Dear Shareholders,
It gives me immense pleasure to present our annual report for the fiscal year 2023-24.
As an innovation-led lifesciences company we continue to make strides in bridging unmet
healthcare needs of patients globally.
Leap for Life inspires us
During the year gone by, we continued to align our strategies and explore ways by which
we could leverage our legacy in science, health and innovation to enable the Leap for
Life. This is at the heart of all that we do from unlocking new possibilities through
innovation to adopting newer technologies and sustainable practices, prioritising
execution excellence, providing solutions optimised for access and delivery, collaborating
to expand reach, bringing in inclusiveness and creating meaningful impact in the
communities around us. At every step, the Leap for Life is about putting patients and
people first.
Leap for Growth
As we reflect upon our business performance in 2023- 24,1 would like to begin by
expressing my appreciation to the entire team for achieving the highest ever operating
profit and margins. It has been a year of all-round growth, both financially and with
respect to the value generated for patients, customers and shareholders. Overall, we
delivered a healthy double-digit growth alongwith improved profitability.
All our business verticals contributed significantly to the Company's growth journey.
Across various geographies, we continued to support the medical fraternity with quality
healthcare solutions and a global portfolio of more than 5,000 products.
Our branded formulations business in India outpaced the market to register double-digit
growth aided by healthy volume growth and new product launches. In the US, we recorded an
important milestone of scaling US$ 1 billion for the first time. Importantly, the base
business achieved sequential growth every quarter through the year on the back of volume
expansion and new product introductions. International markets business, which comprises
Emerging markets and Europe, also delivered double digit growth with all key markets
contributing to growth.
We have been consistent in our overall mission to empower patients. When we speak of
patient-centricity, enabling access and making drugs affordable to a large patient
population, is in line with this mission. During the year, we out licensed two of our key
innovations Saroglitazar Mg and Desidustat to Large pharma peers in India to co-market and
thereby enable wider access and affordable reach to expand the pool of patients
benefitting from the novel solutions. When we speak of the Leap for Life, bridging the
gaps and making Lifesaving therapies within reach of patients who are in dire need of them
is paramount. Over the last decade, we were able to make a positive impact in the lives of
more than 1 million cancer patients in India through our focus on access and
affordability. We are now the largest Indian oncology player in the domestic market.
Innovation that enables the Leap for Life
Innovation is the very edifice on which our organisation is founded and what
differentiates us. By investing continuously in R&D, we have been able to create a
pipeline of products that comprise both best-in-class and potential first-to-the-market
products that can bridge unmet healthcare needs. Our researchers have worked tirelessly to
achieve medical breakthroughs in liver diseases, kidney diseases, cancer, cardio-metabolic
and infectious diseases. We have embraced innovation with new modalities and technologies
to improve the lives of patients through pathbreaking discoveries.
Our two decades of intense research on PPAR mechanism led to the successful development
of Saroglitazar Mg which has helped several patients in India living with the chronic
liver condition, Metabolic dysfunction-Associated Steato Hepatitis (MASH), manage their
disease. Saroglitazar Mg has received orphan drug designation from the U5FDA and EMA and
is currently under Phase 2/3 clinical trials studied for the US market for Primary Biliary
Cholangitis (PBC) indication. Our research in the HIF-PH inhibitors Led to the discovery
and development of Desidustat which is the first approval in India for the treatment of
the chronic kidney disease induced anaemia. We have set out the path to offer medicines
for the most serious and challenging diseases including rare and orphan diseases like
Molybdenum Cofactor Deficiency (MOCD) Type A, Menkes Disease and Progeria. With our
pioneering research programmes, we are developing potential drugs for treating infectious
diseases as well as rare diseases including Amyotrophic Lateral Sclerosis (ALS) and
Cryopyrin Associated Periodic Syndrome (CAPS). Enabling innovation at Zydus through
several biosimilars, antibody-drug conjugates, and vaccines have also helped improve the
quality of life of patients.
