Bliss GVS Pharma Ltd Management Discussions.

Global economy

The global economy is likely to grow by 5.5% in CY2021, after contracting by 3.4% in CY20201.According to the IMF, global economic output is expected to moderate to 4.4% in CY2022 from 5.9% in CY2021. Supply-chain disruptions in combination with higher energy prices, and rising labour wages effectively contribute to an elevated inflation.

In the short term, developing countries will take time to recover entirely in terms of per capita GDP. In comparison to the pre-pandemic levels, the per capita outcome of developing countries and transitioning economies is likely to decline by more than 2% in CY2022.

Global trade is likely to improve with countries gradually resuming their exports and imports. In CY2022, the worldwide goods and services business is likely to grow by 5.7%. Further, the trade growth is attributable to the surging global demand. However, in CY2023, the growth in EMDEs (excluding East Asia and the Pacific region) is projected to restore to the average rate.

The growth in advanced economies effectively contributed in reducing the headwinds for various EMDEs. Owing to escalating commodity prices, exacerbated by geopolitical conflicts, global inflation is likely to stay at elevated levels. On the other hand, fading supply-chain disruptions and improving demand environment will provide tailwinds to global economic output.


Going forward, the growth is expected to slow even more. Despite the downturn, the predicted expansion rate will be sufficient to get the economy back on track. In 2023, aggregate advanced-economy output will return to its pre-pandemic pattern. Global trade has recovered as a result of a shift in global demand. A solid rebound is projected for investment and stronger trade policies.

Indian economy

The Indian economy is estimated to grow by 9.2% in real terms in FY2022, following a contraction of 7.3% in FY2021. In 2022-23, Indias economy is expected to grow between 8% and 8.5% in real terms. The gross fixed capital formation (GFCF) is expected to expand at a 15% annual growth rate in FY2022, returning to pre-pandemic levels2. To accelerate further growth, the Government of India (GOI) has initiated several policies, such as the PLI scheme and ‘Make in India projects. In FY2022, the investment-to-GDP ratio has raised approximately to 29.6%, owing to rising capital formation because of the growing capex and infrastructure spending.

In FY2022, the nation experienced steady exports of goods and services. Overall trade is expected to grow by 16.5% and 29.4% respectively in the year under review. Despite the pandemic and its ramifications, Indias balance of payments has remained in surplus for the last two years. Resultantly, the RBI continued accumulating foreign exchange reserves, which currently stand at $634 billion as of December 31, 2021.

The growth of Indian economy among advanced economies is fuelled by business investments, which is further aided by constant government emphasis on capex and exports. This focus bolsters production capacity and strengthen aggregate demand. Growth in FY2023 will be aided by gains from supply-side reforms and regulatory relaxation, robust export growth, to increase capital spending.


India is likely to grow rapidly among the worlds largest economies, as India has become major player in world economy, driven by business investment, which will be fueled by the governments emphasis on capital expenditure and exports, which will boost production capacity and strengthen aggregate demand. Due to the improvement in trade growth and improved economic activities Indian market is expected to see a steady recovery.

Global pharmaceuticals industry

A robust healthcare infrastructure drives the socio-economic development and is an essential pillar for any country. Global pharmaceutical market is likely to grow at a CAGR between 3% and 6% by CY2026, thus reaching a total market size of $1.8 trillion.

During the next five years, the US market on a net price basis is expected to increase at a very modest pace. Japan (worlds third largest pharmaceuticals market) is likely to experience a decline in drug expenditure. This along with a shift from the previous biannual strategy to a decline in annual price is likely to impact the market growth. European spending, on the other hand is anticipated to rise by $51 billion3.

Pharmaceutical prices are rising globally, owing to inflationary trends on the cost of raw materials, active ingredients, and intermediates. Most developed markets recovered to pre-pandemic growth levels in CY2021 and the upswing is likely to continue until CY2026. Additionally, health-tech usage is likely to augment in CY2022 and thus drive the shift towards a technologically enabled ecosystem.

