Bajaj Healthcare Ltd Management Discussions.

Global economy overview

Plagued by the COVID-19 pandemic, the global economy reported degrowth of 3.5% in 2020 compared to 2.9% growth in 2019 - the sharpest contraction since World War ii. the rapid spread of the novel coronavirus starting mid-March of 2020 and the consequent suspension of economic activities across the world resulted in the steep decline in economic activities. the pandemic has disrupted lives across all countries and communities and negatively affected global economic growth in 2020 beyond anything experienced in nearly a century.

Further, the stress on the global economy is depicted by the fact that the global FDi reported a significant decline from usD 1.5 trillion in 2019 to usD 859 billion in 2020, a decline of almost 42%. such a low level was last witnessed in the 1990s and is more than 30% below the investment trough that followed the 2008-09 global financial meltdown. the pandemic has also resulted in a substantial raising of the national debt, creating extra pressure on the economies. the national debt in advanced economies is expected to reach 125% of GDP by the end of 2021 and to rise to about 65% of GDP in emerging markets during the same period

How did some of the major economies performed in 2020?

United States: The country witnessed a GDP degrowth of 3.4% in 2020 compared to a growth of 2.3% in 2019.

China: the countrys gross Domestic Product grew 2.3% in 2020 compared to 6.1% in 2019 despite being the epicentre of the outbreak of the novel coronavirus.

United Kingdom: Britains GDP shrank 9.9% in 2020 compared to 1.4% growth in 2019, 2x the annual contraction recorded in the aftermath of the global meltdown in 2009.

Japan: Japan witnessed a contraction of 4.8% in 2020, the first instance of a contraction since 2009.

However, post the devastating health and economic crisis caused by coviD-19, the global economic growth prospects have improved substantially against the backdrop of rapid vaccination rollouts in some of the large and key global economies. in 2021, the global economy is now projected to expand by more than 5% in 2021. A stronger growth outlook for china and the usA, two of the largest global economies, underpins the upward revision. the united states, with rapid vaccinations, additional fiscal stimulus and the reopening of the economy, is projected to grow by 6.2% in 2021 — the fastest rate of growth since 1966. Buoyed by a strong recovery in exports and robust domestic demand, china is expected to grow by 8.2% in 2021.


Recent progress on coronavirus vaccines has brightened the economic growth outlook. According to some economists, a potentially slow rollout of vaccines across developing and emerging economies and the ability of the economies to manage the upcoming coviD waves would be a key factor in determining the return of activity to pre-coviD levels. according to iMF, after witnessing the worst year since World War ii, the global economy is like to stage a commendable growth in 2021. the global economy is expected to expand 5.6% in 2021, the fastest post-recession pace in 80 years largely on account of strong rebounds. this is likely to happen on the back of the steady spread of the coviD-19 vaccines which is to power a stronger global economic recovery in 2021 and a strong economic rebound from a few major economies. amongst the major economies, u.s. is expected to grow by 6.2% in 2021, reflecting large-scale fiscal support and the easing of pandemic restrictions. among emerging markets and developing economies, china is anticipated to rebound to 8.2% this year, reflecting the release of pent-up demand. growth in other advanced economies is also firming but to a lesser extent.

Indian economy overview the indian economy passed through one of its toughest phases in the recent history of the nation, as the government announced a complete lockdown in public movement and economic activity from the fourth week of March 2020. As economic activity came to a grinding halt, the lockdown had a devastating impact on an already-slowing economy as 1.38 billion indians were required to stay indoors - one of the most stringent lockdowns enforced in the world. this resulted in the indian economy contracting by 24.4% in the first quarter of FY21, the sharpest degrowth experienced by the country since the index was recorded.

As the nation continued its fight against the novel virus and wade through the pandemic-induced challenges, the economy and the constituent industries had their fair share of learnings along the way. the impact of the pandemic and lockdown was disproportionately felt across industries. While industries such as hospitality and manufacturing were impacted immediately, the impact on the financial sector was felt with a lag, as is evident from the quarterly GDP numbers.

