Crafting a strategic way forward
"Our investment and acquisitions are strategic in nature and theyhave added value not just in terms of improving revenues and profitability but also actedas stepping stones t for foraying into new regions n therapeutic areas or dosage forms.
It gives me great pleasure to report the fact that we saw another yearof impressive growth. Financial year 2018-19 saw us accomplish higher sales across all ourbusiness segments and geographies. Essentially we were able to reap the fruits ofinvestments we made in our products markets and processes and we will continue tostrengthen our capabilities to cater to the requirements of patients globally.
The upswing in global economic activity that began in the last quarterof 2016 continued to persist until the middle of 2018 resulting in the highest degree ofsynchronised global expansion during the post-crisis period. However the momentum soonbegan to lose its steam amid broad-based moderation in activity across developed andemerging economies.
Economic growth remained tepid in key economies such as the EurozoneJapan and China. As a result global economic growth slowed from 3.8% in 2017 to 3.6% in2018. The outlier was the US economy that expanded at 2.9% in 2018 vis-a-vis 2.3% in theprevious year.
Notwithstanding global headwinds India continued to be in the esteemedclub of the world's fastest growing economies although the growth trajectory declinedfrom 7.2% in 2017-18 to 6.8% in 2018-19. While the slowdown in various economies delayedinvestment decisions the pharmaceutical industry itself grappled with multiplechallenges.
I am happy to share that despite increased competition we maintainedsustained growth over the last few years across businesses regions and segments. For2018-19 our consolidated revenues increased by 18.6% to C195636 million following stronggrowth across all key regions including the US Europe and other Growth Markets.
Our EBIDTA before forex and other income grew by 4.3% to C39519million while the EBITDA margin stood at 20.2%. Our net profit for the year amounted toC23647 million leading to an EPS of C40.36.
We have grown ahead of the sector over the last few years and areconfident that with the capacities that we have added organically and inorganically wewill continue to sustain this momentum going forward.
Our confidence emanates from the fact that we have always taken along-term view of the sector while making our acquisitions and investments. While most ofour acquisitions have strengthened our revenue and profitability from the very first yearthe idea behind acquiring them was more strategic in nature as it helped us foray into anew geography or business segment.
As a Company we were extremely judicious in terms of the value paid toacquire an asset. While we came across multiple assets that could have added value to theCompany we have always been cautious about choosing only those assets that have beenreasonably priced.
It is our ability to acquire businesses at reasonable prices and thenturn them around quickly that has helped us build a formidable presence in multipleinternational markets.
The industry is seen growing at 3-6% over the next five years to reachUS$ 1.5 trillion by 2023. Within the industry specific areas such as specialty medicinesand biosimilars are seen growing at a faster pace.
Aware of the dynamic operating landscape we have already invested indeveloping our expertise in multiple areas including large molecules. We have been workingon attaining the required capabilities and building the relevant infrastructure to forayinto areas where we foresee substantial growth.
As one of the leading global pharmaceutical companies it isincreasingly important for us to upgrade our manufacturing and compliance systems. Overthe years we have continuously invested in improving processes and systems to create keydifferentiators that set us apart and also allows us to stay ahead of the curve in termsof manufacturing practices and compliance.
We are excited about the opportunities that lie ahead of us and ourresearch & development efforts across multiple new products and therapeutic areasalong with the newly added capacities have helped us build a strong foundation; and we areready to LEAP ahead.
We work with people from diverse nationalities and cultures which helpus in being the most valued partner to the global pharma fraternity. It also testifies tothe fact that we are driven by meritocracy and have been able to provide our people withan enabling environment that promotes professionalism.
As a leading industry player we are aware that our initiatives have afar-reaching impact on multiple stakeholders communities and the environment. Recognisingthis responsibility we are adopting industryleading sustainable practices and ensuringthat we remain at the forefront of initiatives such as dealing with the challenge ofAnti-Microbial Resistance (AMR).
Whether in making business decisions or participating in initiativesthat impact the environment and the community we have always been thought leaders andfollowed our thoughts with fast-paced execution.
Before closing I must share that our culture and mindset will help usLEAP ahead to the next growth level. I thank all the stakeholders for their continuedtrust and support.
K. Nithyananda Reddy