Granules India Ltd Management Discussions.

Company Overview

Granules India Limited (GIL) is a large-scale vertically integrated Pharmaceutical company founded in 1991 manufacturing Active Pharmaceutical Ingredients (API), Pharmaceutical Formulation Intermediates (PFI) and Finished Dosages (FD) products. We have Vast international reach and sell our products in global markets including United States of America, Canada, Latin America, Europe, Asia Pacific, and India.

Over the years, our focus has been mainly to convert our API and PFI centric business to an end to end integrated, predictable and sustainable producer of our own formulation products mainly for US market and create a sizeable basket of products in multiple therapeutic areas to establish the brand value of Granules as a sustainable formulation player. In our endeavour towards "empowering our future", our ESG priorities span a wide spectrum of actions. Our sustainability efforts include conforming to appropriate regulations and disclosures, reducing environmental footprint at our manufacturing locations, improving the supply chain predictability, ensuring the health and safety of our people, and driving product quality across the value chain. At Granules, we sincerely focus on manufacturing top tier pharmaceutical products using the wide array of resources available to us in the form of advanced technology, intellectual property, expert human capital and knowledge of regulations.

Global Economy

Global conditions were dire this year due to the health and economic crisis in the form of the COVID-19 pandemic. The global economy had to face numerous setbacks due to lockdown and containment measures to control the spread of the virus. Disruption in the global supply chain and regional production network resulted in significant social and economic costs across businesses and economies worldwide. Global Growth had contracted over -3.5% in 2020 and is the most unprecedented economic phenomenon of this century. While industrial production was disrupted by unscheduled and prolonged halts, the contact intensive sectors were disproportionately hit hard. An overwhelming burden of the fallout was borne by the less skilled workers, youth, women, small businesses, and low-income countries.

The policy makers across the globe responded with financial stimulus and innovative monetary policies to cushion the sinking economy of respective nations. The financial packages however differed across countries depending upon the economic strength.

The Indian economy also was stressed at the advent of the fiscal year, and further faced turmoil brought upon by the Covid-19 pandemic, resulting in a GDP contraction by approximately -7.3% in 2020. The prohibited movement and social distancing measures greatly affected economic activities which resulted in a slowdown in manufacturing sector, household consumption and increased unemployment rates. The people aggregating sectors such as travel and tourism, airlines were also severely affected, and operations were frozen till almost the second half of the fiscal year.


The successful and gradual deployment of vaccination and better-than-expected turnaround in later half of 2020, is encouraging. As per the World bank estimates, the world economy is set to grow at a rate of 5.6% in 2021. Although it has been a tough year, a majority of the economies across the world have shown a recovery in the second half of FY2020-21, and seem to be on a good trajectory. In the United States, faster vaccine rollout, substantially increased demand is expected to lead to a stronger recovery. The revival in growth in one of the most developed economies and the expected announcement of the new economic policy will also create positive spill overs in other economies, especially key trading partners like India.

Despite the challenges faced by majority of businesses in India, the economic recovery towards the latter-half of 2020 was particularly impressive. The successful implementation of vaccination drives in India is expected to further lead the recovery in 2021. As a result of the negative impact of the second wave; the real, inflation-adjusted GDP growth forecast has been lowered and is expected to be as low as 7.5% for 2021 although the Pharmaceutical sector is expected to grow at ~11% in the domestic market and ~16% in the export market

Global pharma industry

The Global Pharmaceuticals market is expected to reach a size of USD 1-1.3 trillion by 2030. The growing pharmaceutical industry may experience large impacts from the widely untapped emerging markets. They offer vast growth potential made visible through an increase in per capita use of medicine and growing consumer income medicine spending in these regions is expected to grow at five to eight percent through 2023. Therefore, the pharmaceutical industry has and will continue to have a significant economic impact on the global economy both in terms of the creation of contribution to GDP and employment.

Favourable long-term trends and the boost from pandemic- related spending give the outlook a positive bias amid robust sales growth and healthy profit margins. The credit outlook for the global pharmaceutical sector in 2022 remains stable if not slightly more positive than a year ago. The industry will continue to benefit from favourable demographic and lifestyle factors, innovations, and pandemic related opportunities as it is expected that the COVID-19 will need a long-term medical solution and will not go away abruptly.

