glenmark life sciences ltd share price Management discussions


Global Economy

The aftermath of the Ukraine conflict and the emergence of highly transmissible COVID-19 variants is still being felt in many economies over a year later. Furthermore, the tightening of global financial conditions is impeding the global economic recovery. Consequently, several economies are expected to witness a deceleration in income growth in 2023, accompanied by a rise in unemployment. Although central banks have raised interest rates to tackle inflation, the journey to achieve price stability may be prolonged. In the long run, the outlook for growth seems less promising than it has been for several decades.


According to the forecast, global consumer price index inflation is anticipated to decrease from 8.7% in 2022 to 7.0% in 2023. Disinflation is expected in all significant country groups, with around 76% of economies expected to witness a drop in headline inflation in 2023. However, the initial level of inflation is expected to persist. This disinflation is attributed to the decline in prices of fuel and non-fuel commodities, as well as the anticipated cooling effects of monetary tightening on economic activity. Nevertheless, inflation, excluding food and energy prices, is likely to drop more gradually worldwide in 2023, only by 0.2% point, to 6.2%, owing to the persistence of underlying inflation. In general, it is expected that most economies will require until 2025 to bring inflation back to target levels.


The growth rate of global trade volume is predicted to decrease from 5.1% in 2022 to 2.4% in 2023 due to a slowdown in global demand. Trade growth is expected to be further restrained by the impact of increasing trade barriers and the delayed consequences of US dollar appreciation in 2022. On the other hand, the decline in commodity prices, which had surged significantly in 2022, is projected to cause a gradual narrowing of global current account balances in 2023. However, the reopening of China economy is anticipated to reduce the risk of sudden supply chain disruptions and moderately boost global demand. The COVID-19 pandemic and postpandemic supply chain shortages have also taught valuable lessons on inventory management. As a result, oversupply is expected to be prevalent in 2023, given weakened demand, replenished inventories, increased capital expenditure, and normalised shipping conditions.


Central banks across the world have started using different tools to tame the ever-rising inflation. One of such widely used and effective monetary policy tool is increasing the interest rate to curb the money circulation. But this has brought to light vulnerability of certain segments of the banking systems in United States and various other regions across the world. These vulnerabilities are due to a combination of unrealised losses resulting from the rapid and significant tightening of monetary policy, as well as reliance on uninsured or wholesale funding. This, in turn, increases the likelihood of future shocks that could have a significant impact on the global economy. Therefore, central banks are walking a tight rope of taming the inflation but at the same time maintaining the financial stability of the banking system.


The global growth outlook has turned uncertain on the back of stubbornly high inflation, slow improvement in demand-supply scenario and uncertain outlook of the ongoing war. The turbulence in mid-sized banks in the United States and merger of two big banks in the Europe has further added to the list of factors impeding global growth. The global economic growth is expected to slow down from 3.4% in 2022 to 2.8% in 2023 with advance economies witnessing the highest deceleration from 2.7% growth in 2022 to 1.3% expected growth in 2023.

Global Economic Growth

Indian Economy

Driven by private consumption and investment, the Indian economy experienced robust growth in fiscal year 2022, albeit at a slower pace compared to the previous year. IndiaRss growth in fiscal year 2023 will be impacted by various factors such as ongoing global economic slowdown, tight monetary conditions, and elevated oil prices. However, on the positive side, supportive government policies, lower non-performing loans in banks, and significant corporate deleveraging will continue to support the economic growth.

The Indian governmentRss commitment to infrastructure development through the Gati Shakti initiative, logistics and industrial corridor development is expected to significantly boost industrial competitiveness and drive future growth. Private consumption is likely to grow with the improvement of labor market conditions and consumer confidence, as well as the central governmentRss decision to increase capital expenditure despite a lower targeted fiscal deficit.

The services sector is expected to recover strongly in FY23 and FY24, benefiting from the revival of tourism and other contact services, while weak global demand may dampen manufacturing growth in FY23. Recent measures to increase agricultural productivity, such as the implementation of digital services and support for agriculture start-ups, will be crucial in sustaining agriculture growth in the medium term.

Consumer price pressures eased in March. The CPI rose by 5.7% y/y, down from 6.4% in February, leaving inflation within the RBIRss target range of 2%-6%. Inflation is expected to cool further in the coming months as base effects kick in and demand slows. But adverse weather events and higher global oil prices present downside risks. Even though inflation has come down within RBIRss target range, the policy rates are expected to hold steady for the rest of the year.

