For us at Zota the next act in our growth story will not simply continue. It's a newand exciting stage in our adventure. It is the motivational milestone that inspires us tobe more focused and coherent in providing solutions to the needs of patients. Led by thesolid belief in the power to redesign the future we know that the route ahead demands usto step up and intensify our efforts. That's why we invest consistently in our ability toboost growth in the future. Our focus on powering growth remains unchanged and to getthere we are deploying multiple levers the most important being a thrust on building ourgeneric retail pharmacy chain. This thrust on the retail chain is based on solidfundamentals excellent growth prospects and a huge opportunity size. Aggressive measuresare being taken to ensure we realise the goals that we have set for ourselves. Werecognise that the decisions we make today not only lay the groundwork for long-termbusiness success but also pave the way for current and future generations to live betterlives. We're still focused on planning ahead and anticipating tomorrow's requirementstoday.
We continue to move forward towards that land of opportunities well equipped andprepared as we consider the vast opportunity landscape that beckons us with all of itspromises and challenges.
Zota Health Care Limited
Zota Health Care Limited is a renowned pharmaceutical company that manufacturesmarkets and exports pharmaceutical ayurvedic nutraceutical and over-the-counter (OTC)products. Through its chain Davaindia the largest private-sector generic pharmacy chainthe Company is making strong inroads into the generic retail pharmacy business.
Zota situated in Surat Gujarat was founded in 2000 with a passionate desire toprovide affordable healthcare to all. Zota meets the requirements of millions of people byincreasing access to high-quality inexpensive medicines for chronic illnesses includingheart disease diabetes thyroid disease and others giving India's pharmaceuticalindustry a boost. The Company is known for producing high-quality generic pharmaceuticalsat an affordable price. The Company's state-of-the-art manufacturing facility at SachinSEZ serves customers in more than 30 nations.
Zota has been a front runner in generic retail pharmacy which it believes will be acritical enabler of affordable access to medicines keeping itself aligned with the needsof 1.3 billion Indians. We stand by our philosophy of providing affordable healthcare tothe masses by keeping customers at the centre of our operations. Our passion for making adifference in the world's healthcare needs has enabled us to touch the lives of millions.We remain committed to making a positive impact on people's lives around the world in thecoming years.
LETTER TO SHAREHOLDERS
A new way forward
Dear Shareholders It is a pleasure to address you all and present you the Company'sAnnual Report for the year 2020-21. All of us at Zota sincerely hope that each one of youis safe and in good health in these trying times. Unfortunately the spectre of thisdeadly pandemic has been looming over all of us since the beginning of 2020 and theresulting loss of human life from it has been indescribable.
In such difficult times what is pertinent to note is the contributions of our doctorsscientists paramedics and healthcare works - our Covid warriors. The medical communitythe social sector and the government authorities worked relentlessly to revive the brokenmorale of the people; with active vaccination drives across the Country we are hopefulthat this atrocity will soon come to an end.
OUR FY21 PERFORMANCE
Even in one of the most challenging external environments your Company has deliveredresilient operational and financial performance. Let's begin with a review of ouroperational performance first. For the year under review our Marketing business verticalwitnessed a decline and this was primarily due to Covid-19 related disruptions early inFY21. Even though pharmaceuticals fall under the essential sector category during the H1of FY21 the Company witnessed depressed sales of prescription-drugs and OTC products. Thesame has performed better in the second half of FY21.
Davaindia continues to scale its operations and retain its #1 position as the Country'slargest private-sector generic pharmacy chain with 591 stores.
As far as our driving businesses are concerned we witnessed a year of excellentperformance more than enough to offset the degrowth of our traditional marketing businessand deliver a topline growth of 12.3% over the previous year. Exports registered anincrease of 53.2% with new dossier registrations contributing to operations. The Companystill has a significant number of product registrations in the pipeline and coupled withthe ongoing investments in this business vertical; the Company expects to continue on itsgrowth trajectory.
Davaindia continues to scale its operations and retain its #1 position as the Country'slargest private-sector generic pharmacy chain with 591 stores. The Company added 339Davaindia stores in the year under review serving more than 14.5 lakh customers withquality generic medicines and other products. The Company has also introduced a new formatof COCO stores which are registering good responses from consumers. To add to thisDavaindia witnessed a steady climb in footfall and average wallet spend over the yearessentially doubling the sales of this business vertical. Average wallet spend stood atJ204 in Q4FY21 compared to J159 in the corresponding quarter in the previous year asubstantial increase of 28%. The Company also added close to 100 SKU's in the year underreview strengthening the product portfolio further. As we advance the Company will focuson growing in each of these aspects i.e. store roll-out average wallet spends and thenumber of customers served.
On the financial front the Company witnessed an increase in Revenue from Operations tothe tune of 12.3% which stood at J106.79 crores in FY21. On the other hand the Companyregistered higher operating expenses due to its aggressive growth strategy for Davaindiaoperations; as a result Operating Profit Margin stood at 0.6% in FY21 compared to 4.7% inFY20. Subsequently Profit after Tax stood at -0.21 crore compared to 2.74 in FY20 adecline of 107.7%. As far as the sales mix is concerned the traditional Marketingbusiness contributed 49% to the sales compared to 66% in FY20. On the other hand thecontributions of driving business verticals contributed 51% in FY21 - the highest ever inits history.
AFFORDABLE MEDICINES FOR ALL
We have always spoken about Zota's belief of advancing the cause of accessibility andaffordability of healthcare and medicinal products in the country. Millions of Indians aredriven to poverty each year due to a lack of affordable healthcare; this issue may beresolved with an expanded supply of generic quality drugs at costs much below their brandcounterparts. Consumers need to be made aware of the equivalence between brand and genericpharmaceutical drugs and of the misconceptions surrounding generic medicinal products. Ourjourney on this path started a few years ago when we began the Davaindia concept whichhas now grow with over 600 shops since March 2021 covering most Indian countries today.
AS WE ADVANCE
Going forward the Company will pursue its strategies for achieving accelerated growthin its Exports and Davaindia business vertical while Marketing business will remainstatus quo. In the short term the Company will be placing greater emphasis on scalingDavaindia to a national level and increasing its footprint strengthening productportfolio leveraging technology to scale the operations. At the same time increasedefforts and investments in product registrations will help scale Exports business. Ourcontinuous focus on new-age businesses will transform Zota Health Care into a newerbetter version of itself.
Before concluding I would like to thank all our employees Board Membersshareholders regulatory authorities and bankers. I wish you all great health and safetyas this pandemic wanes. I am grateful for your continued support and faith in us andresolve to remain focused on the mission of creating maximum value for all ourstakeholders.
C H A I R M A N