Indian Pharma industry

The last two decades saw the Indian pharma industry growing at a compounded growth rate of ~11% in the domestic market and ~16% in the export market. The growth in the Indian pharma industry is mainly attributable to the growth in generics. With estimates that the Indian pharma industry supplies over 40% of the generics in the US and about 25% of the prescription drugs in the UK, India is one of the leading suppliers of pharmaceuticals in the world. The additional opportunities of catering to over 60% of the global vaccine demand will make India stronger as an exporter of Pharmaceutical products.

Domestic Market

The Indian domestic pharmaceutical market size has reached US$20.3b in 2019 with y-o-y growth of 9.8% (market size of US$18.12b in 2018). The sector has contributed immensely to Indias economic growth. It has been amongst one of the Top 10 sectors attracting FDI and in reducing trade deficit.

Export Market

Indian pharma exports reached US$20.7b in FY2017 with year-on-year growth of 8.4% (exports size was US$19.1b in 2019). They have grown at a CAGR of 6.2% between 2015 and 2020. This was largely driven by exports of generics drugs to >200 countries (including both developed and developing markets). India is the source of 60,000 generic brands across 60 therapeutic categories.

Over the next decade, the Indian pharma industry is expected to grow at a CAGR of ~12% to reach $130 billion by 2030 from $ 41.7 billion in 2020. Given this context, the key contributors for Indias growth in the industry would include Innovation and R&D, Healthcare Delivery, Manufacturing & Supply Chain and Market access. Apart from being acceptable in terms of quality and cost competitiveness, Indian pharma stands to gain from currency weakness. The demand for COVID-19 vaccine and other treatment will strengthen Indias position as a leading exporter in the future years.

Granules response to COVID-19

Granules has also faced similar challenges specially in managing the supply chain and other areas to counter the challenges of COVID-19. In order to secure its future and counter all COVID-19 related challenges, significant focus has been given in the following areas using Enterprise Risk Management approach:

i) Preparedness for Crisis management response

ii) People management and safety of the workforce and still ensuring almost uninterrupted production by innovative supervision and planning and thereby ensuring minimum human footprint within the factory.

iii) Focusing on employee benefits and added compensation to plant-level employees and contract employees ensuring the safety and medical comfort to the workforce and adhering to laid down government norms relating to social distancing

iv) Managing cybersecurity concerns while mainly allowing employees to work from remote locations.

v) Alternative vendor developments to de-risk the supply chain. This initiative will help the company in future days in coming out of single vendor dependency.

vi) Strategising Research and Development (R&D) activities despite interrupted availability of external testing agencies by interchanging geographies for R&D projects.

vii) Efficient cashflow management to respond to lower collections and financing vendors affected by the pandemic by arranging short term debt.

Direct impact of COVID-19 in Granules - Disruption of Operations

One of the major challenges faced by the Pharmaceuticals Industry was the COVID-19 pandemic, which resulted in major setbacks in the operations of various businesses. There was a huge global disruption in the supply of para-aminophenol, the key starting material for paracetamol. This was caused by a major manufacturer in China shutting down temporarily due to issues relating to pollution regulations. However, the situation is gradually improving with new capacities being brought up in India and with the Chinese company expected to resume production after shifting of operations to a new site soon.

Added Opportunities for Over the Counter (OTC) Drugs Market

The Global OTC Market is estimated at USD 361 Billion in 2020 and is expected to reach USD 539 Billion by 2025, growing at a CAGR of 8.35%.Due to the Covid-19 pandemic, there has been an increasing awareness in the self-treatment of minor ailments among the non-medical population. The lockdown measures and risk of getting infected further increases the need for gaining knowledge on OTC drugs so that treatment can be self-administered or by close persons with minimum consultations. Personalized medicine is on the rise along with the introduction of treatment protocols by many leading pharmaceutical players for the increasing number of chronic diseases. This has led to inspired efforts for developing remarkable new drug solutions and positively impacts the expansion of the OTC drugs market. In fact, the proper drug for the proper patient at the proper time is the mantra of personalized medicine. Granules is exploring strategies to increase its OTC business.

