INDUSTRY STRUCTURE AND DEVELOPMENT
As there has been a growing consensus over providing new innovative
therapies to patients, Indian pharmaceutical market is estimated to touch $130 billion in
value by the end of 2030. Meanwhile, the global market size of pharmaceutical products is
estimated to cross over the $1 trillion mark in 2023.The year 2023 holds a positive
outlook for Indias pharmaceutical industry, with a deeper focus on quality manufacturing,
affordability of drugs and adoption of innovation and technology.The pharmaceutical
industry witnessed the normalization of trends that emerged in the last three years. The
sector this year was marked by a greater degree of collaboration between the government
and industry, with both playing a pivotal role in helping the sector further strengthen
its position in the global market. Owing to the COVID-19 pandemic, the entire landscape of
the pharmaceutical industry has had a paradigm shift, with the collaboration between the
government and the industry being increasingly seen in a positive light.
According to Indian Pharmaceutical Alliance, several initiatives and
forward-looking policies were introduced to streamline processes, allowing the
pharmaceutical sector to leapfrog to a stronger growth trajectory. "Despite
geopolitical issues, India continued to supply medicines to over 200 countries, living up
to its reputation as the pharmacy of the world. OPPORTUNITIES AND THREATS
A bright future stands ahead for Indias pharmaceutical business in
2023, with a greater emphasis on quality manufacturing, medicine affordability, and the
use of innovation and technology. However, to combat certain challenges like low R&D
spending, scarcity of skilled labor, intellectual property (IP) regulations and rights,
and potential export contraction, a high level of agility and resilience is required.
Following are some of the key trends that the industry is likely to
experience in the coming year:
- Proactive Quality Management System
- Digital Technologies
- Precision Medicine
- Emerging Markets - Drive Innovation
- Greater Adoption of AI and Machine Learning
Your Company is major manufacturer and Traders of Ferrous Sulphate in
its Crystal, Exsiccated & Granular form, Microcrystalline Cellulose Powder (MCCP)
Cellulose Powder (CP).
Expansion of Companys Business
For expansion of business the Company has received clearance via EC
identification Number EC 22B058MP119299 letter from State Environment Impact assessment
Authority (SEIAA), Madhya Pradesh for Manufacturing of
1. Steriod and Harmones upto the production limit of 90 tons
2. API/ Intermediates upto the limit of 1800 tons
Beside this, SEIAA Madhya Pradesh also granted the approval to the
Company to enhance the production limit of existing drug such as Diclofanec sodium,
Aceclofenac, Mefemanic Acid, Fenbendazole along with Intemediates that belongs to Chemical
Group such as 4- Nitro Benzyl Chloride, 3- Nitro Benzyl Chloride, Paranitrobenzyl Alcohol
etc, manufactured by the company.
New Machineries & Equipments are installed in the Company. Also
required alterations are almost completed, and we have already started manufacturing
Steroids namely Dexamethasone IP, Dexamethasone Sodium Phosphate and Betamethasone Sodium
Phosphate. Almost 150 Kg of Dexamethasone Sodium Phosphate is produced and other steroids
are pipeline for productions namely Betamethasone and Fluorometholone. After producing
these items we hope that the turnover & profit shall increase in the Current Year.
SEGMENT WISE PERFORMANCE
Your Company is multi segment Company as it deals in Pharmaceuticals
and Chemicals products. During the year under review the performances in terms of revenue
of the segments were as follows:- Pharma Unit
In the financial year 2021-22 revenue generated from Pharma Unit was
Rs1900.52 Lacs and in the year 2022-23 the same unit generated revenue of Rs2419.61 Lacs.
Chemicals Unit
In the financial year 2021-22 revenue generated from Chemical Division
was Rs337.71Lacs and in the year2022-23 the
same unit generated revenue of Rs583.91Lacs
OUTLOOK
Overall, the pharma market grew at 9.3% in fiscal 2023 against a growth
of 14.6% and 2.1% in the previous two fiscals, respectively, according to India Ratings
and Research Pvt. Ltd.
The Indian pharmaceuticals market delivered yet another healthy
performance in March 2023.It was on account of a lower base in March last year and robust
performance in the top three therapies-anti-infectives, respiratory and pain management-
which contribute around 30% of the total Indian pharma market sales. Other therapies
reported single-digit growth and overall, the top 10 therapies constituted 87% of the
pharma markets revenue.
