in the global pharmaceutical market supplying products and services to customers in over 85 countries. Our diversified businesses are segmented in six major verticals namely 'Radiopharma', 'Allergy Immunotherapy', 'CDMO Sterile Injectables, 'CRDMO, 'Generics' and 'Proprietary Novel Drugs'.

We are globally recognised as a 'Partner of Choice' by leading pharmaceutical companies and our strength lies in the unique offerings of pharmaceuticals and services, especially in niche Specialty businesses of Radiopharma and Allergy Immunotherapy.

We are engaged in continuous improvement of products and processes to enhance quality and cost competitiveness in order to build value for our customers. As a responsible corporate citizen, we are committed to safeguarding the environment and maintaining a triple bottom line approach of sustainability through delivering a high social, environmental and economic performance.

The Company is engaged in manufacturing and supply of Radiopharmaceuticals with a network of 46 Radiopharmacies in the US, Allergy Immunotherapy, Active Pharmaceutical Ingredients (APIs), Solid Dosage Formulations and in the Contract Manufacturing of Sterile and Non-Sterile products through six manufacturing facilities that cater to all the regulated markets including the US, Europe and other geographies. We have created several competencies including an innovative product portfolio in Radiopharma and Allergy Immunotherapy with high entry barriers and limited competition, market leadership in key products and business segments.

The Drug Discovery Services business provides collaborative research and partnership for Drug Discovery through two world class research centers in India. The business has doubled its capacity at the Greater Noida facility, which became operational in August 2021. We are further adding capacity in this business given the robust long term growth outlook.

In the 'Proprietary Novel Drugs', our lead program - LSD1/ HDARS. 6 inhibitor is undergoing Phase I/ II clinical trials and another program PRMT5 has received Investigational New Drug Application (IND) approval and is expected to start clinical trials in FY 2024. The Company has two other molecules which are on track to receive IND approval.

From FY 2023 onwards, we have reorganised our reporting segments as below:

• Radiopharma

• Allergy Immunotherapy

• CDMO Sterile Injectables

• Contract Research Development and Manufacturing Organisation (CRDMO)

• Generics

• Proprietary Novel Drugs

At Jubilant Pharmova, we have embarked on a transformational journey to become a digitally agile company, transforming patient and stakeholder experiences. This endeavour empowers us to reimagine our operations across the entire value chain. Over the past year, we have embarked on a journey to setup a robust foundation for the transformation and preparing for an exciting digital future. As we move forward into an exciting digital future, we continue to invest across people, process and emerging technologies to build a Jubilant Pharmova 2.0 with best in class technology platforms to support the Company in creating value and driving growth for its stakeholders.

Total Revenue from Operations in FY 2023 stood at RS. 62,817 million vs. RS. 61,302 million in FY 2022. International revenue was at RS. 60,911 million, with a share of 97% to the total revenue.

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) was at RS. 8,146 million vs. RS. 11,676 million, with a margin of 13.0% as compared with 19.0% in FY 2022. Depreciation and amortisation in FY 2023 was at RS. 5,540 million vs. RS. 3,817 million in FY 2022. In FY 2023, Depreciation and Amortisation included an impairment charge of RS. 1,714 million related to intangible assets vs. RS. 154 million in previous year.

Finance cost stood at RS. 1,882 million vs. RS. 1,455 million last year. Profit After Tax came in at C(649) million as against RS. 4,130 million in FY 2022.

The Board has proposed a dividend of 500% per equity share of 1 face value for the year.

The Company has several growth levers across its various businesses, which shall drive sustainable growth for the company and its stakeholders.

In Radiopharma business, we have a strong pipeline of products, with addressable market of over US$1 billion, which we will launch during FY 2024 - FY 2027. We are focused on maintaining leadership position in stable high margin core portfolio in North America, e.g., lung functional imaging and thyroid targeted radiotherapeutics and launch of new products. In the distribution business we are laying emphasis on accelerating sales of high growth new products, e.g., Ga-PSMA and other SPECT products and to explore expansion of presence into the PET space.

In the Allergy Immunotherapy business, we are targeting growth through further penetration in the US market and expansion of presence in the non-US markets.

In the CDMO Sterile Injectables business, we are making investments of US$370 million to double the capacity over next 5+ years in a phased manner. These investments are funded through a mix of internal accruals, Cooperative agreement with US Government for US$149.6 million and concessional loan from Canadian Government for ~US$48 million. Our focus is to ensure on-time and at-cost execution of these capexes.

In Generics business, we have undertaken a large scale business transformation focused on Strategic re-organisation of the Generics business, cost optimisations and re-prioritising geography-mix to accelerate growth in branded markets in India and in select International markets.

In Drug Discovery Services business, we are expanding capacities and are focused on leveraging our state of the art facilities and differentiated technical know-how, e.g., Integrated Drug Discovery, DMPK to drive new customer acquisitions.

In the CDMO API business, we are focused on driving higher capacity utilisation including through launch of new products and by acquiring new customers globally.

In Proprietary Novel Drugs business we have several high potential programs, which are at the preclinical / clinical stage. In this business, our emphasis is on cost optimised operating model with a focus on value creation.

We continue to stay focused on our strategy of being closer to the customer and of further strengthening our leadership position in defined businesses.

We would like to thank all our valued stakeholders, including our customers, vendors, lenders and shareholders for continuing their support and upholding their confidence and trust in us. We remain deeply grateful to all our employees globally for their contribution and commitment to the Company.