Celebrating Legacy, Shaping Tomorrow
The global pharmaceutical industry witnessed a notable surge in
spending in 2023, indicating a positive trajectory for medicine expenditure through 2028,
fueled by strong growth in emerging markets.
Samir Mehta
Executive Chairman
Dear Stakeholders,
It gives me immense pleasure to present that Torrent Pharma made
significant progress on multiple fronts during the fiscal year 2023-24. This year holds
special significance as we commemorate the 100th birth anniversary of our
visionary founder, Shri Uttambhai Nathalal Mehta. His journey from a medical
representative to building a leading global pharmaceutical company continues to inspire
us. His commitment to making affordable medicines and pioneering indigenous production
remains the cornerstone of our values and mission.
As we move ahead, we are taking the legacy of the last five decades of
journey to further strengthen the Company's position in the market and drive sustainable
growth while creating value for stakeholders.
Economic Context and Industry Overview
The global economy has demonstrated resilience despite significant
challenges, including supply-chain disruptions following the pandemic and a crisis
triggered by the Russian-Ukraine conflict, leading to spikes in energy and food prices and
substantial inflation. However, contrary to expectations, these events did not push the
world into recession. The banking system remained robust, and major emerging markets
avoided severe economic halts. Global growth hit a low of 2.3% in late 2022, coinciding
with a peak in inflation at 9.4%. Looking ahead, growth is expected to stabilise around
3.2% for 2024 and 2025. Overall, indicators suggest a favourable economic trajectory with
signs of a controlled adjustment.
The Indian economy displayed robust growth in FY24, with an estimated
GDP growth of 7.8%, driven by strong private consumption and government capital
expenditure. Sectors like construction and manufacturing played pivotal role, with
double-digit growth rates. Despite inflation concerns, which moderated to 5.1% by February
2024, the Reserve Bank of India maintained a cautious stance for price stability. Looking
ahead, India's economic outlook remains promising, with a projected growth rate of 6.8%
for FY25, driven by private consumption and infrastructure investment.
The global pharmaceutical industry witnessed a notable surge in
spending in 2023, indicating a positive trajectory for medicine expenditure through 2028,
fuelled by strong growth in emerging markets.
Overall, the industry is poised for sustained growth and innovation,
driven by emerging markets and therapeutic advancements, despite facing challenges. The
Indian pharmaceutical industry, known for its quality and affordability, is poised for
strong growth. Factors such as a growing population, demographic shifts, and government
incentives like the PLI scheme are driving this growth. India's expertise in low-cost
manufacturing ensures competitive pricing, while rising incomes and improved healthcare
infrastructure enhance affordability and access to modern medicines nationwide.
Delivering Robust Performance
In 2023–24, we continued our growth momentum with a year-on-year
healthy revenue growth of 12% and Operating EBITDA growth of 19%. Our operating
profitability witnessed a notable improvement of approximately 5% over the past 5 years
driven by enhanced operational efficiencies, strategic investments and strong market
performance in branded markets.
I am pleased to share that our Bileshwarpura facility received
regulatory clearance from the USFDA and commenced commercial operations. We successfully
launched our first oncology product from this facility, marking a significant milestone in
our expansion efforts and commitment to delivering innovative therapies. During the year,
the USFDA also cleared our Dahej Facility which paves way for the new product approvals in
the US market.
Our Indian business continued to deliver strong performance,
contributing approximately 53% of our revenues, supported by strong performance of top
brands, new launch momentum, market share gains in our focus therapies and strong growth
in Curatio acquired portfolio. The company also entered into strategic alliance with Zydus
Lifesciences Ltd which will strengthen our gastroenterology portfolio while addressing the
growing patients' needs in NASH and NAFLD. Going forward, we expect India business to
continue outperforming the market growth. We remain committed to expanding market share in
all our focus therapies, improve field force productivity in the expanded areas,
prioritising new product launches, and continue building the consumer health business.
In Brazil, Torrent Pharma has established itself as a leading player,
navigating through patent law changes and market fluctuations with resilience. However,
our commitment to growth is further exemplified by our strategic initiatives. Firstly, we
have accelerated new product launches in both branded (BGx) and generic (Gx) segments.
Secondly, we are focused on expanding our portfolio in CNS, Diabetes, Cardiovascular and
adding two new therapeutic segment in the coming years. In ROW markets, we continue to
remain focused on brand building, expansion of existing and new therapeutic areas. In
Germany, amidst shifting market dynamics and rising competition, our efforts are directed
towards improving cost competitiveness and refining tender bidding strategies in the
generics market, particularly for high volume and niche products, which have yielded
positive results. We are also placing increased emphasis on over-the-counter (OTC) and
specialty channels such as hospitals, which show promising growth prospects. Moving
forward, we intend to maintain our market position by persisting with cost optimisation
initiatives, expanding our product range, and solidifying our presence in critical market
segments In the US, new product approvals are expected to give a positive momentum to the
overall performance. At the year-end, 34 ANDAs were pending approval with the USFDA.
We continue to prioritise key countries such as Mexico and the
Philippines as growth engines among second-tier markets, alongside other markets to
strengthen our global footprint and capitalise on new opportunities for expansion.
Going Beyond Business
At Torrent Pharma, we are dedicated to sustainability and responsible
practices. We have set ambitious targets to reduce our greenhouse gas emissions and are
actively exploring innovative methods to minimise our environmental impact. By
diversifying our energy mix with cleaner fuels and renewable sources and investing in
projects like the Hybrid Solar-Wind initiative, we aim to significantly reduce our carbon
footprint.
In addition to managing energy and emissions, we prioritise water
conservation through initiatives such as rainwater harvesting and responsible freshwater
consumption. Our goal is to achieve 100% non-hazardous recycling and zero waste at
landfill sites, reflecting our commitment to environmental stewardship.
As part of our corporate social responsibility philosophy, we strive to
positively impact communities in three key areas: Community Healthcare, Sanitation and
Hygiene, Education and Knowledge Enhancement and Social Care and Concern. Through our
initiatives in the areas of healthcare like preventive healthcare programmes, enhancing
women health & hygiene and providing access to as specialist medical services through
proactive interventions, including awareness campaigns and educational support, we aim to
improve lives and promote well-being of the Community.
Outlook
Looking ahead, we aim to consolidate and strengthen our market position
in the branded generic markets, focus on improving field force productivity in the
expanded areas, and further grow our consumer health business portfolio by strengthening
our distribution channels and launching national media campaigns to bolster brand
awareness and market presence. For generic markets, our focus will be to continue
achieving cost competitiveness and strengthen the R&D pipeline through incremental
filing and launches. Incremental cash generation shall be allocated toward further
de-leveraging of balance sheet. Furthermore, we made significant progress on our ESG
targets and will continue reducing our carbon footprint and environmental impact through
various initiatives.
We express our gratitude to our employees and stakeholders for their
trust and support, and we are committed to fostering these relationships to create
enduring value and drive sustainable growth. Regards,
SAMIR MEHTA
Executive Chairman