After recording the deepest GDP contraction among G20 economies in the first quarter of FY21, the indian economy showed great resilience by posting a V-shaped recovery starting the second quarter of FY21. Although the economy contracted by 7.3% in the second quarter of FY21 but grew positively in the last two-quarters of FY21, thereby the economy is expected to have degrown by just 7.3% in FY21 - a robust sequential growth of 24.4% in H2, FY21 over H1, FY21. this sharp indian recovery - one of the most decisive among major economies - has validated indias robust long-term consumption potential. indias economy emerged as the second most resilient economy after Germany in 2021 exhibiting a strong "economic resurgence" to the global economic turmoil caused by the cOViD-19 pandemic.

Rising FDI investment in India

Despite the havoc created by the COVID-19 induced pandemic, the indian economy recorded a total foreign direct investment (FDI) of USD 81.72 billion in FY21 - the highest ever and 10% more than what was received in the previous year. This showcased the confidence of foreign investors in the Indian economy and its ability to make a strong recovery. The boost in FDI inflow in the year ended on March 2021 comes in the backdrop of a series of policy steps taken to improve ease of doing business and to attract investments into domestic manufacturing capacity and an ambitious infrastructure project pipeline.


With the steady rollout of the COVID-19 vaccine, India may have turned toward the road to recovery but is still in need of an encompassing plan to return on the growth track as the nation continues to grapple with the pandemic. Lower infection and fatality rates and the possibility of widespread vaccine deployment are expected to improve consumer and business confidence. Further impetus to the economy is being provided by the pent- up demand for more elastic discretionary goods. This is likely to be driven by the top 10 income percentile of the population that could not spend because of mobility restrictions and may spur private investment that has been contracting for five consecutive quarters now.

According to the World Bank, the Indian economy is expected to stage a rebound in FY22 and is likely to grow at more than 8%, making it one of the fastest-growing economies. Indias growth journey could be the result of a culmination of favorable tailwinds like consistent agricultural performances, flattening of the COVID-19 infection curve, increase in government spending and favorable policies and the quick-roll out of the vaccine, etc.

Global pharma industry

One of the significant contributors to the global and national economies across the globe, the global pharmaceutical industry is one of the very few industries which despite the challenges thrown by the COVID-19 pandemic gained considerable traction. Further, the health issues indicted by the COVID-19 pandemic have showcased the growing importance of the pharmaceutical industry which led to a renewed focus on the industry from the governments and privates. In the pre-COVID era, the global pharma industry was seen grappling with a negative public image due to the rising drug prices, slow innovation rates, and limited availability of key drugs. But the recent COVID-19 induced crisis proved to be transformational for the industry, as it helped change the popular perceptions profoundly and showcase the importance of the industry while helping attract new investments.

According to the industry experts, 2020 and 2021 were expected to be an inflection point in the global pharmaceutical industry as the promise of cell and gene therapies were expected to be delivered to patients better healthcare and remedy from some of the rare diseases. Artificial intelligence (Ai) and machine-learning approaches had also raised expectations that therapy discovery and development are not only to be more innovative but also more time- and cost-effective.

But the rise and the rapid spread of the pandemic coviD-19 since the first quarter of 2020 has eclipsed every other development in the healthcare and pharmaceuticals sector across the globe. As a direct effect of the pandemic, the industry witnessed suspension trials for drugs other than those for coviD-19, delayed product launches, supply chain disruption, and overall delays in drug commercialization. Further the pandemic has given a wake-up call for pharma companies to rethink their operations and customer access, just like it has given to many other industries. amidst such a challenging 15 months, the global pharmaceutical industry witnessed a contraction in growth rate in 2020 just like many other industries despite all the eyes glued on the industry for the coviD-19 vaccine. With the revenues remaining below the usD 2 trillion mark, the global pharmaceutical industry is likely to grow at just 0.6% in 2020 compared to 5.3% in 2019. The global use of medicine also witnessed subdued growth in 2020 and 2021 except for coviD related drugs, and medical spending is expected to have grown at just 2% - 5% annually and is expected to cross the USD 1.1 trillion mark by 2024. Most of the developed markets and the pharmerging markets are likely to see a slag in the growth rates over the next five years compared to the last five, with rates between 1% - 4% and 5% - 8%, respectively.