Key industrial trends

Advanced R&D: The world is undergoing a digital revolution and it is crucial to focus on the advancement of R&D. The digital technology is cost-effective and will significantly improve efficiency in R&D. Technological solution in R&D is likely to aid the pharma sector to refine various processes, such as production of affordable drugs, improved resource allocation, along with collection and efficient usage of health data.

Evolving business model: To keep up with the changing times and improve efficiency, businesses across geographies keep on evolving, with redesigned operations and business models. Moreover, adopting latest technology increases production volume and redefine business capacity.

Ensuring cyber security: Pharmaceutical and health care system is often privy to sensitive information. Thus, data collection and security are of critical importance. Resultantly, organisations have rapidly accustomed to data securing methods. Pharma industry have adopted numerous cyber security methods, that are aligned with international standards to prevent security threats to the companies and their customers.

Indian pharmaceuticals industry

The Indian pharmaceutical industry is expected to grow between a rate of 9% and 11% in 2021-22, with domestic and emerging markets driving growth in the next few quarters.4 India is the worlds top supplier of generic pharmaceuticals, third-largest in volume and 14th largest value producer of pharmaceuticals. The country caters to about half of the worlds vaccination demand, involving 40% of generic demand in the US, and 25% of all pharmaceuticals in the UK.

The Indian health-tech sector is likely to grow at CAGR of 39% from FY2020 to FY2023, reaching $50 billion by FY2033. Owing to government impetus, health-tech start-ups in diverse verticals, such as e-pharmacy, healthy lifestyle, and telemedicine have gained substantial momentum with growing investor interest.5

India is a large exporter of pharmaceuticals, and has pharma exports to over 200 nations. The country meets almost half of Africas need for generic drugs6. From FY2009 to FY2021, exports grew at a CAGR of 9%7.

The Indian pharmaceutical sector fosters a strong R&D and enables innovation, which drive faster product discovery and development. Pharmaceutical firms have successfully adopted digital technologies, such as artificial intelligence (AI) and big data to engage effectively with patients.

Key industrial trends

Rapid digitalisation: With the evolving times, the pharmaceutical sector lays its foundation on digitalisation, with the government facilitating a digital ecosystem and businesses widely adopting technology. Usage of technologies, such as AI and Machine Learning (ML) have significantly contributed towards the transformation of the sector8.

Digital data- The GOI used Aadhar card to provide COVID vaccination to the people. Furthermore, the method is adopted by several health care organisations to sync its patients medical history with Aadhar card. Digital data collection aided the companies to track data faster and utilise it to improve business models. This shift also offers an effective and transparent communication channel, spanning companies and departments8.

Improved national health policies- Under the national health mission, the government has launched various schemes, such as Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), Rashtriya Swasthya Bima Yojana, Ayushman Bharat Yojana and many more to improve Indian healthcare infrastructure. H 86,200 crore has been allocated to the Ministry of Health and Family Welfare (MoHFW) to drive growth in FY2023, which is 0.23% more than FY20238.

African pharmaceutical industry

By 2030, African pharmaceutical market is expected to reach between $56 billion and $70 billion. Africa provides pharmaceutical businesses substantial growth opportunities. Patients can access medicines, that were previously unavailable in the continent9. The South African pharmaceutical industry is the largest in the continent.

Although, Africa is home to a series of infectious diseases but the continent is rapidly adopting western lifestyle. This led to a paradigm shift, with illnesses inclining towards non-communicable diseases (NCDs), driving demand for chronic prescription drugs.

Growth opportunities

• Approximately 95% of the medicines consumed in Africa are imported, with the majority of the import going in South Africa and Morocco

• Africa accounts for nearly 25% of global vaccine demand while producing only 0.1% of the worlds vaccines.

• More than 75% of Africas pharmaceutical imports come from the European Union, India, and China.

• The African pharmaceuticals market is likely to be valued at $160.7 billion by 2024, creating tremendous business opportunity.

• The proportional contribution of NCDs to Africas healthcare burden is projected to rise by 21% by 2030. Governments and the general public have limited access to healthcare and pharmaceuticals products, which fuels growth opportunity.