We expect a 10-11% year-on-year growth over the next couple of years.
Government of India is in forefront for health care innovation and growth. Government in
its Union Budget 2023 announced new programs and goals to continue leading from
the front. India leads globally in vaccine production and is the
largest producer of generic medications, accounting for 20 per cent of the total worldwide
supply by volume.
In Union Budget Session 2023, the government encourages industries to
invest in research and priority areas. Finance Minister Nirmala Sitharaman announced, a
mission to eliminate sickle cell anaemia by 2047 will be launched. It would involve
raising awareness, conducting a comprehensive screening of 7 crore individuals in the
impacted tribal regions between the ages of 0 and 40, and providing counselling through
coordinated efforts. The government would also facilitate select ICMR labs with facilities
like research by both public and private medical collage facultys alongside, private
sector R&D teams.
For innovation in the pharmaceutical sector, through centres of
excellence, a new initiative to encourage pharmaceutical research and innovation will be
implemented. The government persuades business to spend money on R&D in a few chosen
priority fields. At the grassroots level, government has also announced on building 157
nursing colleges in colocation with government medical colleges.
RISKS AND CONCERN
The pharma industry and life sciences sector are facing skyrocketing
operational complexity and ever-increasing pressure to innovate. Although the
pharmaceutical industry and life sciences sector have undergone seismic transformations
over the past decade, new long-term challenges are looming on the horizon.
The bottlenecks faced by the Indian pharmaceutical industry currently
include quality and regulatory challenges that can potentially restrict the projected
growth of the industry over the coming years. With lack of a stable policy environment and
a defined pricing regime for pharmaceutical products, the market shows considerable
fluctuations in the drug pricing which is something that discourages critical growth
investment in third party drug manufacturing.
INTERNAL CONTROL SYSTEM
The Company has a reasonable system of internal control comprising
authority levels and powers, supervision, checks and balances, policies and procedures so
as to ensure orderly and efficient conduct of business, safeguard the assets of the
business, prevent and detect fraud, ensure the completeness and accuracy of accounting
records, to ensure the timely preparation of financial information. Further, the system is
reviewed and updated on an on-going basis on recommendations as and when made by the
Statutory Auditors, Internal Auditors and Independent Audit Committee of the Board of
Directors. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
During the financial year your company has achieved the turnover of
Rs.3013.22 lacs in comparison to previous years turnover of Rs.2253.26 lacs and net
profit of the company is Rs. 46.38lacs in comparison to previous net profit of Rs. 70.86
lacs.
HUMAN RESOURCES
At Biofil we believe that "company grows when its people
grow" and hence we continuously strives to emphasize creation of a conducive work
environment and development of a robust and consistent approach towards talent management
& leadership development. As on 31st March, 2023, Company had 47 employees.
DETAILS OF SIGNIFICANT CHANGES IN THE KEY RATIOS
As per the amendment made under Schedule V to the Listing Regulations
read with Regulation 34(3) of the Listing Regulations, details key financial ratios and
any changes in return on net worth of the Company are given below:
| Particulars |
2022-23 |
2021-22 |
Change |
Reason for change of 25% or more in financial motion |
| Debtors turnover |
2.17 |
1.84 |
18.26% |
No major Variance |
| Inventory turnover |
23.00 |
7.43 |
209.43% |
Increase in Purchases and substantial decrease in average
inventory |
| Interest coverage ratio |
19.94 |
27.02 |
(26.18%) |
Decrease in profitability of the company and subse quent
minor increase in Interest cost |
| Current ratio |
1.63 |
6.23 |
(73.80%) |
Substantial increase in trade payables due to in creased
purchases on account of substantial in crease in operations during the year. |
| Debt-Equity ratio |
0.88 |
0.12 |
627.14% |
Substantial increase in trade payables due to in creased
purchases on account of substantial in crease in operations during the year. |
| Operating profit margin (%) |
2.78% |
4.71% |
(40.97%) |
Reduction in profitability of the company. |
| Net profit margin (%) or sector-specific equivalent ratio as
applicable |
1.87% |
3.12% |
(40.20%) |
Reduction in profitability of the company. |
CAVEAT:
Some of the Statements in Management Discussion and Analysis describing
companys objective may be "forward looking statement" within the meaning of
applicable Securities Law and Regulations. Actual results may differ substantially or
materially from those expressed or implied. Important factors that could influence
companies operation include various global and domestic economic factors.
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