|From CMD's Desk :
I am glad to report yet another year of gratifying performance by your Company.
The strategic restructuring implemented in the recent past has delivered more
than satisfactory results. We have further improved on revenue streams and
streamlined operations besides optimizing resources and increasing productivity
across the organisation. This has also demonstrated the robustness of our business
model. Analysts have predicted that the Global Pharma market is expected to grow
between 5-7% for the year to approximately US $ 880 billion. During the next five
years, it is expected that the pharmaceutical industry will witness major imbalance
between new product introductions and patent expiries. The trend in the emerging
markets has however been encouraging. It is expected that the emerging markets
will continue their rapid expansion in the next four to five years. The growth
potential is on account of rising income levels and higher healthcare spend
due to increasing awareness. IMS Health has predicted that major developed
markets will grow between 4-6% through 2014 and the pharma emerging markets
will grow between 14-17% through 2014.
At Indoco, the performance of International business has been very encouraging
with a growth rate of 32% at Rs. 1565 million compared to Rs. 1188 million last year.
The formulation exports achieved a growth of 30% at Rs. 1416 million compared to
Rs. 1090 million last year. The performance of emerging markets was excellent
with a growth of 60% at Rs. 305 million from Rs. 191 million last year.
Our tie-ups with international players such as Watson Pharmaceuticals, Inc.
(3rd largest generic company in USA) and Aspen Pharmacare Limited
(a global pharmaceutical company based in South Africa) are growing stronger
and during the year, Indoco saw major extensions to their product portfolio
through these tie-ups. Indoco will further aim at strengthening its
presence in other geographies in regulated as well as emerging markets.
On the domestic business front, the formulation business achieved a growth
of 14% at Rs. 3073 million compared to Rs. 2707 million last year. We believe that
the future outlook for Indian domestic pharma business during the next decade
looks highly optimistic. The growth will mainly be driven by a growing middle class
population, increasing income levels, rapid urbanization, demand for quality
healthcare services and changing lifestyle, among other factors. We shall
also focus our attention on marketing our products in high potential territories
such as tier-III towns and rural areas, strategise product introduction in
newer segments expanding at double-digit growth rates and finally, speedup the
launch of new products in various therapies.
During the last fiscal year, the economy grew at 8.6% as against 8.8%
which was predicted by the Economic Survey Report (ESR). This fiscal
year the ESR has predicted that the Indian economy will grow by 9%. The main
concerns in the ESR report are deceleration in the industrial output,
rising inflation and oil prices which pose a threat to both the domestic
as well as the global economy. The report has mentioned that maintaining growth
with control on food inflation would be one of the main challenges going forward.
The Earnings before Interest, Depreciation, and Tax & Amortization (EBIDTA) as on
31st March 2011 is 17% of net sales. The Profit before Tax (PBT) for the year
at Rs. 566 million as against Rs. 431 million last year shows a growth of 31% and the
Profit after Tax (PAT) at Rs. 511 million as against Rs. 421 million last year shows a
growth of 21%.
I am proud to inform that our API division had initiated a project
proposal for a pilot plant facility with The Department of Scientific
and Industrial Research (DSIR), Ministry of Science and Technology,
Govt. of India. DSIR has sanctioned partial funding of Rs. 110 million
under the prestigious scheme named “Technology Development and
Demonstration Program (TDDP)”. Indoco plans to develop commercially
viable API processes pertaining to certain niche molecules going
off patent in the next 5 to 7 years. This scheme will also support
duty free import of analytical instrumentation. The project is
expected to produce commercial APIs by March 2016.
We are at the threshold of a new decade and find ourselves
amidst exciting prospects for the Pharma Industry. We shall
continue to improve our performance on the Domestic as well
as the International front and endeavour to take Indoco to
newer heights. We re-affirm our assurance to all our shareholders
of adhering to our core values which are in line with Indoco’s
vision and mission.
As part of corporate social responsibility, Indoco has always
been on the forefront in meeting its obligations towards the
betterment of society.
I would like to express my gratitude to all our stakeholders
including shareholders, customers, bankers, vendors and the
medical fraternity for their unstinted support. I thank all
Indocoites for their contribution towards building a great
SURESH G KARE
Chairman and Managing Director