Global malaria overview

A potentially fatal disease, Malaria is an acute febrile illness caused by Plasmodium parasites, which are spread to people through the bites of infected female Anopheles mosquitoes. Malaria is preventable and treatable. . Globally, an estimate of 1.7 billion malaria cases and 10.6 million malaria deaths were averted in the period between 2000 and 2020. About 241 million cases of malaria and 6,27, 000 deaths were reported globally in 2021.

Since 2000, malaria cases in the Western Pacific Region have been reduced 39% from 2.8 million to 1.7 million cases. However, progress has stalled. Between 2019 and 2020, cases in the region increased by an estimated 3,00, 000 from 1.4 million to 1.7 million. Papua, New Guinea, accounted for 86% of all cases in the Region in 2020.10

Malaria remains a significant public health and development challenge. In the last year, about 95% of the estimated 228 million cases occurred in the WHO/AFRO Region, along with 6,02,020 reported deaths. Despite some slowing of progress in reducing malaria cases and deaths, and the disruptions to health services caused by COVID-19, the world is still much further ahead than it was in 2000. 11Several antimalarial medicines with new modes of action are being developed for the treatment of uncomplicated as well as severe malaria. Ganaplacide-Lumefantrine, currently in a Phase- II clinical trial, is the first non-artemisinin combination therapy and could be an asset in the fight against emerging drug-resistant malaria in Africa.12>


• Vaccines – The malaria vaccines market has been growing given the growing incidences of malaria along with the presence of numerous companies that are introducing low profit margin vaccines across the world. Moreover, rising awareness related to the aftermaths of the disease, together with growing diagnosis and higher treatment rate are a few factors encouraging economic growth.

• Technology - The upsurge in technological advancements related to diagnostic tools with the increasing demand for treatment in ‘malaria-endemic countries is a driving opportunity for this market. The rising demand for diagnostic tools for malaria is one of the prime driving factors. Thus, rising disease incidence is anticipated to boost the market growth in futures.


• The biggest challenge faced by malaria-endemic countries in Africa is inadequate financing for malaria prevention and treatment services for people at risk of malaria. As a result, there are communities or populations that cannot access prevention measures or treatment when needed. In some parts of sub-Saharan Africa, mosquitoes that transmit malaria have become resistant to certain older insecticides.

• According the WHOs World Malaria Report, 2021, about 241 million cases of malaria and 6,27, 000 deaths were reported globally in 2020.

• Decline in vaccine funding could be a challenge for malaria control as it will affect the progression and updating of novel vaccines.

• Rising prices of the diagnostic tools of malaria could be a challenge for the consumers of developing countries like Africa and India.

Company overview

Started in 1984 with an aim to make healthcare accessible around the world, Bliss GVS Pharma Ltd (BGPL) is one of the fastest growing pharmaceutical companies. The Company is a world leader of Suppositories and Pessaries dosage forms with a strong portfolio of more than 250+ products. It has a strong presence in Sub-Saharan Africa and plans to expand in Latin America, Southeast Asia, Europe, and North America. The Company has five state-of-the-art manufacturing facilities which are WHO-GMP, EU-GMP, ISO 14001 and OHSAS 45001 compliant.

Over the years the Company has expanded to 64+ countries, with a significant expansion in research and development, manufacturing and marketing capabilities. The Company commands a leadership position in Sub-Saharan Africa in antimalarial, antifungal, dermatological and anti-inflammatory medicines.

Human resources management

The Company views its human capital as its most valuable asset, and seeks to establish a healthy and competitive work environment for them to succeed. It motivates its employees through a variety of skill-development and engagement activities.

The Company aims to find high-potential individuals and provide them with the greatest possible support for them to become leaders in their domains. It is committed to scale-up the development programmes through the launch of the ‘Young Leaders Development Programme. The YLDP is particularly created to identify and train talented individuals into leaders of tomorrow.

The Company provides a safe and conducive working environment for all its employees by ensuring environment-friendly working practices. It also conducts good industrial hygienic practices to prevent adverse health effects on employees..

Research and development

The Company continuously invests in R&D to enhance its innovation capabilities to serve the current and future needs of the customers. The R&D also provides technical support to the manufacturing facilities, with a focus on differentiated product development and bolstered operational efficiency. The R&D team members, with their expertise and experience, play a vital role in enhancing the Companys innovative capabilities which helps in maintaining a sustainable global growth.