The turmoil in the US and European banking sectors is unlikely to occur in India, where bank deposits are stickier and capital levels are healthy. Still, it has led to greater global financial market volatility and uncertainty that will be felt via weaker investment and external demand later in 2023 and 2024.


According to projections, the GDP growth in India is predicted to decline to 6.4% during FY23 due to a combination of factors such as the anticipated slowdown in the global economy, stringent monetary policies, and the continued high prices of oil. Despite these challenges, IndiaRss growth rate remains higher compared to other similar economies, mainly due to its sturdy domestic consumption and lower reliance on global demand. In the following fiscal year, growth is expected to recover to 6.7% as the industry picks up speed and private investment increases.

Glenmark Life Sciences Limited I 44


Global Pharma Industry

As the COVID-19 pandemic enters its fourth year, it has been the most significant global public health crisis in decades. Nevertheless, it has also highlighted the resilience of global health systems, which have promptly adapted to surges in demand and developed highly effective and safe vaccines and therapeutics at an unprecedented speed. The global vaccination program, which countries and industries have implemented, is unparalleled in terms of its speed and scope, reaching previously inaccessible low-income countries. While managing the pandemic in the endemic phase remains a challenge, other health concerns are also regaining attention. It is anticipated that the global usage and spending on medications will return to pre-pandemic growth rates by 2024, although the next two years are marked by important uncertainties regarding viral variants, COVID-19 vaccination rollout, underutilisation of booster shots, as well as economic uncertainties related to global inflation, geopolitical tensions, and climate change.

The global medicine market - using invoice price levels - is expected to grow at 3-6% CAGR through 2027 to about $1.9

• The worldwide pharmaceutical industry is anticipated to witness a CAGR of 3-6% until 2027, resulting in a market value of approximately $1.9 trillion, with varying patterns in different regions.

• Over the past ten years, medicine consumption has increased by 36% due to improved accessibility. However, the growth rate is predicted to decrease until 2027, and the total number of doses is expected to exceed 3.4 trillion, representing an increase of approximately 8% from 2022.

• The Asia-Pacific region, India, Latin America, Africa, the Middle East, and China are expected to experience the most significant growth in medicine consumption, primarily due to population expansion and enhanced accessibility. In contrast, North America, Europe, and Japan will encounter minimal growth.

• In 2027, specialty drugs are projected to make up roughly 43% of the worldwide pharmaceutical expenditure and 56% of the total expenditure in advanced markets.

• The global expenditure on cancer medications is anticipated to surpass $370 billion by 2027, as the introduction and utilisation of novel drugs accelerate, and the impact of new biosimilars remains restricted.

• By 2027, biotechnology-based drugs are expected to account for 35% of pharmaceutical expenditure worldwide, encompassing innovative cell and gene therapies, as well as a maturing biosimilar segment.

India is a key player in the global pharmaceutical industry, with drugs being exported to over 200 countries worldwide, and the US being a major market. The pharmaceutical sector contributes approximately 2 percent to IndiaRss GDP and 8 percent to the countryRss total merchandise exports, according to RBI.

India has the highest number of USFDA- compliant facilities outside of the United States.

As of August 2021, the USFDA had approved 741 facilities in India, and Indian companies had filed 4,346 ANDAs as of December 2020.

Over 55% of India exports go to heavily regulated markets, and the country is home to 8 out of 20 global generic companies. Additionally, India is a major supplier of vaccines, providing around 65-70% of the vaccines required by the World Health Organization (WHO).

The solid dose formulation segment currently holds a dominant position in the finished dose segment. This can be attributed to factors such as lower manufacturing costs, patient compliance, and ease of maintenance. India is also recognised as the world largest producer and exporter of generic drugs, with over 60,000 different generic brands produced across 60 therapeutic categories. This amounts to about 20% of the global supply of generic medications.


Government Support

Government incentives including an outlay of INR 21,940 Cr. for PLI 1.0 and PLI 2.0

Medical tourism

Quality services at marginal costs compared to US, Europe, and South Asia

Infrastructure development

India has the highest number of US-FDA compliant plants outside the US

Strong drug manufacturing

Expertise in low cost generic patented drugs as well as end-to-end manufacturing

Strong domestic demand

Launch of the largest National Health Protection Scheme globally

With the aim to contribute to the vision of a self-reliant India, the pharmaceutical industry is gearing up to establish India as the world hub for R&D, bio-innovation, and biomanu facturing. India infrastructure, workforce, scientific R&D, and manufacturing power make it capable of delivering universal health access. The budget announcement on pharmaceutical R&D comes at a time when India has played a vital role in supporting the world in combating the COVID- 19 crisis, developing a vaccine and supplying vaccines, medicines, and equipment to many countries in need. The Department of Pharmaceuticals implemented various programs and initiatives in 2022, including schemes such as Pradhan Mantri Bhartiya Janaushadhi Pariyojana and PLI scheme, with the objective of providing quality generic medicines at affordable prices and strengthening India manufacturing capacity in the pharmaceutical sector.

