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Amrutanjan Health Care
BSE: 590006|NSE: AMRUTANJAN|ISIN: INE098F01023|SECTOR: Pharmaceuticals
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« Mar 12
Chairman's Speech (Amrutanjan Health Care) Year : Mar '13
Dear Valued Stakeholders,
 
 Your Company saw flat overall top line growth after growing by double
 digits the past two years, but continued growth in new products that
 helped offset slow down in traditional products. The Roll On format
 crossed the 10cr revenue mark the first time domestically and Rs.12 cr
 overall. The Roll On brand generated 10% of the overall revenue with
 wide acceptance from both youth and mature users alike. The Brand grew
 volumes by 30% year over year.
 
 Your Company, which commands a 23%, Market Share in the Head Ache
 segment, hopes to drive growth in this category through innovations
 like Roll On. The white balm segment also showed marginal growth, which
 along with Roll On overcame slowdown in the yellow balm. There seems to
 be a marked shift in consumer usage away from colored balms. Your
 Company currently generates 40% share of revenue from the yellow
 segment with another 40% from the white. Roll On spray and others
 contribute the remaining 20%.
 
 Anothervirgin market for Amrutanjan is the body pain segment which is
 expanding at a rapid pace due to traditional Allopathic brands (of
 Pharmaceutical companies) entering the FMCG/OTC space. Due to the
 Allopathic formulations that are fast acting, Doctor recommendations
 and aggressive marketing campaigns, these brands are gaining share from
 the current Ayurvedic brands. Your Company has a clear vision of
 focusing on Head, Body and Congestion segments of the Rubefacient
 category with products developed for each segment.
 
 Your Company also managed to control expenditure and maintain margins
 inspite of key raw material price inflation reaching the highest levels
 in the last decade. Menthol which is a key ingredient tripled in value
 since 2009. The Lean Cost initiative we started countered this movement
 with Gross Margins actually growing in the fourth quarter. Your Company
 reduced overall Packing Material usage by 5% resulting in cost savings
 (annualized) of 2.5 cr and also meeting good environmental practices.
 
 The Beverage business in the second year of operation (post
 acquisition) saw increased investments in the brand and distribution.
 The category overall saw a slowdown in 2012 as compared to 2011 (when
 we grew 30%) but your brand Fruitnik consolidated its 3rd position in
 TN, in share of market with new flavor launches and range selling. The
 business bounced back to growth in the 4th quarter. The future of this
 business lies in focusing on value added beverages that enjoy high
 margins.
 
 The Pain Services business saw increased consumer traction with
 revenues reaching 1cr in the second year of operation. The prior year
 revenues were 25L.
 
 We are treating around 300 consumers month on month and truly
 leveraging the power of the Amrutanjan Brand. Your management sees a
 unmet market need for speciality Pain Clinics.
 
 After growing for two consecutive years and 7 quarters straight in 2011
 and 2012 , we came to a standstill in 2012. This is a execution gap and
 we have to admit as much. We are bringing back focus on fundamentals
 and have seen traction regained in the last quarter of 2013 which we
 are confident of continuing into the future,
 
 Sincerely,
 
 S. Sambhu Prasad
Source : Dion Global Solutions Limited
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