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Granules India Chairman's Speech > Engineering - Heavy > Chairman's Speech from Granules India - BSE: 532482, NSE: GRANULES
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Granules India

BSE: 532482|NSE: GRANULES|ISIN: INE101D01020|SECTOR: Pharmaceuticals
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Chairman's Speech (Granules India) Year : Mar '17

DEAR SHAREHOLDERS,

At Granules, we have always believed in delivering high quality products across the globe. We continue to strengthen our research and operating capabilities which will enable us to stay ahead of the curve by providing off-patent drugs to our customers spread over 60 countries. We have embarked on a transformational journey, which is aimed at creating a business model, which is self-sustaining, future-ready and growth driven. This journey was not only about honing our skills but also about getting better in embracing the desired changes. The time is right for us to put in more effort and ensure that the strategies we had adopted in the last couple of years are being finally implemented.

PERFORMANCE REVIEW

During the financial year under review, our consolidated revenues grew by ~4% to H14,353 mn compared to the prior year. During this period our EBITDA stood at H3,088 mn as compared to H2,815 mn, resulting an increase of 10% from last year. It is also important to highlight here that, our joint venture entities have contributed positively to our bottom-line and added H247 mn to arrive at the consolidated pAT of H1,645 mn, an increase of 34% compared to previous financial year. I would like to reiterate here that the culture of efficiency developed over the years at Granules contributed towards this commendable performance. During this period we improved our EBITDA margin by 116 basis points to 21.5% and pAT margin by 257 basis points to 11.5% compared to FY16. This improvement was primarily driven via the strategic fine-tuning of our product mix, along with escalated sales of our products in regulated markets like the us, Canada and Europe. Contribution of 67% of the sales in FY17 was through regulated markets as compared to 61% in FY16. Our five key molecules put together have contributed around 85% to the overall sales mix. The result: a stronger financial position with a bottom-line improvement of 34% over previous year and also a marked improvement in balance sheet profile with gearing ratio coming down by 30 bps over the previous year to 0.7 as on March 31, 2017.

OPERATIONAL REVIEW

I am pleased to state that your Company achieved several operational milestones during the year. We are on track regarding the completion of our new ApI manufacturing facility at Bonthapally in Hyderabad, which would result in expanded capacity for paracetamol, Metformin, and Guaifenesin. During the same time, we also expect to commercialize an additional 6,000 TPA PFI capacity at Gagillapur, the construction of which is going on as per our internal targets.

Aligned to our strategic intent of emerging as a manufacturing efficiency focused and research-led pharmaceutical company, I am happy to inform that during the financial year 2016-17, we successfully filed 3 ANDAs from Hyderabad and 1 from Virginia, USA. The filing from the Virginia facility is the first filing of that site for the us market. In addition, we successfully filed 3 DMFs for the US markets and 2 European CEps from our Vizag facility with the objective to create a future portfolio of APIS to be used either organically for formulation development or to supply to other pharmaceutical companies.

The Gagillapur facility completed inspections by INFARMED and us FDA, highlighting our respect for the stringent norms that have been laid down by the regulatory authorities. During last year, we received the license from the Drug Enforcement Agency of the united States for our Virginia facility in the us, which will enable us to store and develop narcotics products.

Granules pharmaceuticals inc. our us based wholly owned subsidiary entered into an agreement with uspharma to acquire 12.5% of its equity. uspharma, in collaboration with manufacturing partners, has submitted 5 ANDAs with para IV and para ill certifications, out of which 4 ANDAs have exclusively out-licensed to us. We will be responsible for the marketing and distribution of the products in the united States after final approval from the us FDA.

We ventured into specialty business by initiating the construction of a Greenfield oncology oral solid dosage and high potent Api manufacturing facility at Vizag. The construction work is currently on-going and expected to be complete by the end of FY18.

Furthermore, we reviewed our shop floor operations and undertook a number of business-strengthening initiatives. We recognized that any improvement on these fronts would translate into reduced production time and enhanced efficiencies. Strengthening management bandwidth is also one of the key priorities of the organization as it can enable us to achieve our desired goals. This way we can also imbibe the industry expertise in our action plans.

OUTLOOK

As an optimist, l would say that the planned execution of our strategies has yet to materialize into tangible results, but we are seeing this as a strategic step towards sustainability. We injected nearly H3,457 mn during the year in capex and expect to see our efforts bear fruit in the coming years.

The core strengths of the Company are tested during challenging times. Keeping this in mind, at Granules, we have geared up with a long-term sustainability model backed by initiatives that will enable us to sustain our growth momentum in the years to come. This would help us enhance our revenues, strengthen our profit margins and create attractive value for all our stakeholders.

Sincerely

Krishna Prasad Chigurupati

Chairman & Managing Director

Management Discussion and Analysis

Source : Dion Global Solutions Limited
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