Source:; %20industry%20in%20India,served%20by%20Indian%20pharma%20exports.; PIB India & EY

The active pharmaceutical ingredients market on a global scale is projected to experience substantial expansion until 2026, driven by various factors such as the increase in the elderly population worldwide. Additionally, the growing awareness of APIs and their emerging therapeutic uses have led to a surge in their demand. The market growth is also expected to be propelled by the development of innovative and biotech APIs.

In 2020, the active pharmaceutical ingredients market had a global value of $185.72 billion, and it is projected to grow at a compound annual growth rate (CAGR) of 6.22%, reaching a value of $266.80 billion by 2026.

2020 2021 2022 2023 2024 2025 2026

H API Market Size

185.72 196.30 207.87 220.56 234.50 249.87 266.80

H Growth Rate

5.70% 5.89% 6.10% 6.32% 6.55% 6.78%

Source: Arizton

The oncology market is projected to experience a significant revenue boost, with estimates indicating a rise from $48.30 billion in 2020 to $75.61 billion by 2026, marking a (CAGR) of 7.75%. One of the primary drivers for this growth is the increasing incidence of cancer and various chronic diseases.

The cardiovascular market is anticipated to show the second-highest growth rate. The rising prevalence of heart disease and hypertension has fuelled market expansion, with revenue for this segment projected to increase from $28.62 billion in 2020 to $41.17 billion in 2026, at a (CAGR) of 6.24%.

The market for anti-infective APIs is expected to expand from $19.39 billion in 2020 to $26.51 billion in 2026, with a (CAGR) of 5.35%. These APIs are utilised in medications that prevent infections. Market growth has been propelled by an increase in lung infections caused by pollution and unhealthy lifestyles. Furthermore, the emergence of new drugs and a large patient population with prolonged treatment needs for viral infections are contributing to the growth of the antiinfective APIs market.

Central Nervous System (CNS) APIs are utilised in medications that address nervous system-related ailments, such as schizophrenia, and are only available via prescription. With increasing awareness and new diagnostic tools, the market is anticipated to witness growth.

The CNS APIs market is projected to grow from $17.77 billion in 2020 to $25.36 billion in 2026, at a (CAGR) of 6.11%. The market growth is expected to be driven by the rising demand for anti-psychotic products. Moreover, there is an increasing utilisation of anti-epileptic drugs in the CNS sector, which will create more opportunities for manufacturers.

The prevalence of respiratory illnesses has increased considerably, particularly in urban areas, due to rising pollution levels. The respiratory APIs market is expected to expand from $10.19 billion in 2020 to $14.14 billion in 2026, with a (CAGR) of 5.61%. Patients who have contracted COVID- 19 may experience long-lasting effects on their lungs.

The diabetes APIs market is projected to expand from $8.16 billion in 2020 to $11.25 billion in 2026, at a (CAGR) of 5.51%. Due to unhealthy lifestyles and a lack of awareness among the general population, the number of people with diabetes is rising and is expected to continue so. Inactivity and the excessive consumption of high-calorie foods only exacerbate the risk factors associated with diabetes.

The pain management segment is anticipated to expand from $4.29 billion in 2020 to $6.01 billion in 2026, at a (CAGR) of 5.76%. As the demand for fast-acting pain relief gels increases, companies in this sector are poised to experience growth.

Global Active Pharmaceutical Ingredients Market by Application 2020-2026 ($ billion)


2020 2026 CAGR


48.30 75.61 7.75%

Cardiovascular Disease

28.62 41.17 6.24%


19.39 26.51 5.35%


17.77 25.36 6.11%

Respiratory Diseases

10.19 14.14 5.61%


8.16 11.25 5.51%

Pain Management

4.29 6.01 5.76%

Source: Arizton

Global Active Pharmaceutical Ingredients Market by Application 2020—2026 ($ billion)

Global High Potency APIs or HPAPI Market

Highly Potent APIs (HPAPIs) are compounds that exhibit a biological response at very low doses. The market for these APIs is driven by several factors, including the rising demand for drugs, growing focus on precision medicine and high- potency APIs, and advancements in manufacturing technology. Additionally, the increasing incidence of cancer worldwide is boosting the demand for HPAPIs, thereby fuelling market growth.