Company Overview and key facts

With a vision "to be the global leader in pharmaceutical manufacturing by process innovation and unparalleled efficiencies," the Company has worldwide services with over 300+ customers spanning 75+ countries. With exports comprising over 86% of total revenue, Granules today is a preferred partner for some of the worlds leading pharma branded and generics companies. It has one of the largest PFI and single site FD facilities in the world. It is also owning one of the Worlds largest Paracetamol API facilities.

Historically, Granules India was present in a business which was driven by volume-based products till a shift in the Companys vision for the future with a decision to enhance the product offerings with a differentiated product portfolio.

Working towards this strategy, we have invested into Research and Development (R&D) centre in Hyderabad and Virginia. Apart from the Multi API facility acquired earlier in Vizag (Unit 4), the company has also invested in Multi API facility in Vizag (Unit V) which includes High-potent facility. Unit 5 is a fully integrated facility which offers API (High-potent and general) and Finished Dosages in High-potent area.

It is operational and has received WHO GMP and EU GMP approval. While steps are being taken to get CMO operation done in the High-potent block to start monetising the asset, for the general API block, additional investments are being made to use at a scaled-up basis for the existing and new molecules. In order to strengthen our position in US market, the company has invested in development of generic products with varied complexities and filed several ANDAs with USFDA, with a thrust towards accelerated ANDA filing and launching of new products in US.

In order to strengthen the current strategy, Granules is focusing on moving towards manufacturing of more complex formulations through innovation. During the year, the company has initiated new finished dosage block for manufacturing of MUPS (Multi-unit pellet system) products in existing Gagillapur plant with an estimated capex of INR 240 Crs.

We have seven manufacturing facilities; six plants are located in India and one in the US.

Value chain Facility location Installed capacity
API Bonthapally 34,560 TPA
Jeedimetla 4,800 TPA
Vizag (Unit 4) Vizag (Unit 5) 290 KL
PFI Gagillapur 23,200 TPA
Jeedimetla 1,440 TPA
Finished Dosage Gagillapur 21.8 Bn
Virginia, USA 1.5 Bn
API Intermediates Bonthapally 61.5 KL

Short-term company strategy

1. Continue to attempt Cost leadership and operational efficiencies by integration, operational excellence, regulatory focus and added ESG focus for all molecules.

2. Increase the pace of own ANDA filing through accelerated R&D strategy and acquiring ANDAs and launch more products in the US market.

3. Exploring opportunities of expanding its existing and new products into new geographies to run its growth engine.

4. Looking for differentiated approaches to gain competitive advantage on existing products and finding out new areas of expansion to support its growth strategy.

5. Adopting forward looking demand planning to invest on facilities to cater to its growth story through internal accrual.

6. Leveraging Enterprise Risk Management approach to ensure that all the existing risks to the business are identified and mitigated through a project management approach and support the growth engine to become viable and predictable.

Long-term company strategy:

• Exploring dosages forms other than solid orals and capsules.

• Exploring opportunities of setting up front-end marketing in other geographies.

• Exploring new areas in pharmaceutical or adjacent fields through organic/inorganic approach to accelerate growth.

• Continuous improvement by process re-engineering, challenging supply chain and economics of scale.

• Continued cost and compliance focus and sustainability through ESG championing

US Business overview:

Granules Pharmaceuticals Inc., ("GPI")

Granules India established front end sales and marketing of prescription products in the US market under GPI label with a strategy of "control your own destiny". Since launch of its first product in June 2018, GPI launched several products over the last three years and became one of the key growth drivers for the company.

GPI sales and marketing team is supported by new product developments from both GIL R&D as well as GPI R&D. Since products manufactured at GPI facility are TAA compliant, GPI can also participate in US government business.

Granules USA, Inc., ("GUSA")

Granules India entered US market in 2003 by establishing GUSA as sales, marketing and distribution division for API, PFI and FD products in US market. GUSA setup helped the company to understand customer needs and communicate in real-time with customers based in US. Currently, GUSA sells products to some of the largest OTC and Rx customers in the US, including brand and generic customers.

GUSA sales team is supported by products from GIL from API, PFI and FD divisions.