Changing consumer behaviour in the global pharma industry

Consumers showing greater involvement and engagement - Consumers are increasingly willing to tell their doctors when they disagree with them, are using tools to get information on costs and health issues, are tracking their health conditions and using that data to make care-related decisions, and are accessing and using their medical record data.

Consumers embracing digital transformation - A rising number of consumers are using virtual visits more than ever before and plan to continue using them. Since the onset of the pandemic, consumers using virtual visits rose from 15% to 19% from 2019 to early 2020; this jumped to 28% in April 2020. Even before COViD-19, consumer adoption of virtual visits has been increasing since 2018. On average, 80% are likely to have another virtual visit, even post COViD-19.

Greater use of technology for health monitoring - Growing numbers of consumers are using technology to monitor their health, measure fitness and order prescription drug refills. More than three-quarters of those who track their health say it changes their behavior at least moderately. This is likely to drive growth for the global MedTech industry in the years ahead.

Indian pharmaceutical industry

The Indian pharmaceutical industry emerged as the backbone of the Indian economy when most of the other industries were struggling with the constraints caused by the coviD-19 pandemic and the subsequent lockdown. Nourished by increasing spending, improving accessibility and growing exports, indias pharma and healthcare sector is poised to emerge as one of the few industries in india to record a positive growth in FY21 even as the headwinds created by the pandemic drove the economy to a technical recession and forced players to pause to catch a breath. often referred to as the "pharmacy to the world", today, the indian pharmaceutical industry supplies more than 50% of the global demand for various vaccines, 40% of the generic demand for the USA and 25% of all medicines for the UK. The Indian pharmaceutical industry is one of the fastest-growing pharma industries across the globe and ranks 3rd worldwide in terms of total production volume and 10th by value. Indian pharma industry today is the largest provider of generic medicines; accounts for ~20% of global generic drug exports by volume.

Backed by a strong manufacturing network, the Indian pharmaceutical industry isalso known for its low-cost manufacturing capabilities. indias ability to manufacture high-quality, low-priced medicines, presents a huge business opportunity for the domestic industry. Furthermore, increasing exports to large and traditionally underpenetrated markets such as Japan, china, Africa, indonesia, and Latin america, is expected to help the industry meet its aspiration of becoming the worlds largest supplier by volume. currently valued at around usD 41 billion, the indian pharmaceutical industry is expected to reach usD 65 billion by 2024 after growing at a healthy rate of 10% - 13%. in terms of export india accounts for

20% of global exports in generics, total exports from india in FY20 stood at usD 20.5 billion after growing at more than 10% and are expected to reach usD 25 billion by the end of FY21. For the first six months of FY21, indias total pharma exports stood at usD 11.38 billion - nearly 15% higher compared to the same period in FY20. For FY21 the total exports are expected to touch an all-time high of usD 23 billion, after growing by 14.85% on a y-o-y basis. according to the Pharmaceutical Export council of india (Pharmexil), 55% of indian exports in FY21 are to highly regulated markets. i ndias formulation surged 18% and the bulk drug exports rose 9% on a y-o-y basis in the first half of FY21.

USA is one of the key export destinations for india and is valued at around USD 60 billion and accounts for 25% of indias total shipment. indias other important export destinations include the united Kingdom, south Africa, Russia, and Nigeria.

Major industry trends of the Indian pharma industry

Branded generics occupy nearly 70% - 80% share of the indian retail pharma market Growing exports market due to strong presence in the generics space
Contract Research and Manufacturing Services (CRAMS) is one of the fastest-growing segments within the indian pharma space backed by a strong talent pool and low-cost manufacturing facilities A rising number of indian pharmaceutical players are increasingly tapping opportunities in global generics markets, especially the US and Europe
The industry has been witnessing increased merger & acquisition (M&A) activities from domestic and international players which is likely to boost R&D expenditure to achieve economies of scale and to strengthen the marketing network A great focus to move up the global pharmaceutical value chain by investing in R&D for drug development, drug repurposing, process improvements and digital manufacturing

Indias growing exports

Rising literacy levels is likely to enhance the acceptability of pharmaceuticals, which in turn is likely to boost demand

Growing per capita income and increasing awareness about the benefits of health insurance is expected to augment affordability

The government proposed Pharma vision 2020 intending to make india a global leader in end-to-end drug manufacturing

