The fiscal 2011-12 was a significant year for Aanjaneya Life care for
its robust performance on the one hand and diversity of initiatives to
accelerate this growth on the other.
The financial year under review commenced on a strong note. Our
Rs.117-crore IPO was oversubscribed 1.11 times (retail investors 1.84
times and non- institutional investors 2.65 times) despite a
challenging investor environment.
Aanjaneya justified the faith reposed by its shareholders through its
first-ever performance following listing. The Company grew its top line
50%, EBIDTA 52% and profit after tax 14% even as most companies were
affected by the economic slowdown.
Our products received increasing acceptance in the global and domestic
markets. Our quinine-based APIs, our flagship business vertical,
registered a robust 52.46% growth in sales volumes; our formulations
business grew 46.69% as we strengthened the visibility of our generic
brands. In our services space, we added reputed names to our P- 2-P
clients. The combination of these initiatives translated into stronger
margins, liquidity and brand.
The result was increasing peer recognition. Aanjaneya was nominated
Emerging Company of The Year 2011 and India''s Most Technically &
Scientifically Advanced Pharmaceutical Manufacturing Unit of the Year
2011 at 4th Annual Pharmaceutical Leadership Summit & Awards 2011.
The journey has just begun
At Aanjaneya, we are convinced that we will successfully enhance value
for our shareholders through an ability to significantly increase
volumes and value.
Volumes: At Aanjaneya, we are convinced that in a challenging and
fast-evolving industry space, success is derived from the ability to
engage in successful Greenfield or brown field projects. In 2011-12,
Aanjaneya acquired Apex Drugs and Intermediates Ltd, a Hyderabad-based
integrated API company for Rs.250 crore. The acquisition helped the
Company achieve in weeks what would normally have taken three years to
accomplish. This acquisition immediately added a number of APIs in new
therapeutic segments (AIDS-HIV, diabetes, Ace inhibitors and CNS).
Besides, this acquisition is expected to add about Rs.200 crore to our
top line without stretching our financials.
Aanjaneya reinforced this acquisition through the following
- Two GMP-compliant API blocks are expected to commence operations in
September 2012, adding 10 new APIs to the product basket.
- One intermediate block has commenced operations in March 2012 - it
manufactures one API in addition to intermediates for the new API
- The full benefit of the Apex acquisition will add to the top line.
- The new 50-million unit table ting plant will commence operations in
- The EU-GMP lozenge unit will commence operations in September,
Value: At Aanjaneya, we are convinced that the higher the margins, the
stronger the cash flow, the lower the debt, the stronger the ability to
negotiate and the relatively simpler way to enhance shareholder value.
At our Company, we are engaging in a significant initiative to enhance
value: extending our formulations basket to lozenges is one of the most
important. We are developing lozenges as Ethical Prescription Dosages
(EPD) across multiple therapeutic segments, a pioneering initiative
within the Indian pharmaceutical industry.
Lozenges use the sublingual route (through the mouth) to enter the
bloodstream with a nominal reaction time of only 10-12 minutes as
against most tablets or capsules, which disintegrate only in the
intestine with a reaction time of 35-45 minutes. We are optimistic that
this product superiority will lead to stronger prescription compliance
and consumer pull; for instance, the US lozenge market is estimated at
US$ 10 billion while the Indian lozenge market is only Rs.1,000 crore, a
difference that is expected to narrow. The Company entered this space
following the acquisition of Prophyla in 2010, emerging among five
lozenge manufacturers in India.
Going ahead, the Company will produce lozenges that address basic
health issues, widening their relevance. In line with this objective,
the Company created a dedicated R&D team to develop lozenges as a
pharmaceutical product, reconciling allopathic and ayurvedic benefits.
The Company created a large basket of unique lozenges of which 80% can
be provided to OTC consumers. The Company developed a bouquet of
first-time products with ayurvedic active ingredients in multiple
The Company is reinforcing its existing capacity (2.5 million lozenges
a day) with a completely new lozenge block 40 million capacity) in
compliance with EUGMP guidelines to be commissioned in 2012- 13. The
Company is collaborating with a marketing company with a strong
pan-India presence to market its lozenges. It filed dossiers to
register lozenges in 15 countries and received registrations from some.
Besides, the Company expects to enhance value through the following
- We launched Artemisinin products - third-generation anti- malaria
therapy and other niche APIs at its new GMP blocks - quinine sells for
Rs.6,000 a kg and Artemisinin- based salts is at Rs.50,000 a kg; an
estimated 40% the Artemisinin volume will further be value-added into
- We expect to consume a larger proportion of APIs from the Mahad
unit at our new table ting facility following commissioning.
- We expect to convert about 30% of the APIs from this unit into
formulations at our Pune unit (new table ting block to be commissioned
in September 2012); formulation sales are expected to be four times our
- We will convert small quinine volumes into quinine lozenges.
Message to shareholders
We are at an inflection point in our history where growth in revenues,
margins and profits will translate into enhanced value in the hands of
Dr Kannan Vishwanath