The Department of Scientific and Industrial Research (DSIR) of the Government of India has approved the R&D Centre in Mumbai for following Good Laboratory Practices. The R&D facility is equipped with world-class state-of-the-art technologies like particle size analyser, gas chromatography, high-performance liquid chromatography, dissolution tester, stability chambers for all four zones, and Lab scale manufacturing machines for various oral solid dosage forms, suppository, and pessary.

Risk management

As per provisions of the Companies Act, 2013 and good corporate governance, the Company has laid down procedures to inform the Board about the risk assessment and minimisation procedures and the Board shall be responsible for framing, implementing and monitoring the risk management plans for the Company.

The aim is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business.

The Audit Committee of the Company has periodically reviewed the various risk associates with business of the Company. Such review includes risk identification, evaluation and mitigation of the risk.

Financial statement

During the financial year 2021-22, total revenue of the Company on standalone basis increased to I 63,635.67 Lakh against I 46,551.31 Lakh in the previous year. Profit Before Tax and Exceptional item is I 12,365.52 Lakh as against I 9,118.67 Lakh in the previous year. Profit After Tax is I 9,266.40 Lakh as against I 6,750.08 Lakh in the previous year.

Details of key ratios and significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations is given below:

Ratios For the year ended March 31, 2022 For the year ended March 31, 2021 % Variance Reason for Variance for more than 25%
Current Ratio 4.10 4.63 -11% -
Debt-Equity Ratio 0.10 0.12 -14% -
Interest Coverage Ratio 17.95 13.41 34% Increase is on account of increase in profitability
Debt Service Coverage Ratio 4.50 3.09 46% Increase is on account of increase in profitability
Return on Equity Ratio 0.12 0.09 23% -
Inventory Turnover Ratio 10.08 10.03 0% -
Trade Receivables turnover Ratio 1.68 1.24 36% The ratio has improved primarily due to effective collection of receivables, conservative credit policy even though revenue from operations has increased by 37% YoY.
Trade Payable turnover Ratio 4.61 3.75 23% -
Net Working Capital turnover Ratio 1.40 1.12 25% The ratio has improved primarily due to increase in sales by 37%
Operating Profit % 54% 54% -1% -
Net Profit % 14% 14% -1% -

Internal control systems and their adequacy

The Company has a robust Internal Financial Control system in place, commensurate with size, scale and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls, statutory compliances and other regulatory compliances.

During the year under review, no material or serious observation has been received from the internal auditors of the Company for inefficiency or inadequacy of such controls. The finance department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants, Statutory Auditors of the Company have monitored and evaluated the efficacy of Internal Financial Control system in the Company. It is in compliance with the operating system, accounting procedures and policies at all locations of the Company.

Based on the report of Internal Audit function, corrective actions in the respective area are undertaken and controls are strengthened. Significant audit observations, if any, and recommendations along with corrective action suggested thereon are presented to the Audit Committee of the Board. The Company follows all the applicable Indian Accounting Standards for properly maintaining the books of account and reporting financial statements.


The Company is confident of recording sustainable growth in the future with its strong R&D and manufacturing infrastructure. The capacity enhancement project in Vevoor and the new tablet packaging line will help in increasing operational efficiency. The Company has also stated its sales operation in Iraq and Canada .The Company is geared for expanding its market presence in other markets apart from Africa in the coming years. The constant focus on innovation and robust R&D capabilities also reiterates our position in the market. To capitalise on future opportunities, the Company continuously invests in enhancing the manufacturing and R&D capabilities. The Company is also taking steps to collaborate with many domestic and international market players to expand further.

Cautionary statement

Certain statements in the MDA section concerning future prospects may be forward-looking statements which involve a number of underlying identified / non identified risks and uncertainties that could cause actual results to differ materially. In addition to the foregoing changes in the macro-environment, a global pandemic may pose an unforeseen, unprecedented, unascertainable and constantly evolving risk(s), inter-alia, to the Company and the environment in which it operates. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based are also subject to change accordingly. These forward-looking statements represent only the Companys current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.