Oncology-related conditions are a major application area for HPAPIs. As the global burden of cancer continues to rise, the production and consumption of HPAPIs are expected to

increase, thereby driving the market. For example, the International Agency for Research on Cancer (IARC) estimated in 2020 that one in five people worldwide will develop cancer during their lifetime, with lung and prostate cancer being more common in men and breast cancer more prevalent in women. This high disease prevalence globally is likely to have a positive impact on the HPAPI manufacturing and consumption, leading to market growth.

Furthermore, the market is expected to benefit from increasing technological innovations, product launches, and the establishment of new HPAPI manufacturing facilities.

India holds the third spot in the list of largest API producers globally, possessing an 8% share in the industry. More than 500 APIs are manufactured in the country, and it contributes 57% of APIs to the WHO prequalified list.

The API sector in India is now attracting many investors and venture capitalists due to the country strong domestic market, advanced chemical industry, highly skilled workforce, strict quality and manufacturing standards, and lower operating costs (roughly 40% less compared to Western countries) for building and running modern manufacturing plants, providing a competitive edge.

The increasing hostility between China and the Western countries has resulted in global pharma companies seeking to procure more from nations other than China. In this regard, India rise as a substitute supplier of bulk drugs has been impressive.


India is striving to create a comprehensive and enabling ecosystem to harness its API potential. To achieve this, the government authorised INR 6,940 crore for a production- linked incentive (PLI) scheme in 2020 to encourage the domestic manufacturing of Key Starting Materials (KSMs)/Drug Intermediaries (DIs) and APIs. The PLI scheme has already facilitated the production of 35 active pharmaceutical ingredients, which account for roughly 67% of APIs for which India has a 90% import dependence. The Department of Pharmaceuticals has also granted "inprinciple" approval to proposals from Himachal Pradesh, Gujarat, and Andhra Pradesh under the "Promotion of Bulk Drug Parks" initiative, which is critical in supporting bulk drug manufacturing in India. With a budget of INR 3,000 crore, this scheme provides financial assistance to these three states to build bulk drug parks and reduce the cost of producing bulk drugs by developing world-class shared infrastructure and increasing the competitiveness of the domestic bulk drug industry. Additionally, the Government of Assam has proposed a Pharmaceutical Park in Chaygaon, Kamrup Rural, with an estimated project cost of INR 153.64 crore on a land area of 100 acres.

In addition, to encourage innovation within the sector, several steps have been suggested, including increasing the cap for foreign direct investment (FDI), allowing up to 100% FDI through automatic routes for Greenfield pharmaceuticals projects, and introducing a new strategy to safeguard intellectual property rights.

Source: harnessing-indias-api-potential & EY

Global CDMO Industry

The global market for contract development and manufacturing organisations (CDMO) recorded a value of US $177.1 billion in 2020, primarily attributed to the efficient delivery of new and effective drugs in the market by streamlining the supply chain and enhancing the marketing capabilities of pharmaceutical firms. It is expected that the market will experience further growth during 2023-2028, growing at a CAGR of 8.4%. The market is anticipated to attain a value of US $302 billion by 2026. The integration of the company network is currently happening across three primary axes: expanding the capabilities along the value chains within a modality, extending to new modalities, and, in certain cases, expanding beyond the product offering focus to offer additional service categories such as clinical trial services. The emergence of new technologies presents an opportunity to revolutionise therapies and supply chains, particularly in the CDMO industry.

CDMOs are projected to play a significant role in driving innovation in the pharmaceutical industry. They are expected to continue being crucial partners for pharmaceutical companies and gain more prominence by enhancing their

technological proficiency and expertise across the value chain. As a result, CDMOs are anticipated to become even more significant contributors to innovation in the pharmaceutical industry.

Source: development-and-manufacturing-organization-cdmo-market,

EY_CDMO Market report & EY)


The global market for API CDMO is categorised into innovative and generics based on the type of drug. In 2020, the innovative segment held a significant market share of 74.6% and is expected to continue its dominance in the future.