Favourable government initiatives such as Pradhan Mantri Bhartiya Janaushdhi Kendras (PMBJKs) - kendras aimed at providing medicines affordable rate, is likely to boost sales

The Government plans to provide free generic medicines to half the population at an estimated cost of USD 5.4 billion

120 drugs are expected to go off-patent over the next 10 years; which is likely to create a revenue opportunity for the indian pharma players worth USD 80 to USD 250 billion

Changes in the lifestyle and growth in the instances of lifestyle diseases in india is likely to boost the sale of drugs

A rising number of patients are showing a greater propensity to self-medicate, this likely to boost the OTC market

A constant rise in population is expected to increase the patient pool by ~20% over the next decade

Higher acceptance of biologics and preventive medicines is likely to drive the industry

Worlds largest government-sponsored healthcare insurance programme, with 500 million beneficiaries covered up to ?5 lakh/family and a total of 125+ million e-cards issued till date

Launch of National Digital Health Mission - to increase access to digital healthcare and ensure accountability via health iD card

Supportive FDi policy - 100% under automatic route for greenfield projects and under government route for brownfield investments and 74% under automatic route for brownfield investments

Government incentive - Production Linked incentive (PLi) Scheme for promotion of domestic manufacturing of 53 identified critical KSMs/Drug intermediates and APis


The pharmaceutical industry in india is on the cusp of a remarkable transformation - technological, financial, demographic, and regulatory. At present, the indian pharmaceutical industry players are betting on inorganic growth via mergers and acquisitions, collaborations, joint ventures, partnerships, and in-licensing to build high-value and high-margin asset pipelines. As global pharma organizations are looking to reshape their portfolios divestments, indian firms are looking to build their specialty medicines and complex generics pipeline to tap into these opportunities. Further necessary regulatory changes such as enacting the New Drug and clinical trial Rules are likely to bring an end to a long-drawn-out process to codify the rules applicable to clinical trials and boost the indian pharma industry. Despite the recent concerns, india is fast emerging as the preferred R&D destination for many companies across the globe, outpacing cut-throat rival, china. Faced with increasing drug development costs and commercialization on one hand and drying pipeline on the other, global companies have now chalked out elaborate plans for india not just because of the low costs it has to offer but also due to faster and cheaper time-to-market opportunities, a larger and diverse patient pool, and the availability of a sizable number of skilled scientists. Backed by these favorable macros and microeconomic factors and the governments focus on strengthening nations medical infrastructure, the indian pharma industry is expected to reach a size of usD 130 billion by 2030.

Company overview

Established in 1993, Bajaj Healthcare Limited (BHL)is an emerging player in the indian pharmaceutical industry and one of the fastest- growing mid-cap pharmaceutical companies in india. establishing itself as a bulk drug manufacturer, the company has marked its presence in more than 60 countries across the globe thanks to its strong product portfolio spread across active Pharmaceutical ingredients (APIs), intermediates, and Formulations.

Backed by 9 state-of-the-art manufacturing facilities and strong R&D capabilities, the company is a major player in india with a keen focus on the development, manufacturing, and supply of amino acids, nutritional supplements, and active pharmaceutical ingredients (API). However, recently, the company has undertaken a shift in its business strategy and from being a volume-based player to a value-driven player. the companys manufacturing facilities are accredited with accreditations such as Eu-GMP certificate from agency of Medicinal Products and Medical Devices, croatia, certificate of suitability (cEP), KFDA certificate, iso 9001:2015 certificate, WHo-GMP certificate, GMP certificate, FssAI License, Fssc 22000, and HAccP certificate among others. To further strengthen its position in API manufacturing, the company acquired two new API manufacturing units to further augment its presence within the industry.

Our manufacturing capabilities

Product Facility location Capacity
API & intermediates 5 709 MT/ p.m
FDF 1 92 MN / pcs / p.m

Note : The above table does not include capacities of 3 manufacturing facilities purchased by BHL under sARFAEsi Act, 2002.