Granules Consumer Health ("GCH")

Granules USA, Inc. established GCH in 2015 as its front end sales and marketing division for OTC products in the US market, with strategy to support private and home label customers for supplying OTC products. GCH division is expected to grow by adding new customers, offering new OTC products to customers, and streamlining supply chain for timely delivery of our products to customers.

Some of the OTC products made by GIL are marketed by GUSA to B2B customers, while GCH supply the same product to private label customers.

Levers for Empowering Our Future

Integrity and Ethical mindset

We do not compromise in adhering to all applicable laws and regulations to maintain the highest quality standards. We continuously train our employees to always ensure ethical business practice, being open and transparent in reporting and honour confidentiality wherever needed.

ESG focus to be sustainable and predictable as part of our orbit changing growth aspirations for a sustainable future

In our enhanced focus for making a sustainable growth, several phased initiatives through an inclusive stakeholder engagement have been embarked upon to develop a purposeful culture for ESG, articulate value propositions coming out of these efforts to embed sustainability into design as an integral part of doing business, continuous and effective communication with all stakeholders, investing in initiatives like zero liquid discharge as part of any ongoing and future capital projects.

Ensuring health and safety at workplace

We have always given high priority towards wellness at work by maintaining a safe work environment and promoting safety excellence at all our workplaces. Continuous training, investing in creating medical support system within the manufacturing facilities and inspiring employees to live a healthy lifestyle has been instrumental in building a sustainable safety culture in our workplaces.

Process innovation and manufacturing excellence

Granules India continues to focus on manufacturing excellence and process innovation to increase the volume of its existing molecules in India in order to optimally leverage the economies of scale and carefully choose high value and high growth products as its launch strategy in US.

Its persistent focus on process innovation has rightly made it as one of the leading manufacturers of high-volume pharmaceutical products in the world and making it ready for "empowering our future".

Business overview and key business segments

The Company is engaged in the manufacture of Active Pharmaceutical Ingredients ("API"), Pharmaceutical formulation intermediaries("PFI) and Finished dosage ("FD") and the same constitutes a single reportable business segment as per Ind AS 108.

Granules is a forward looking, R&D focussed, employee centric, stake holders focussed organisation and aspires to grow at a faster pace by empowering its future.

Building our own expertise is the primary objective of Granules India in delivering solutions to its esteemed global customers. The Companys offerings can be broadly classified into three categories cutting across API, PFI and FD.

Key Business Segments

Active Pharmaceutical Ingredients (APIs)

Granules is one of the most cost-effective and efficient manufacturers of APIs. It is one of the global leaders in the manufacturing of Paracetamol, Metformin, Guaifenesin, and Methocarbamol.

API manufacturing has been and will be a focus area for the company. We have added new products to our portfolio, including high-potent products, to expand our offering to customers. Most of the new PFI and FD products in our portfolio are supported by vertical integration of the respective APIs.

Use of advanced technology, a dedicated team, and a critical backward integration process, have cumulatively enabled Granules to consistently meet the customer demands with quality.

Pharmaceutical Formulation Intermediates (PFI)

Granules India Limited was a pioneer in breaking the early 1990s trend of inefficient PFI production and caused high operational costs to the clients. The Company today is one of the largest PFI producers of India and over time has been successful in building a batch processing capability of 6 tons. This has given the company a sustainable competitive edge in terms of economies of scale and a cost advantage to the company. Presently, the PFI business accounts for 19% of the Companys revenue.

One unique feature of the PFIs produced by Granules is that it can be directly taken to the hoppers from the drums. The Company through its PFI facilities at Jeedimetla and Gagillapur processes these intermediates to be compressed into Finished Dosage forms.

Advantages of Granules PFIs

Reduced development costs for customers:

Single vendor architecture for different processes and materials, used for manufacturing PFIs has resulted in substantial savings for Granules customers. It also helped us by simplifying the supply chain management process.

Lower testing costs:

In order to minimize the testing costs of the customers, the Company has taken the onus upon itself to deliver products of superior quality. Thus, allowing the customers to conduct lesser tests, this in turn saved substantial amount of testing costs for them.

Strong technical knowledge:

Leveraging more than two decades of its industry experience, Granules over the years has built up strong technical expertise and knowledge. This has not only helped the Company stay ahead of the curve but also helped gain its customer trust along with enabling its customers to save in terms of expenditure on pre-formulation studies and development processes.

