Delivering excellence in healthcare
The COVID-19 pandemic has rendered a severe blow to societies economies and thehealthcare industry. For us at Laurus Labs the situation has been challenging. Howeverwe remain unbowed and unshaken and are confident of continuing on our high-growth path.
Building on our strong foundation
We leveraged our strong backward integration and demonstrated commendable executioncapability in the formulation segment growing 165x from Rs5 crore to Rs825 crore from2018-19 to 2020-21. The majority growth came from tender-driven opportunities viaparticipation in global fund PEPFAR and various in-country African tenders. To scale upthis segment and cater to new players we plan to double the capacity to 10 billion unitsper annum over the next 18 months. Growth in APIs has been strong with the launch offirst-line products. Other APIs (anti-diabetic CNS and PPI) are expected to be key growthdrivers due to a robust orderbook and large capacity addition by the end of next year.With a dedicated R&D centre and manufacturing units we are well positioned to meetthe rising demand for NCE drug substances and drug products. We are in the process ofsetting up a dedicated R&D centre and greenfield manufacturing capacity for LaurusSynthesis Private Limited to support future growth.
Financial performance and shareholder returns
We performed well in 2020-21 with good revenue growth and an improvement in the coreprofitability. Our consolidated revenues stood at Rs4814 crore as against Rs2832 crorein 2019-20. Our EBITDA grew by 176% to Rs1573 crore vis--vis Rs570 crore in theprevious year. Our PAT grew by 286% to Rs984 crore against Rs255 crore in 2019-20. Duringthe year we acquired a 72.55% stake in Richcore Lifesciences from two private equityfunds Eight Roads and Ventureast. The acquisition is aimed at diversifying and enteringhigh-growth areas of recombinant animal origin free products enzymes as well as buildingbiologics to CDMO at scale. The company has been renamed as Laurus Bio Private Limited andthe current promoters will continue to be on the executive board and run the day-to-daymanagement of the Company. We are on course of commissioning large scale fermentationcapability. We are also planning to acquire additional land for further expansion bycreating close to million litres fermentation capacity. All the four businesses have arobust growth outlook driven by improving demand and supported by capacity expansion planslined up. We are enhancing our current portfolio stepping up R&D activity andstrengthening and expanding manufacturing capabilities. The synthesis business is expectedto stage a strong growth over the next
2 years with sustained new client additions. Laurus Bio is also expected to growsubstantially over the next 4-5 years and would make us a fully integrated player in thepharmaceutical and biotechnology space.
Investing in growth
We are seeing improved footing in our formulation segment apart from the tenderingbusiness and are expanding capacities to meet the demand. Our brownfield expansionproject for the formulation segment will be operational in a phased manner from August2021 and will be fully operational by the end of 2021-22. We are also planning to add ablock for High Potency API (HPAPI) to support growth in the Synthesis segment which isdriven by new client additions and increasing commercialisation of products.
Environmental social and governance (ESG) objectives
The Board is committed to the promotion of strong ethical environmental and corporatesocial responsibility principles. We are focused on playing our part in addressing therisk of climate change and the protection of the environment and we are engaging with ourstakeholders to ensure they also put sustainability first. We report accurately toshareholders and follow relevant laws and regulations in the jurisdictions where weoperate. Through increased transparency and disclosures as well as efficient operationswe have been able to garner and maintain this trust.
We ensure that all effluents are treated properly before being released into theenvironment. Our operational efficiency allows us to use resources conservatively andreduce waste. We also track our energy and water use closely and are working towardscutting down on both over a period of time. Our governance and risk processes are gearedup to keep us informed and prepared for the risks that we face.
Quality and reliability
A founding principle of Laurus Labs is the importance we place on quality andreliability. Our customers trust us to deliver high-quality and affordable medicines whenthey need them. In recent years we have invested significantly to ensure we maintain thisquality and reliability as we grow. We responded quickly at the outset of the pandemicadapting our ways of working to adopt social distancing at our facilities.
Laurus' emphasis on automation and quality control has ensured a good compliance trackrecord. Across all our manufacturing sites we have put in place quality systems thatcover all areas of business processes from supply chain to product delivery to ensureconsistent quality efficiency and safety of products.
Communities and our responsibility to give back
Fulfilling our purpose of putting better health within reach every day is not onlyabout providing medicines. We have a strong legacy of supporting the communities in whichwe live and work and in 2020-21 these efforts were particularly important.
Towards a hopeful future
Before I conclude I would like to extend my gratitude to the amazing people at LaurusLabs who are passionate about what they do. They ensured a steady supply of vitalmedicines for patients across our markets during these tough times. It is their commitmentthat helped us sail through and instils in us an unwavering confidence of success in theupcoming years. I would also like to thank our customers and shareholders for theconfidence they have placed in us. As I write this letter the world is still in the gripsof the pandemic; yet we have reasons to be hopeful. The pandemic has shown us thepossibilities we can create when human resilience and medical innovation come together.Laurus Labs will continue to deliver on its promise of offering high-quality andaffordable healthcare for millions around the world. We are well-positioned in anattractive robustly growing industry where we have leadership scale and diversificationacross products geographies and markets. Along with the right team and strategy we areconfident of delivering long-term sustainable growth for all our stakeholders.
|Dr. Satyanarayana Chava |
|Chief Executive Officer |