Dear Shareowners,
It is my pleasure to present before you the 59th Annual Report of your
Company. I hope that you all are keeping safe and healthy!
Let me begin by expressing my deepest gratitude to the medical
fraternity for their extraordinary fortitude in serving society and in ramping up
healthcare infrastructure along with intensive vaccination program during last year across
the country to make our lives safer and more convenient.
The recent period has been relentless with the global pandemic,
military conflict, supply chain shortages and businesses had to cope with this
unprecedented sequence of events with speed and agility. While the world was recovering
post pandemic, inflation and supply chain disruption had offset the buoyancy in the
recovery of consumption across the globe. The world economy is progressively losing
momentum caused due to rising global energy and food prices, deterioration in geopolitical
environment and monetary policy normalisation to combat inflation.
The industry is expected to show some level of recessionary impact in
the near to mid-term as concerns over inflation and recession grow across the US and
Europe, the largest markets for the pharma industry. As per the World Bank estimate
between 2021 and 2024, global growth is projected to slow by 2.7 percentage points.
Despite near-term uncertainties, the Indian economy holds immense
promise. Indian pharma stands on four of its biggest strengths namely affordability,
accessibility, agility and quality. It can grow not only in size and reach, but also in
terms of capability and innovation.
Keeping this in mind, we have invested over the years in building our
capacities and capabilities and have strengthened our processes for having superior
quality and compliance, which has resulted in consistent accreditation approvals from the
world regulatory authorities. Our manufacturing plants have been accredited by highly
respected international regulatory authorities such as the US FDA, UK MHRA, SAHPRA (South
Africa), WHO GMP, TGA (Australia), PMDA (Japan), KFDA (Korea), Russia and ANVISA (Brazil).
We have capitalised on our manufacturing excellence to ensure sustained deliveries to our
customers despite the challenges of APIs availability.
The technology transformation will be the next normal for all of us. We
aim to enhance quality and compliance, augment productivity through enhanced operational
excellence and data integrity. We have made significant efforts by investing in digital
transformation to ensure a safe and productive working environment. We introduced a
learning module system at all our locations to digitize our standard operating processes
for upgrading the workforce in a more contemporary mode that is suited for the future.
During the year, we seamlessly completed virtual audits/inspections of our plants for
various overseas regulatory authorities, a testimony of our robust IT system.
We continue to invest in R&D for our markets and have the necessary
regulatory approvals in place. Unichem has developed several pharma products that address
the needs of relevant and growing therapeutic areas like gastroenterology, cardiology,
diabetology, psychiatry, neurology, anti-bacterial, anti-infectives and pain management.
The Centre of Excellence at Goa, fuelled by a team of scientists and PhDs, enables us to
leverage our investments in manufacturing capabilities by increased filings with various
regulators which in turn will enable us to deliver robust growth in the coming years.
Unichem concluded its major capex-cycle spread over the last 3 years at
all its manufacturing facilities i.e. for formulations, APIs and at its R&D centre.
This will ensure that we are ready to unfold the market opportunities while maintaining
the highest quality standards. Most importantly, this capex was funded entirely from the
internal accruals. With most of these facilities commencing operations, we expect an
easing of pressure on our operating free cash flow in the coming years. With this newly
built capacity and capabilities, we are hopeful that we will continue to deliver value and
strengthen our foundation for growth.
It was a year of challenges, but also a year of significant
achievements. The first nine months of the year saw our revenues decline, but the fourth
quarter saw a complete turnaround and I am happy to share that we closed the year on a
very strong note. Consolidated Revenue from Operations increased to 1,269.83 crs during
the financial year 2021-22 from 1,235.14 crs in the previous year, registering a growth
of 2.8%. US which is a major market for your Company achieved sales of 734.29 crs during
the fiscal year 2021-22 as against 687.54 crs in the previous year, registering a growth
of 6.8%. Revenue from the international formulation business contributed to 80.6% of Net
Revenue from Operations.
As a continuous effort toward rewarding Shareholders, it gives me
immense pleasure to inform you that the Board of Directors of the Company has recommended
a Dividend of 4/- (200%) per share. The dividend shall be paid if approved by
Shareholders at the ensuing 59th Annual General Meeting.
Our long-term commitment to society and communities was further
augmented through our CSR programmes implemented during the year even though there was no
mandatory requirement for CSR spending. Our key focus this year was on addressing health
and educational concerns while co-creating value with local institutions and people.
Although the future is full of uncertainty and challenges, the outlook
is one of the cautious optimism. Recovery might get ‘delayed' but not
‘derailed'. However, Companies will have to remain on guard concerning the
geopolitical situation and the pandemic-related uncertainties. Several multibillion-dollar
drugs going off patent over the next few years and increasing use of pharmaceutical
generics in developed markets to reduce healthcare cost will provide attractive growth
opportunities to generics manufacturers and thus, Indian pharmaceutical industry is poised
for an accelerate growth in the coming years.
We have built new capacities and capabilities, including R&D,
Manufacturing and Quality and expanded our product portfolio to deliver long-term,
sustainable growth in our generics business. We are hopeful that we will continue to
deliver value and strengthen our foundation for growth. With formulations constituting the
core of the Company's business, Unichem is backward integrated to API manufacturing,
which will add value to the customer in terms of quality and sustainability going forward.
The outlook for the Company remains bright, going by the number of products/filings filed
or lined up in coming years.
As the pandemic has subsided, the exceptional growth of the past in
acute therapies may not be repeated, however, emerging lifestyle diseases would boost
demand for chronic drugs. On the back of investments made so far, we expect to drive
revenue growth in our businesses and even as we plan the next phase of healthcare, we are
acutely conscious to ensure growth is environmentally sustainable, socially impactful and
in keeping with the governance standards. While the environment will bring many further
challenges, our unwavering purpose of caring to enhance health through quality products
will give us the confidence to build a stronger, better Unichem for the future.
I place on record my sincere appreciation to our customers, business
associates, banks, suppliers, shareholders and employees for their continued support and
trust reposed in us. I also take this opportunity to extend my gratitude to our esteemed
Board members for their invaluable guidance and support in steering your Company on this
journey toward being a global pharma player.