Reduction of capital expenditure: Since setting up a PFI manufacturing facility requires incurring capital expenditure, by procuring the PFIs from Granules India, the customers can reduce their expenditure by a great extent.

Provide desired release properties: Customers get access to PFIs, which can be developed to provide release properties, similar to brand leaders. This makes it possible for Finished Dosage manufacturers to get favourable outcomes from their bioequivalence studies.

Finished Dosages (FD)

The formulations business contributes 52% to the Companys revenues. The Company manufactures caplets, tablets as well as press-fits capsules in bulk, blister packs and bottles. These products are manufactured in Gagillapur, which possesses an automated process, robust infrastructure and is marketed to over 75+ countries including developed markets such as the US and Europe. The Company further strengthened its competitive advantage by providing Bi-layered tablets, Rapid release tablets and Extended Release (ER) tablets. During the year, the Company filed 5 ANDAs, 2 EU dossiers, 3 products in Canada and 1 in South Africa and launched 12 products.

Granules India Limited received US FDA approval in FY21

• Potassium Chloride ER tablets (Klor-Con M), manufactured via MUPS (multi-unit pellet system) Technology.

• Metformin Hydrochloride Extended-Release Tablets USP, 500 mg and 1000 mg

• Potassium Chloride Extended-Release Capsules USP, 8 mEq (600 mg) and 10 mEq (750 mg).

• Acetaminophen, Aspirin and Caffeine Tablets USP, 250 mg/250 mg/65 mg (OTC).

• Naproxen Sodium and Diphenhydramine Hydrochloride Tablets, 220 mg/25 mg (OTC)

Granules Pharmaceuticals, Inc.

• Fully integrated infrastructure from R&D, manufacturing to sales and marketing enabling "Make in America" (TAA compliance for Govt. business).

• US FDA approved facility in Virginia with a team strength of 100+, 100,000 sqft facility with established R&D and Manufacturing capabilities with all necessary approvals for development and manufacturing of controlled substances.

• Balanced product portfolio, combination of internal capabilities and market dynamics.

• Strategic portfolio selection focusing on limited competition products across oral solids; tablets, capsules, oral solids and powder for oral solutions. Business to Consumer front end sales and marketing for Rx & OTC product.

Granules Pharmaceuticals, Inc. received US FDA approval in FY21

• Penicillamine Capsules USP, 250 mg

• Dexmethylphenidate HCl extended-release capsules

• Butalbital, Acetaminophen and Caffeine Capsules USP, 50 mg/300 mg/40 mg

• Trospium Chloride Extended-Release Capsules, 60 mg

• Vigabatrin for Oral Solution USP, 500 mg

• Ramelteon Tablets, 8 mg

Research and Development

From being known as a leading supplier of APIs and PFIs in bulk, we moved to become a leading manufacturer of finished dosage forms. 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, meeting 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 organisation. With innovation instilled in the culture of our company at various levels, 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. From a commercial perspective, our strategic product, process and market approach gives us a competitive advantage which will enable us to be an integrated player offering both drug substance and drug product.


As of 31 Mar 2021, we filed a Total 24(4 in FY 20-21) U.S. Drug Master Files (USDMF) across several therapeutic categories with the United States Food and Drug Administration (USFDA), 19 (3 in FY21) Certificates of Suitability (CEP) with the European Directorate for the Quality of Medicines (EDQM) and 7 European Drug Master Files (EDMF) , along with other regulatory filings in key regulated markets to support potential customers for ANDA and dossier filings. As part of our portfolio strategy of vertical integration, we intend to file ANDAs for several of these APIs to forward integrate into FDFs.

In finished dosage form, we filed 51 (5 in FY 21) ANDAs with the USFDA of which 40 ANDAs have been approved and 11 are under review. We aim to continue this momentum by continuing to identify, execute development, and file complex products within the oral immediate release, extended release, delayed release, MUPS, powders and suspensions dosages.

Over the last financial year (2020-21) Granules had filed 7 other DMFs (4 US DMFs and 3 CEPs) for APIs. Our formulation filings in FY 20-21 is 11 (5 US; 3 Canada; 2 Europe and 1 South Africa).