The global API CDMO market is anticipated to expand from $81.6 billion in 2020 to $136.1 billion by 2028. During this period, the innovative segment is expected to grow at a CAGR of 6.0%, reaching $96.5 billion by 2028 from $60.9 billion in 2020. Meanwhile, the Generic API market is expected to grow at a faster pace, with a CAGR of 8.5%, expanding from $20.7 billion in 2020 to $39.6 billion in 2028.




At GLS, we built a portfolio of high value, non-commoditised APIs in chronic therapeutic areas, namely, Cardiovascular (CVS) disease, Central Nervous System (CNS) disorders, Pain Management, Oncology, Diabetes and Anti-infectives for our customers worldwide.

Some of these APIs such as Olmesartan, Telmisartan, Perindopril (anti-hypertensive), Atovaquone (anti-parasitic), Remogliflozin, Teneligliptin (diabetes), Zonisamide (CNS) and Adapalene (dermatology) have a significant and growing market share in major world markets.

Our API product portfolio spans multiple therapeutic areas such as gastro-intestinal disorders, anti-infectives and other therapeutic areas. A snapshot of key molecules classified by therapy areas is below.

Glenmark Life Sciences (GLS) is a professionally managed company with oversight by an experienced Board to chart an independent course for the growth of GLS. Our management team has demonstrated the ability to successfully build and integrate our businesses with various operating activities through their cumulative years of work experience. In particular, they have led the process through which we have created value through organic growth, built brand recognition and loyalty and identified new business opportunities. This has been achieved through a calibrated portfolio build-up which will commercialise within a window of 3-7 years, with a focus on:

We continue to add specialised and profitable products into our portfolio, including niche and technically complex molecules, such as Iron Sucrose, Sucralfate, Ferumoxytol, Ferric Carboxymaltose, Elagolix, Edoxaban, Solriamfetol and Isavuconazonium Sulfate as some examples.

Our total portfolio of 139 API molecules are sold in India and exported to multiple countries in Europe, North America, Latin America, Japan and the rest of the world ("ROW"). We had filed 468 Drug Master Files ("DMFs") and Certificates of suitability to the monographs of the European Pharmacopoeia ("CEPs") across various major markets (i.e. United States, Europe, Japan, Russia, Brazil, South Korea, Taiwan, Canada, China and Australia). We work with 20 largest generic companies globally.


In the last five years, we have developed business with innovator and specialty pharmaceutical companies in the area of CDMO.

Given our capabilities in process chemistry research, manufacturing and analytical research capabilities, we have the ability to attract innovator pharmaceutical companies to partner with us for providing unique solutions tailored to their specifications.

We provide lifecycle management solutions for their mature portfolio where genericisation has happened or is impending.

In our current portfolio of 139 molecules globally, many molecules offer such opportunities to a complete new set of customers.

In addition, we are focused on Specialty APIs as an important sub-segment of our CDMO business. Within our specialty API business, we offer customised support to pharmaceutical companies from making regulatory filings, providing research and technological support to manufacturing specialty APIs. As an API provider to such customers, we have helped create value through a blend of product customisation and regulatory strategy to allow market access.

We see the specialty business as a key growth opportunity and an added lever for our API market expansion, with multiple companies in the United States currently focused on developing 505(b)(2) products. In addition, the specialty business offers higher business stability (with improved margins) due to the complex nature of the products thereby leading to high customer stickiness.

Now that GLS operates independently, our business model as a standalone company generates a higher level of confidence with CDMO customers for building partnerships with GLS through technology transfer arrangements that involve sharing intellectual property (IP) for new API development.

Our process research, analytical research and chemistry capabilities enable CDMO services for a range of multinational corporations and specialty companies.

We believe that innovators prefer to select vendors with a strong track record. Our continuous focus on quality and on the sustainability of our operations make us a serious contender to grow this business opportunity.


Even after the world economy had multiple setbacks (COVID, energy, war, inflation, banking stress etc.) with a direct impact on our industry, GLS continues to experience robust demand for its APIs across most geographies albeit, with a need for competitive prices. This scenario opens-up an opportunity for high-quality APIs with affordable pricing in a large portion of our product portfolio. Our continuous focus on cost optimisation to become more efficient via next generation processes, improved manufacturing, solvent recovery, lower-cost energy and an overall savings effort to "do more with less" has helped us to deliver growth with sustainable margins.

