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Albert David Ltd Management Discussions

1,197.15
(-0.81%)
Jul 22, 2024|03:32:54 PM

Albert David Ltd Share Price Management Discussions

ECONOMY & INDUSTRIES OVERVIEW Global Economy

The global economy is experiencing several trends and challenges: Infiation has been a significant issue in several major economies, driven by supply chain disruptions, increased demand as economies reopen, and fiscal policies aimed at stimulating recovery. Global supply chains continue to face disruptions due to various disturbing factors, affecting various sectors such as manufacturing, retail, and technology. More so, geopolitical issues, including war, red sea crisis, trade tensions between major economies, sanctions, and regional conflicts, add uncertainty to the global economic outlook. Central banks globally are navigating the balance between supporting economic recovery and controlling inflation, with varying approaches to interest rates and monetary policy. In general, while there are signs of recovery and adaptation in many parts of the world, the global economy remains influenced by ongoing challenges and uncertainties, requiring careful management of policies and investments to ensure sustainable growth.

Indian Economy

The GDP of India which was expected to register double digit growth during FY 2023-24, grew at around 7.2%. Because of a business-friendly atmosphere and supportive policies by the Indian Government for all sectors, higher GDP growth is expected in the FY 2024-25 at around 8.2%. The growth story of India seems robust and with inflation under control and increasing disposable income in the hands of people, we are destined to grow at a fast pace.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The details of the financial performance of the company are appearing in the Balance Sheet and the Statement of Profit & Loss along with notes to financial statements forming part of the Annual Report. Salient features of financial performance during the Financial Year 2023-2024 vis-?-vis Financial Year 2022-2023 are under noted: (Rs. in Lakhs)

Financial parameters

2023-24

2022-23

Revenue from Operations

36,246.17

34,156.44

Other Income

5,755.21

1,539.64

Earnings before interest, tax, depreciation & amortization

10,443.17

5,973.97

Gross Profit (EBDTA)

10,411.05

5,928.38

Financial parameters

2023-24

2022-23

Profit before exceptional item & tax

9,728.53

5,073.54

Exceptional Item

-

-

Profit after tax

7,542.01

3,617.49

The company always keeps track of the latest development in the field of technology and remains in continuous touch with foreign manufacturers/machine suppliers for latest development in the pharmaceutical industry. E_orts are being made to adopt latest technology to upgrade its units for effective cost control to meet market demand. The Company had introduced two products ‘Evaston OD 10 mg and ‘Alamin SE in the market during the last year, and during the year under review, the Company is in the process of introducing quite a few new products under different brand names.

INDUSTRY STRUCTURE & DEVELOPMENTS

The global pharmaceutical industry is projected to continue its growth trajectory with several key trends and challenges:

1. Market Growth: The pharmaceutical market is expected to expand due to increasing healthcare needs globally, aging populations in developed countries, and rising incomes in emerging markets.

2. Technological Advancements: Innovations in biotechnology, genomics, and personalized medicine are transforming drug discovery, development, and delivery.

3. Regulatory Landscape: Stricter regulations and compliance requirements are shaping how pharmaceutical companies operate and bring new drugs to market, particularly in major markets like the US, EU, and China.

4. COVID-19 Impact: The pandemic has accelerated digital transformation, telemedicine adoption, and vaccine development, influencing long-term industry strategies.

5. Mergers and Acquisitions: Consolidation within the industry continues as companies seek to enhance their pipelines, capabilities, and market presence.

6. Focus on Rare Diseases and Specialty Medicines: There is a growing emphasis on developing treatments for rare diseases and specialized therapies, driven by regulatory incentives and high unmet medical needs.

7. Supply Chain Challenges: The industry faces ongoing supply chain disruptions and the need for resilience in manufacturing and distribution networks.

8. Environmental and Sustainability Initiatives: Pharmaceutical companies are increasingly focusing on sustainability, reducing carbon footprints, and adopting environmentally friendly practices in manufacturing.

9. Digital Health: Integration of digital technologies such as AI, blockchain, and IoT is transforming healthcare delivery, patient monitoring, and adherence to treatment protocols.

10. Global Health Equity: E_orts are being made to address global health disparities through initiatives such as affordable access programs, partnerships, and technology transfer agreements.

Overall, while the pharmaceutical industry faces challenges such as regulatory pressures and supply chain issues, it also benefits from technological advancements and a growing market demand for innovative therapies. Adaptation to these trends will be crucial for companies aiming to thrive in the evolving landscape of 2024 and beyond.

OUTLOOK

The Indian pharmaceutical industry is poised for growth with opportunities in generics, biotechnology, and specialized medicines. However, it will need to navigate regulatory challenges and invest in innovation to maintain its competitive edge in the global market.