Active Pharmaceutical Ingredients (APIs)

Bajaj Healthcare Limited has emerged as one of the leading API manufacturers from India. the company has six API manufacturing facilities spread across India and is accredited by international regulatory agencies. contributing more than 90% to the overall revenue mix, API manufacturing forms the core business of the company. Additionally, more of BHL APIs are being used for captive consumption in the downstream processes. the API vertical will continue to be critical to the companys success since it is the starting point for the companys FDi vertical. Bajaj Healthcare Limited is one of the leading manufacturers of Neutraceuticals in the domestic market - Ascorbic Acid IP, Sodium Ascorbate, and Ferrous Ascorbate.

With a strong in-house product registration team for the export of APIs, the company has a strong international presence in more than 50 countries with an aggregate API manufacturing capacity of 726 MT per month. Over the years the company adopted several R&D enhancing measures, like setting up a new in-house R&D centre, undertake extensive training, and strategic acquisitions, to extend its product offerings in the API space.

Talking Points, FY21

• introduced 4 new molecules during the year

• Acquired three new API manufacturing and one Engineering units during the year

• Played a key role in the nations fight against covid by developing off-patented API "Posaconazole API" used in the treatment of Mucormycosis

• BHLs API business grew by 53.97% and continued to deliver high margins while maintaining a robust order book

Outlook for FY22

The management of BHL expects to grow its API business by 18 to 20% in FY 22, mainly driven by addition of new capacities through acquired assets and introduction of reverse engineering APIs launched in the last financial year.

Segment II

Finished Dosage Formulations (FDFs)

Backed by state-of-the-art formulation manufacturing facility complied with USFDA, TGA (Australia), MHRA (UK), the company entered into the formulations business in 2008 and represents the highest end of the value chain. The company entered this business in 2008. Today, FDF accounts for 9.68% of the companys revenues. BHLs FDF facility in Vadodara, Gujarat, comprises automated processes, robust infrastructure and superior quality systems that efficiently produce FDFs. BHL offers multiple FDF forms comprising tablets, caplets, capsules and oral powders in bulk.

Talking Points, FY21

• increased revenues by 158% from ?2464.31 lakhs in FY 2020 to ?6361.92 lakhs in FY21.

• Successfully developed two off-patented drugs - "Favijaj" (Favipiravir) and "ivejaj" (ivermectin), commercially introduced in the market in FY22

Outlook for FY22

The management of BHL expects to grow its FDF business by 50 to 55% in FY 22, mainly driven by addition of new formulations, business from existing clients and addition of few new clients.

Segment III


One of the few manufacturers of specialty intermediates like calcium Phosphoryl choline chloride (cPcc) & chlorhexidine (cH Base), BHLs intermediates manufacturing capacity today stands at 94 MT per annum. This has given the company a sustainable competitive edge in terms of economies of scale and cost advantages. Presently, the intermediates business supports its API manufacturing and is consumed in-house only.

Talking Points, FY21

Developed a number of new intermediates which helped our downstream operations, in terms development of FDFs.

Outlook for FY22

As majority of the intermediates are being used for captive consumption, we intend to enhance our efficiency to be more cost effective.

Financial review

Key Financial Ratios

Particular Units FY2020 FY2021 Variance Reasons if Variance is More than 25%
Debtors turnover ratio Times 4.78 6.66 39.33 The change in debtors turnover ratio is due to increase in revenue from operation
Interest coverage ratio Times 6.79 12.96 90.87 Interest coverage ratio is higher for the year ended March 31,2021, due to improvement of EBITDA
Inventory Turnover Ratio Times 7.74 5.53 -28.55 Inventor turnover ratio is reduced for the year March, 2021 due to increase in turnover
current ratio Times 1.22 1.41 15.57 -
Debt equity ratio Times 1.49 1.40 -6.04 -
operating profit margin (%) % 13.12 21.58 64.48 Return on operating profit margin is higher for the year ended March 31, 2021, due to reduction of expenses and increase of turnover.
net profit margin (%) % 6.06 12.52 106.60 Return on Net profit margin is higher for the year ended March 31,2021, due to increase in turnover.
Return on net worth (%) % 22.77 43.44 90.78 Return on Net Worth is higher for the year ended March 31,2021, due to higher net profit

Key financial metrics

Parameters FY20 FY21 Growth (%)
Revenue from operations (in lakhs) 65,698.38 41,000.84 60.24
EBITDA (in lakhs) 14,323.98 5,463.28 162.19
PBT (in lakhs) 11,881.97 3,606.02 229.50
PAT (in lakhs) 8,310.89 2,523.67 229.32
Earnings per share (in ) 60.23 18.29 229.32

Analysis of the profit and loss statement

Revenues: Revenues from operations reported a 60.24 % growth from 41,000.844 lakhs in 2019-20 to reach 65,698.38 lakhs in 2020-21. other income of the company reported a 5.81% growth and accounted for only 1.04 % share of the companys revenue pie, reflecting the companys dependence on its core business operations.