Although this was always one of our business mantras, we applied an even greater focus to make a difference to the customers and patients we eventually serve. The multiple touch points of our strategy to fuel the growth, retain the margins while creating a sustainable platform to ensure business continuity are outlined here:

53 : Annual Report 2022-2023

Expand the existing business

• New product launches

• Geographical expansion in order to reduce our dependence on limited geographies

• Focus on new markets becoming more regulated. This initiative drives higher value by virtue of support to the customer throughout their development and commercialisation lifecycle

• Pursue 2nd source opportunities with top generic players in molecules where GLS holds a position of cost leadership

New business opportunities

• CDMO business expansion: with a plan to leverage a significant part of our existing portfolio for 505(b)(2) and lifecycle management projects

• Expand into complex API platforms e.g. Iron compounds and oncology molecules

Cross selling

With a large product basket, GLS has been strategically cross selling its existing products to existing customers in other geographies thereby increasing the wallet share of the customer

Operational efficiencies

Measures to reduce costs, improve efficiencies and reallocate resources to support identified growth opportunities in diverse markets

• Qualifying lower-cost processes for regulated markets

• Better recovery & recycling

• Backward integration of higher value KSMs (Key Starting Materials)

Sourcing initiatives

• Ongoing negotiations with vendors (basis market environment)

• Alternate vendor qualification

Operations initiatives

• Solvent recovery and recycling

• Optimisation of batch sizes

• Utilisation of new downstream equipment for filtration or drying techniques

• Yield improvement

• Automation for better efficiencies

• Green chemistry and effluent reduction


R&D Initiatives

• Productivity improvement of existing processes through constant optimisation

• Process cycle time reduction

We currently operate four multi-purpose manufacturing facilities which are located at Ankleshwar and Dahej in Gujarat and, Mohol and Kurkumbh in Maharashtra. Today our combined reactor capacity stands at an impressive 1,198 KL and we are poised for further expansion, projected to reach capacity of 1,400+ KL by FY24. This substantial increase will

empower us to produce all commercial Active Pharmaceutical Ingredients (APIs), annually achieving gross commercial-scale manufacturing tonnage totalling to approximately 750 metric tons.

Since 2015, our facilities have been subject to 41 inspections and audits by regulators which includes the USFDA, PMDA, COFEPRIS, Health Canada, MFDS (Korea), EDQM, ANVISA (Brazil), WHO and CDSCO conducted on a periodic basis.


• Brownfield expansion for the Generic API products at Dahej facility with 240 KL capacity completed

• Brownfield expansion at Dahej for the Oncology plant is completed. Out of the 2 independent modules, one module is 100% commissioned

• 192 KL out of the 400 KL intermediate manufacturing block at Ankleshwar commissioned.

• Environmental Clearance and CTE (Consent to Establish) received for the installation of 1,000 MT capacity for the planned greenfield site at Chincholi Industrial Area, Solapur

• Construction of the greenfield manufacturing facility at Chincholi to commence in FY24

The new API facility in Solapur has been planned to be built on a 40-acre footprint with a plan to manufacture both APIs and intermediates and will house several multi-purpose manufacturing blocks with mid to high-volume capacity. The new facility will also provide a platform for the growth of our CDMO business and add capacity for our generic API business.


We follow Quality Management Systems to build quality into the manufacturing and business processes which are aligned with the organisationRss focus on quality by design (QbD).

To further strengthen the QMS compliance,

• Training through ASPIRE system (electronic system to maintain training records) implemented

• Trackwise software for QMS like Change control, OOS, Complaints, Deviations etc. has been implemented

• For continuous quality data monitoring, Minitab software was procured and implemented in July 2022

Improvements related to plant infrastructure for refurbishment as well as storage facility expansion is planned.


FY23 saw a successful completion of 136 audits.

April 2022 to March 2023

Ankles war Completed Dahej Completed Mohol Completed Kurkumbh Completed Total

Customer audit

56 54 17 3 130

Regulatory audit

2 2 1 1 6


58 56 18 4 136


• With travel restrictions getting over post COVID, there is a renewed focus and increased frequency of inspections planned by agencies worldwide. The last inspection by USFDA was in July 2019 and an inspection this year can be expected

• Dahej site was recently inspected by ANVISA, Brazil and some key customers and the site was found to be in compliance Ankles war site was also recently inspected by WHO, COFEPRIS (Mexico) and CDSCO successfully


Our R&D laboratories focus on new product development and complex molecules, cost improvement programs, process improvements and oncology product development. To assist us with our R&D initiatives, we have established dedicated teams for new product development, complex products, oncology product development, technology transfer, life cycle management and project management.