Various factors that will contribute to the pharma marketgrowthinIndiaareGovernmentinitiativessuch as Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana and Ayushman Bharat Yojana under National Health Protection Scheme (NHPS). One of the most notable measures taken so far was the introduction of the PLI Scheme. By incentivizing domestic production, the scheme aims to make India a global hub for pharmaceutical manufacturing, ensure drug security, create employment opportunities, and boost overall economic growth in the pharmaceutical sector. Till now, a few pharmaceutical companies are being supported under the scheme. The scheme for Strengthening the Pharmaceuticals Industry (SPI), which focuses specifically on MSMEs and pharma clusters in the country, with the aim of providing the necessary support needed for them to boost their productivity, capacity, and quality, is expected to give further fillip to the industry.

The governments role in the pharmaceutical industry is shaped by a balance between promoting innovation, ensuring drug safety and e_cacy, protecting public health, and addressing a_ordability and access issues. This relationship continues to evolve as new healthcare challenges emerge and societal expectations change. With the supportive governmental machinery and increasing demand for quality healthcare, we are sure that Indian pharma industry has a great future ahead.

OPPORTUNITIES AND THREATS

India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications. The Indian Pharmaceutical industry is currently ranked third in pharmaceutical production by volume. Indian pharmaceutical industry enjoys significant strengths such as cost advantage and a large skilled workforce, it also faces challenges such as quality concerns and dependency on imported raw materials. Moreover, intense global competition from other low-cost manufacturing countries and multinational pharmaceutical giants. The industry is subject to stringent regulatory oversight both domestically (by the CDSCO - Central Drugs Standard Control Organization) and internationally (by regulatory bodies in target markets like the FDA in the USA, EMA in Europe, etc.). Changes in regulations can impact manufacturing processes, approval timelines, and market access. Despite these risks, the Indian pharmaceutical industry also offers substantial opportunities due to its skilled workforce, cost advantages in production, strong research and development capabilities, and a growing domestic market.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has implemented an Internal control framework to ensure all assets are safeguarded and protected against loss from unauthorized use or disposition and transactions are authorized, recorded and reported correctly. The framework includes internal controls over financial reporting, which ensures the integrity of financial statements of the Company and eliminates the possibility of fraud. The Companys internal control system and procedure is commensurate with its size and nature of the business. These control mechanisms ensure optimum use and protection of the resources and compliance with the policies, procedures and statues. Reputed firms of Chartered Accountants carry out audits throughout the year and Internal Audit Reports and action taken reports are periodically reviewed by the Audit Committee of the Board of Directors. During FY23-24, the Audit Committee was satisfied with the adequacy of the Internal Control systems and procedures of the Company

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

At ‘Albert David, "Adds life to life" is a simple yet profound theme that defines our efforts and reflects our mindset, aspiration and vision. The Company believes that Effective HRD practices contribute to employee satisfaction, retention, and productivity, ultimately helping organizations achieve their goals and maintain a competitive edge in the marketplace. The Company is committed to maintaining cordial industrial relations with unionized factory staff, field forces, as well as non-unionized employees, in the best interest of the company. Best efforts are made to ensure the highest standard of performances from the employees through adoption of best practices. The total employee strength of the Company as on 31st March, 2024 stood at 1497.

SEGMENT-WISE PERFORMANCE

The Company operates in a single segment and hence cannot be segregated in terms of business verticals or geographical presence, in terms of Note No. 3 & 64 to the financial statements.

During the year under review, your Company achieved Net Sales and Gross Profit of Rs.362.46 Cr. & Rs.104.11 Cr. against Rs.341.56 Cr. & Rs.59.28 Cr., respectively, during the previous year.

KEY FINANCIAL RATIOS ARE AS UNDER:

Particulars

2023-24

2022-23

Change (%)

Debt-Equity Ratio (in times)

0.01

0.01

-56.96*

Current Ratio (in times)

3.75

3.07

22.35

Interest Coverage Ratio (in times)

78.04

36.22

115.45**

Inventory Turnover Ratio (in times)

17.62

18.27

-3.56

Debtors Turnover Ratio (in times)

12.08

12.29

-1.74

Operating Profit Margin (%)

4.95

06.08

18.58

Net Profit Margin (%)

20.93

10.64

10.30

Return on Net Worth (%)

25.13

16.22

8.91***

* Decrease is due to decline in current borrowings and increase in shareholders equity.

**Increase is due to increase in earning for debt service contributed mainly increase in other income.

***Increase is due to increase in other Income for mark to market valuation in case of equity oriented Mutual Fund Investment.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may contain certain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the statement with crystallization of unforeseen predicaments in the sphere of Government policies, local, political and economic developments, risks inherent to the Company and other factors.

A. K. Kothari

Dated : 13th May, 2024

Executive Chairman

Place : Kolkata

(DIN: 00051900)

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