Expenses: Total expenses of the company increased by 43.26% from 38048.11 lakhs in 2019-20 to 54,507.67 lakhs in FY21 primarily due to rise in raw material cost, employee cost, finance cost, among others. Raw material costs (70.54% of the companys revenue from operations) increased 44.70% from 32,027.10 lakhs in 2019-20 to 46,342.49 lakhs in 2020-21. Employee expenses, accounting for 5.26 % share of revenues, increased by 637.04 lakhs (22.21%) from 2817.83 lakhs in 2019-20 to 3454.87 lakhs in 2020-21.

Profitability: companys EBITDA increased to 14,323.98 lakhs in 2020-21 compared to 5,463.28 lakhs in 2019-20. Net profit for the year stood at 8,310.89 lakhs compared to 2,523.67 lakhs in the previous year. Pat grew by 229.31% during the year. operating profit margin for the year stood at 22% compared to 13% in the previous year, whereas net profit margin stood at 12.52% in 202021 as against 6.11% in 2019-20.

Analysis of the Balance Sheet

Sources of funds

• The net worth of the company increased by 72.61% from 11,082.75 lakhs as on 31st March, 2020 to 19,130.75 lakhs as on 31st March, 2021 owing to increase in reserves and surpluses. The companys equity share capital comprising 1,37,99,200 equity shares of 10/- each, remain unchanged during the year under review.

• The capital employed by the company stood at 34,305.83 lakhs as of March 31, 2021 as compared to 20,533.40 lakhs as on March 31, 2020.

• Long-term debt of the Company increased by 238.08% to 7,971.33 lakhs as on March 31, 2021 owing to key strategic acquisitions during the year. The long-term debt-equity ratio of the company stood at 0.42x in 2020-21 compared to 0.21x in 2019-20. Finance cost increased by 28.63% from 644.93 lakhs in 2019-20 to 829.60 lakhs in 2020-21 primarily on account of increasing long-term debt. Interest coverage ratio in 2020-21 stood at 12.96x compared to 6.79 in the previous year

Applications of funds

Fixed assets (gross) of the company increased by 22.93% from 26,783.04 lakhs as on March 31, 2020 to 32,925.50 lakhs as on March 31, 2021 owing to the acquisitions. Depreciation and amortisation marginally increased by 33% from 1,212.33 lakhs in 2019-20 to 1,612.42 lakhs in 2020-21.

Working capital management

Current assets of the company increased by 53.39 % from 16,841.59 lakhs as of 31st March 2020 to 25,833.31 lakhs as of 31st March 2021. the current and quick ratios of the company stood at 1.41x and 1.15x, respectively in 2020-21 compared to 1.22x and 1.04x, respectively in 2019-20.

Trade receivables as of March31, 2021 stood at 9,888.28 lakhs, representing 55 days of sales compared with 76 days as of 31st March 2020. the entire receivables are considered good and secure.

Cash and cash equivalents increased 242.46% from 415.85 lakhs as on 31st March, 2020 to 1,424.11 lakhs as on 31st March,2021.


Better product mix, increased volume with less than a linear increase in expenses helped the company report better margins during the year under review. the EBITDA margin for the FY21 stood at 21.58% as compared to 13.12% in FY2020.

Human resources

Our people have played a major role in shaping BHL into what it is today and would continue to do so. At BHL, we believe that people who feel truly associated with the organization are the ones who perform to their true potential. As a core part of our business strategy, it is committed to providing an environment where all its employees feel enabled with a strong sense of belonging. our successful performance during the year can be largely attributed to our people whose persistent efforts helped us provide lifesaving drugs to the coviD impacted people in one of the most challenging environments. We are totally committed to providing a safe, secure and healthy work environment to our employees. We continuously strive to exceed the industry as well as our internal benchmarks in workforce productivity and performance. the professional objectives for employees and teams across levels are directly linked with the organizations objectives and philosophy.