We also engage in a thorough and systematic approach to product selection for our development grid, from a detailed commercial evaluation of the market opportunity of a particular API, its development complexity, intellectual property landscape and the potential competitive scenario. Our product and service line up together enable us to support our customers through all stages of the product lifecycle and be present across the value chain from product identification, R&D, impurity identification, methods development and controls, setting specifications and laboratory validation followed by technology transfer via pilot scale-up in the commercial plant. This is followed by plant validation enabling commercialisation and large-scale manufacturing.

Our capabilities and experience have helped us perform well in regulated markets and have enabled us to successfully

partner with customers, including offering our customers a first-mover advantage with respect to various products.

We regularly work on developing eight to ten molecules each year.


Our comprehensive approach while selecting products into our pipeline:

• MoleculesRs value and volume growth across markets namely, US, EU, JP, ROW, India, LATAM

• Near term prospects of the molecule in terms of patent expiration and novelty of the therapeutic area

• Capability to offer an edge in terms of speed, faster market entry and cost

• Special focus on NCE-1 projects

• Create high barriers by introducing routes that can be patent protected

Our portfolio comprises of 139 products, having launched 26 new APIs since 2019 (32 new products & 40 CIP products are under development pipeline including 3 iron complexes and 9 oncology products) ranging across various chronic therapy areas like cardiovascular, CNS, diabetes, anti-infectives and others. The total front-end addressable market size of GLSRs products globally was estimated to be around US $180 billion by 2026 with a growth rate of about 4.3% over the horizon. The future growth of these products is expected to remain stable driven by the rising prevalence of non-communicable diseases, growing demand from the regulated markets for drugs indicated for hypertension, diabetes and cancer, and an ageing population.

Front-end Addressable Market Size - GLS Molecules

US$ Billion

The market size in terms of volume for GLS APIs is estimated to be about 13,609 tonnes by 2026 at a growth rate of 6%.

Other core areas where GLS offers a competitive advantage are dedicated customer service for all geographies ensuring timely and adequate support that engages customers on a long-term basis.


GLS portfolio of 139 niche, highly profitable and technically complex products cater to large chronic therapy areas such as CNS, diabetes, CVS (including anti-thrombotic) and oncology.


Highlights of Profit and Loss Statement inr Million

FY2023 FY2022 YoY %

Total Income

21,902 21,379 2.4%

Gross Profit

11,471 10,803 6.2%


6,712 6,308 6.4%

Net Profit

4,670 4,187 11.5%

EPS (in INR)

38.11 35.63 7.0%


Our total income increased by 2.4% to INR 21,902 million for the financial year 2023 from INR 21,379 million for the financial year 2022, primarily due to strong growth momentum across regulated as well as emerging markets


Our finance costs decreased to INR 5 million for the financial year 2023 from INR 280 million for the financial year 2022 due to repayment of entire business purchase consideration relating to the spin-off.


Other expenses increased by 9.9% to INR 3,247 million for the financial year 2023 from INR 2,955 million for the

financial year 2022, primarily due to an increase in power, fuel and water charges by 14.5% to INR 1,156 million for the financial year 2023 from INR 1,009 million for the financial year 2022, an increase in Commission on sale by 129% to INR 205 million for the financial year 2023 from INR 90 million for the financial year 2022 and an increase in Repairs and Maintenance by 32% to INR 328 million for the financial year 2023 from INR 248 million for the financial year 2022.


R&D expenditures were INR 652 million at 2.8% of sales for FY23. (FY22 - INR 572 million at 2.7%)


Capital expenditures were INR 1,702 million for the FY23. (FY22 - INR 1,451 million)


Cash and cash equivalents were INR 2,838 million as on 31st March 2023. (31st March 2022 - INR 5,122 million)



31 March 2023 31 March 2022 % Variance

Current Ratio

3.67 4.60 -20.14%

Debt to Equity


Debt Service Coverage Ratio

NA 0.62 -100.00%

Return on Equity (ROE)

22.28% 29.83% -25.33%

Inventory Turnover Ratio

1.81 2.03 -10.83%

Trade Receivable Turnover Ratio

2.92 3.28 -11.09%

Trade Payable Turnover Ratio

3.13 3.95 -20.84%

Net Capital Turnover Ratio

1.61 1.54 4.69%

Net Profit Ratio

21.61% 19.72% 9.58%

Return on Capital Employed (ROCE)

29.09% 28.57% 1.83%


• Debt Service Coverage Ratio: The Company repaid the entire debt in the previous financial year 2021-22, hence debt service coverage ratio is not applicable for the current year

• Return on Equity (ROE): Lower due to higher base of shareholder equity on account of IPO

• Trade Payable Turnover Ratio: Lower due to favourable credit term from the suppliers as compared to previous year

Business Performance & Review

Business Segment Performance

FY23 FY22


93% 92%


7% 8%

Sale of Products

100% 100%

Internal Controls

In line with the requirements under the SEBI LODR, the Company has constituted a Risk Management Committee of the Directors. The Members of the Committee are Mr. T L Easwar, Mr. Sridhar Gorthi, Mr. V S Mani and Dr. Yasir Rawjee.