Leap ahead with new technologies
In pursuit of manufacturing excellence, Zydus is adopting new technologies for enhanced
quality and better throughput. For critical formulations, we have successfully taken
trials on the continuous blender and continuous coater in one of our plants. To enhance
the speed and accuracy in operations, we have secured regulatory approvals for real time
testing of blend
uniformity by Near-infrared (NIR). We are also exploring NIR for blend assay and
granules Loss on Drying (LOD) which could eliminate the inaccuracies of manual sampling.
As a part of our overall digitalization process, we are working on developing a platform
for real time batch monitoring using data analytics for better process controls.
Leveraging technology for enhanced productivity, we have successfully scaled up batch
sizes at a mega scale of around six tons in our state-of-the-art facility at Matoda which
has an innovative vertical flow design with integrated granulation and can cater volumes
up to 460 million pills per month in just 30 batches.
The Leap to be future ready
We are on a path to foster digital transformation throughout the organisation's
operations. Throughout the year, we made progress on this front, investigating fresh
strategies to increase efficiency and agility. Our digital transformation plan has three
components: increasing orgaisational agility for improved commercial outcomes, reinforcing
customer-centricity, and strengthening ourselves in terms of enhanced cybersecurity.
As a part of this approach, we are overhauling our IT infrastructure, which serves as
the foundation for all of our existing systems and procedures. Going forward, we will be
exploring investments in cloud infrastructure and rearchitect our applications to be cloud
ready. We are
also undertaking several initiatives to be more tech- enabled and bring more agility in
our operations, support the data-driven culture that we already have in the organisation,
bring in greater precision and productivity, improve upon the customer connect and shape
better experiences. We will continue to make headway by leveraging technology and tracking
megatrends that will shape the future and assist us in our Leap for Life.
Committed to Sustainability
I am delighted to share our progress and commitment towards Environmental, Social, and
Governance (E5G) initiatives, which are integral to our Company's mission and values. This
year we have made significant strides in reducing our carbon footprint, enhancing energy
efficiency and promoting sustainable practices across a major part of our operations. We
intend to become carbon neutral in our India operations by fiscal year 2034-35, which
contributes to more than half of our total revenues. We are also addressing the concerns
of water scarcity at our sites by achieving net water neutrality status. Committing
ourselves to environment conservation, we have made investments in renewable energy and
innovative technologies for reducing waste and conserving our resources.
We have always believed in empowering people and helping them lead healthier and
happier lives. We are fostering a diverse, inclusive and equitable workplace where every
employee feels valued and empowered. Zydus Shrishti, our C5R programme, focuses on the
areas of health, education, research and community outreach programmes. Our flagship
programme on health and education continues at Dahod, in the rural interiors of Gujarat.
Zydus Foundation which has set up the Zydus Medical College and Hospital at Dahod in
public private partnership with the Government of Gujarat, has touched the lives of 1.9
million patients since 2017, offering medical treatment free of cost. Supporting grassroot
innovation, supporting specially abled children and women through livelihood programmes
and
afforestation drive to protect the environment, all form an important part of our CSR
initiatives.
Our Board is committed to continuous improvement in governance practices, risk
management and stakeholder engagement. We have consistently improved our scores in the
ratings published by the global ESG rating agencies like S&P Global. Sustainalytics,
another global agency has also improved the Company's ESG risk exposure over the last
three years.
People who are powering our Leap
As a future focused organisation, Zydus is well- positioned to further consolidate its
position as an innovation-led company and grow into the next decade. The milestones
achieved so far would not have been possible without the committed efforts of more than
26,000 people worldwide. I want to thank each one of them for their contributions that
have helped the Company stay on the path of growth and progress.
In the years ahead, we will continue to seize new emerging opportunities, leverage new
technologies and expand outside our core areas. As we explore new dimensions in our
journey as a global lifesciences company, I remain grateful to all of you for your
unwavering trust in our Company.
Pankaj R. Patel Chairman