The companys HR culture is rooted in its ability to subvert age- old norms in a bid to enhance competitiveness. the company always takes proactive decisions which are in alignment with the professional and personal goals of employees, thereby achieving an ideal work-life balance and enhancing pride association. BHLs employee count stood at 1,502 as of March 31,2021.

Quality and Compliance

BHL always believed in the quality of products and patient safety. this is being achieved through the implementation of best quality systems, creating the right quality culture and periodic training of employees. We always had a vision to be ahead of the curve in business and are investing significantly in the digitalization program of the key quality management systems to further strengthen our core. We continue to sustain a very high level of transparency with our customers, regulators, statutory bodies, and employees. As a proactive organization, we have started the implementation of our very aggressive plans for expanding our quality function including investments in laboratories and newer analytical capabilities and technologies to make BHL a future-ready organization.

Research and development

From being known as one of the leading suppliers of APIs in bulk, we gradually moved to grow our presence in the manufacture of finished dosage forms and intermediates. over the years, we have been constantly investing in Research and Development, where our team has been able to passionately translate science and technology into pharmaceutical products and manufacturing processes matching the global regulatory standards. With experienced and qualified human resources, our R&D capabilities are the driving force of our current momentum and future growth of the organization. R&D is a crucial attribute in fostering our vision to become a global leader in the pharmaceutical manufacturing space. We are augmenting our research capabilities and expanding our product portfolio to address the prospective demand across global markets.

Risk management at Bajaj Healthcare Limited Industry risk: A slowdown in the pharma industry may negatively impact the performance of the company.


• the Global pharma industry is expected to grow at over 6% over the next few years.

• Further, the recent pandemic has showcased the importance of the pharma industry which expected to further propel the growth of the industry

• indian pharma industry is likely to continue to grow at steady double digit over the next couple of years and medicine spending is also likely to see double digit growth over the foreseeable future.

Regulatory risk: Any change in regulation might dent the growth of the company as it can impact production


• Every product manufactured by the company is passed through extensive R&D checks and stringent quality control tests as per international norms and standards.

• All manufacturing units of the company are in 100% conformance with the guidelines issued by the different regulatory bodies across the world.

• The Company regularly invests in plant automation which has helped meet the regulatory compliances.

Geographical risk: Presence in one market or over dependence on any one region could result in stagnant revenues.


• the company has a business presence in more than 60 countries across the world including countries like the usA and uK.

• Two of the biggest pharma market in the world i.e. the usA and the uK account for major share of the companys export revenue.

Competition risks: the company operates in a competitive environment and, as such, may experience increased competition that could adversely affect BHLs sales, operating margins and market share.


The company has a continued focus on its operating performance from manufacturing to R&D to distribution to ensure that it continues to service the needs of its clients efficiently and in a timely manner. Further, the company periodically enhanced its offerings basket to stay ahead of the curve.

Foreign currency risk: the company is exposed to foreign currency risk arising primarily owing to its business presence in a number of foreign countries.


• Foreign exchange rate exposures are managed by the company by utilizing forward foreign exchange contracts.

• the company enters into forward foreign exchange contracts to manage the risk associated with anticipated future business transactions denominated in foreign currencies.

Internal Control Systems and Adequacy

Commensurate with the size and nature of operations, the company has adequate systems of internal control and procedures covering all financial and operating functions. it believes that a strong internal control framework is one of the most indispensable factors of corporate Governance. continuous efforts are being made to enhance the controlling systems response to unauthorized use or losses. the audit committee supervises all aspects of internal functioning and advises corrective action as and when required.

Cautionary statement

This statement made in this section describes the companys objectives, projections, expectations, and estimations which may be forward-looking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. the company cannot guarantee that these assumptions and expectations are accurate or will be realized by the company. the actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the company. the company assumes no responsibility to publicly amend, modify or revise any forwardlooking statements based on any subsequent developments.