It is that time of the year which I look forward to because it gives mean opportunity to draw myself out of the business bustle to pause and ponder about whatwas what is and what will be.
Fiscal 2019-20 was not just any year. It was a surreal experience. Forit was a real turnaround in our operations. And it is with great pride I must mentionthat we have reversed the trend for the better. There were a lot of things to cheer about on the shopfloor and in the market place.
We continued to work passionately on improving shopfloor efficiencies.We successfully improved the productivity of our key molecules which allows us tostrengthen our competitive edge in an otherwise intensely cluttered business space.
Towards the tail-end of the fiscal under review our Derabassi unitsuccessfully cleared the US-FDA audit without any 483 observation for the sixthconsecutive time. This is extremely satisfying for it is a global watermark on our qualitystandards which have been sustained over the years. This unit is important for the Companyas it manufactures APIs that are supplied to over 70 countries across the globe coveringmore than 280 customers including all the major global drug manufacturers. This stamp ofapproval only reinforces their trust in our capabilities.
In the market place there were important breakthroughs which holdconsiderable promise of strengthening our growth momentum over the coming years.
One we strengthened CRAMS portfolio with commercial supplies ofmultiple new products to a reputed US organization. As a result our CRAMS verticalregistered a healthy growth over the previous year and made a significant contribution tobusiness profitability.
Two our supplies of key molecules to highly stringent markets of Japanand Korea increased considerably. Our sales volume for Nitazoxanide upped at a healthypace. Also we supplied bio-batches of Lisdexamfetamine.
The bottom line is that our EBITDA stood at C175 crore in 2019-20against C157 crore in 2018-19; we registered an EBITDA margin of 23% which I believe isvery commendable.
This brings me to the all-important question
How do we make thebig leap from here? What will make us leapfrog our EBITDA past the C200 crore mark in thecurrent year?
The blue print is in place for the big leap in the current year itself.What is heartening is that the resurgence has already begun.
We commercially launched Fexofenadine an AntiHistamine Drug in the USmarket. We tied up with a reputed generic player in the US (they had filed their ANDAusing our DMF) and have received commercial orders for this product. Further I amconfident that our CRAMS vertical based on our growing respect among and strengtheningrelations with pharmaceutical companies in the US will sustain its growth momentum.
Our strategy blueprint also includes growing our presence in selectregulated and highly quality-conscious markets (like Japan and Korea) through increasedtraction for our existing products and launch of new products. In addition havingsupplied the bio-equivalence batches for Lisdexamfetamine we will work towardscommercialising this molecule globally. These efforts should ably support our growthaspiration for the current year.
From a business operation perspective we continue to ideate andimplement productivity enhancing initiatives which should shore our Return onResources' utilised.
Most importantly we are working closely with our lenders and bankers onidentifying way to reduce our interest cost. We believe that when this happens our profitswill climb into a new orbit.
The results are already showing a positive traction. In the firstquarter of FY21 our revenue from operations was about C210 crore while our Net Profit wasa shade higher than C4 crore. I am pleased that our strategies and efforts have worked andwe are back to winning ways.
What will be...
The next thought playing in the mind is
how do we sustain thegrowth over the medium term? In the pharmaceutical world growth will come by generatingmore volumes in existing products entering new markets and adding new products. And weare doing all of them.
We will be launching Atorvastatin in the US in FY22. Also a couple ofproducts are being actively reviewed by regulatory agencies. We are progressing well withour plans for executing manufacturing and supply agreements with North American genericpharmaceutical companies.
In China we are aggressively working to capitalise on our first moveradvantage. We have registered over 7 products. We are supplying Fexofenadine in commercialquantities and have tied up with end customers for three more products.
From a volume perspective we will sharpen our focus on growing volumesof Fexofenadine and Ezetimibe.
We also have a basket of 4-5 products which include Pazopanib (tyrosineKinase Inhibitor) & Saxagliptin (anti-diabetic). Some of these products are atadvanced stages in the mind-to-market cycle. These are complex molecules addressinglow-volume high-value opportunities that will enhance our business profitability.
This I believe will accelerate our progress and profitability. Overnext 4 years I expect to double our revenue with a corresponding increase in our EBITDA.Our progress will allow us to reward our valued shareholders for their trust reposed inthe Board and the leadership team in our tough times.
As a team we will persistently explore ways to improve our prospectsover the coming years. We will continue to implement revenue-enhancing andefficiency-improving measures to capitalise on favourable prospects in the markets of ourpresence.
My personal focus will be on enhancing the quality of business. Thismeans all aspects of our business should be of high quality whether it is related toproduct process service or any interaction with stakeholders.
I would like to thank the Board for guiding me to execute myresponsibilities in the best possible manner. I would like to extend my gratitude to ourteam for their relentless efforts in holding the Company together in these trying times. Iwould also like to thank all our stakeholders bankers and government authorities fortheir support and assistance throughout our journey. I solicit your continued cooperation.
N R Munjal
Chairman & Managing Director