Letter to Shareholder
We hope and wish that all of you have been safe and healthy during this unprecedentedchallenge faced by the humanity. The uncertainty around the course of the COVID-19pandemic started in March leading to governments across the world initiating lockdowns.This partly affected our business and operations in the last month of FY2020. As thedisruption got into FY 2021 its major impact on global economics will be seen in thequarters ahead. We need to accept the new normal for working be it in the corporateoffice factories R&D laboratories or on the field for doctors' meetings.
Though demand disruption is least for pharmaceuticals in comparison to otherindustries operational challenges are still huge. We also require strong response oncosts to preserve cash to manage volatility in the external environment. But our strongbalance sheet provides us the confidence that we will once again emerge resilient.
Last financial year was truly the demonstration of our resilient business model. Whiledefying challenges we also continued to achieve the growth in almost all our geographies.
This resilience in our business model was built over last 2 decades where we investedin different markets and geographies in a sustained manner to de-risk the business. FY2020 saw the US generic business contributing meaningfully to your Company's performance.
We continued our focus on building strong brands across the markets. Our consistentefforts to provide differentiated products along with seamless execution allow us todelight our customers which in turn generates superior quality business for us. This yearwas no exception as it reconfirmed our capability to take the challenges in the stride andachieve growth on consistent basis - displaying the inherent resilience of theorganisation.
The year also saw conclusion of major capex-cycle spread over the last 6 years whichsaw your Company investing about Rs.1600 cr. including investments in three greenfieldmanufacturing facilities (Dahej Guwahati and Pithampur) and expansion of R&D centre.This capital was allocated to ensure we continue to be ready for satisfying upcomingopportunities while maintaining highest quality standards. Most importantly it wasfunded entirely from internal accruals. With all these facilities commencing operationswe expect easing of pressure on our operating free cash flow in coming years.
Branded Generic business which constitute almost 70% of our revenue is strongly builton providing solutions to the patients for their unmet medical needs through R&D andachieve consistent growth. For the year it performed well with a growth of 17% and goingforward should achieve a growth in the range of low teens.
Indian Pharmaceutical Market (IPM) saw a volatile movement month over month duringFY2020. However our branded generic business in India grew 13% against industry growth of11% as per IQVIA MAT March 2020.
Yogesh M. Agrawal