It is an absolute pleasure to be sharing my thoughts with you at a time
when the Company's fortunes turned around - from a negative bottom line of B73.14 Crore in
FY21 to the positive zone with a Net Profit of Rs 25.32 Crore in FY22. The swing of nearly
B100 Crore was owing to a combination of two factors - a 9% increase in the topline and
numerous small yet meaningful initiatives that pruned costs to sales by about 6%.
What make this turnaround special is that it has come at a time when
the Company successfully completes 25 years of its exciting business journey. I take this
opportunity to express my wholehearted gratitude to the entire team who have been with
Nectar along this journey. The contribution of every individual along the way, has helped
in uplifting the Company to a global position of respect and recognition.
Having come this far, the lingering question is how we would sustain
this momentum going forward-a pertinent thought, especially after four years of subdued
performance. I remain pragmatic about the future as I can see green shoots of opportunity
over the horizon.
The Covid-19 pandemic, while brutally impacting lives, has made
one-and-all extremely health-conscious. As such, the consumption of medicine, protective
and curative, has seen a considerable jump in recent times. This trend will continue for
some time until we get back to our undisciplined days, yet again. It augurs well for the
entire pharmaceutical sector.
Coming to our therapy that is anti-infective, the future appears
inspiring. Credible estimates suggest that the global anti-infective drugs market is
expected to increase from US$116.4 billion in 2021 to US$158.29 billion in 2025 at a CAGR
of 8%1. Moreover, the consumption of high-end cephalosporin both orals and
injectable, are fast substituting low-end antibiotics owing to two reasons: 1) their
narrow spectrum of activity and 2) the tendency of developing anti-microbial resistance
(AMR), which is emerging as a huge issue across the globe in recent times.
While demand is set to increase, supply could be constrained. The
anti-infective space is a low-margin and highly cluttered space. Large global pharma
players and generic companies in the West are consolidating their operations in this space
and re-allocating their energy and expertise to a more remunerative therapeutic space. The
combination of mature growth opportunities and declining supplies augurs well for
fully-integrated players like Nectar.
We endeavour to fill in the void in API availability by direct supplies
to global generic majors or by partnering with them on a contractual basis for the
medium-term. We have had some conversations exploring both options. We are confident that
they will open interesting opportunities, particularly in the medium- to long-term.
What also works in our favour is the established reality that
Cephalosporins do not result in AMR. To prove and measure this, we have an excellent and
proven Standard Operating Procedure to establish that no incidents of AMR ever occur
through air, water or soil.
The consumption of high-end cephalosporin both orals and injectable,
are fast substituting low-end antibiotics owing to two reasons: 1) their narrow spectrum
of activity and 2) the tendency of developing anti-microbial resistance (AMR),
Currently, growing awareness and increasing consumption of
cephalosporin API and Formulation are expected to drive demand by about 12% CAGR in ROW
markets and by 5-6% in highly regulated markets. The EU appears to be the most exciting
prospect for us in the next 5 years. This market should shore our business volumes and
make a healthy contribution to profitability. We expect to receive approvals for some of
our filings in regulated markets for APIs and Formulations in the near term. That
achievement would take the Company into a new orbit.
With the worst behind us, we are excited for the riveting journey
ahead.
I take the opportunity to thank the entire team for their unique
passion and dedication to our clients and our business. I express my sincere gratitude to
fellow Directors for their commitment and professionalism in paving Nectar's long-term
path. My thanks to our other stakeholders, who continue to be our partners in growth. I
also place on record my deep appreciation to all our loyal and valuable shareholders for
their continued confidence and support.
It's your confidence that has brought us this far, it is this fuel that
will accelerate us into a new orbit.
| Regards |
| Sanjiv Goyal |
| Chairman |