The Committee met twice in FY23 to discuss and evaluate risks associated with the business and the mitigation plans for the same.

The Company has adequate internal controls systems in place which provides reasonable assurance about the integrity and reliability of financial statements. Additionally, Shridhar & Associates, a leading audit firm performs periodic internal audits to provide reasonable assurance over internal control effectiveness and advises on industry-wide best practices.

The Audit Committee consisting of Independent Directors review important issues raised by the Internal and Statutory Auditors, thereby ensuring that risks are mitigated appropriately with necessary rectification measures on a periodic basis.

Risk Management

Principal Risk Factors and Uncertainties

Risk & its Definition

Mitigation Plan

Regulatory Risk

An adverse facility inspection by any regulator may cause restriction in sales to certain customers or respective geographies.

Supply Chain

The failure of a small number of single-source, third- party suppliers or service providers to fulfill their contractual obligations in a timely manner or as a result of regulatory non-compliance or physical disruption at their manufacturing sites may result in delays or service interruptions, which may materially and adversely affect the Companys revenues.

Market Risk

Market risks are the possibilities of losses because of price fluctuations, competitive scenario, geopolitical events, foreign exchange fluctuations, worldwide pandemics, and other events can all have an impact on market movements.

We have established systems to always monitor compliance. Our employees receive training on compliance updates for always confirming to them.

Where practical, dependencies on single sources of critical items are removed by developing alternative sources. In rare cases where dual sourcing is not possible, an inventory strategy has been developed to protect the supply chain from unanticipated disruptions.

The Company has initiated measures to reduce costs, improve efficiencies and reallocate resources to support identified growth opportunities in various markets. The Company is also continuously evaluating further strategic options to ensure the development of new capabilities and the ability to maximise the value of the Companys current and future portfolio.

The Company makes conscious efforts to launch new value- added products with some differentiation i.e. Improvised products which can fetch better pricing.

External uncertainties are carefully considered when developing strategy and reviewing performance. The Company has a board approved hedging policy in place to manage its currency risk exposure.

59 : Annual Report 2022-2023

Risk & its Definition

Mitigation Plan


The Companys operations subjects it to compliance ^ with a broad range of laws and regulatory controls on the development, manufacturing, testing, approval, distribution and marketing of its pharmaceutical products that affect not only the cost of product development but also the time required to reach the market and the uncertainty of successfully doing so. Additionally, the Company is also subjected to regulations with respect to listing of its shares on stock exchanges, financial reporting, and tax.

The Companys internal control framework is designed to help ensure we adhere to legal and regulatory requirements through continuous evaluation. We are in the process of further strengthening the framework to meet the evolving regulations.

The Board also evaluates on a periodic basis the compliance framework of the Company.

Environment, Health & Safety

The environmental laws of various jurisdictions impose actual and potential obligations on the Company to remediate contaminated sites.

Failure to manage properly the environmental risks could result in additional remedial costs that may materially and adversely affect the Companys financial results.

The Company operates rigorous procedures to seek to eliminate hazards where practicable and protect employees health and well-being.

The Companys continuing efforts to improve environmental sustainability have reduced the Companys water consumption, hazardous waste, and energy consumption. The Company actively manages our environmental remediation obligations to ensure practices are environmentally sustainable and compliant.

Information Technology & Cyber Security Risk

For its operations, the Company is heavily reliant on IT systems.

A failure of IT systems due to malicious attacks and/or non-compliance with data privacy laws can potentially lead to financial loss, business disruption and/or damage to our reputation.

The Company fosters a risk-aware culture that can anticipate and prevent attacks, and where necessary, effectively respond to security breaches, maintain strong cyber security infrastructure and compliance with data privacy law requirements through:

• Performing gap analysis to identify existing weaknesses

• Policy and procedure rollouts

• Creating awareness amongst employees on applicable privacy requirements

• Securing suitable insurance cover