Granules received 14 ANDA approvals in the financial year FY2021. These on-time approvals exemplify quality of our ANDA filings. With further commitment and focus on R&D, we hope to increase the number of filings (API & Formulations) and approvals across the globe for the coming financial year as well.

We aim to continue this momentum by executing development of products from our pipeline of complex technology products within the immediate release, extended release, delayed release, MUPS (Multiple-Unit Pellet System), powders and suspensions dosages. We have also embarked upon our journey to build Granules intellectual property assets. Granules currently holds 8 Granted patents and 15 pending patent applications in active prosecution in various countries. In FY 2020-21, we filed 2 patent applications in India. These inventions were primarily directed towards new process for manufacturing intermediates and /or APIs, pharmaceutical composition thereof.

Way Forward

We will continue to leverage our knowledge and experience in our existing products and expand them into new markets and dosage forms. This would not only help us to bring economies of scale, but also, mitigate market concentration risk. Taking steps in this direction we have commissioned our Multi -API facility in Vishakhapatnam to support FD growth through backward integration. Constructions of MUPS block in existing Gagillapur facility will be completed in Q3FY22E. We filed dossiers for MUPS and received 2 approvals and are working to file additional dossiers in the coming year. We will continue to identify and develop complex products with limited competition in the USA, and continuously bring process efficiencies for our existing products to have a competitive advantage in the market. We look forward to maintaining 20%+ of PAT growth on a base of FY2021 for next 3 years. We anticipate the need for extra capacity to fuel our growth beyond FY2024 to meet this anticipated demand GIL acquired new site at Genome Valley, Hyderabad and plans to construct facilities for solid oral dosages and other dosage forms. We will continue making considerable progress in building our technical capabilities within the all these dosage forms, including high-potent products, and ensure process development, validations, and furthermore regulatory filings for sustainable growth momentum to continue.

Operational Excellence

Granules initiated a structured Operational Excellence (OE) program three years back to build capability and culture of continuous improvement by involvement employees across functions and levels. A 4-tier role based OE capability training is being rolled out through White Belt, Yellow Belt, Green Belt, and Black Training for our employees. It is application oriented approach wherein every OE Belt certification includes training participation, Online test for Body of Knowledge and a successful implementation of a kaizen/project. Based on their role, employees took simple kaizen improvement to complex problem-solving using OE tools. Our leadership team also visited a few companies with matured OE program to learn the concepts and understand associated implementation challenges. The benefits from such project were in the area of Capacity enhancement, Cost reduction and Yield improvement resulting in annualized financial benefits of more than INR 10 Crores per annum.

In addition, the OE initiative is helping us to build leadership capabilities like problem solving, communication, influencing, and strategic thinking. Such improvement projects are now being presented in National forums like CII Kaizen Competition and won accolades. Our OE program is designed in line with companys mission of "Efficient Manufacturing".

Enterprise Risk Management

The company has adopted Enterprise wide Risk Management (ERM) framework to identify, prioritise and monitor top rated business risks. Based on interviews with the key business stake holders, leveraging internal knowledge repository and using industry benchmark data related to the similar risks, top 18 high risks of the company have been highlighted. The internal Risk committee as created by Board will evaluate, manage and monitor major risks of the company on an ongoing basis. The risk committee also evaluates the residual risk and the strategic risk that the company must live with given its risk appetite. The company has defined a process through which it monitors its present risk profile and risk appetite to re-prioritise some of the risks as part of a long-term risk mitigation plan.

Some high impact risk which, if not mitigated, can affect the business severely. The Board Committee has gone through each of the risks individually and will be looking for quarterly status update of the projects that are undertaken/ to be undertaken to mitigate these risks. The all-important point is to start / monitor risk mitigating projects and offer the status report for each project to the Internal Risk Committee once in a month and the Board Risk Committee once in a quarter.

Some of the basic details that will be eventually tracked through the Software are:

• Project Milestones and key deliverables with time duration

• Project Budget spending pattern over the project duration

• Sequence of activities - is there any interdependencies of activities - whether the same can be done in parallel

• Project status - on time or running overtime etc.

Human Capital

At Granules India, we believe that people who feel truly associated with the organisation 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 a sense of belonging. This year we launched Granules Learning Academy concept that includes Training of Grass-Root employees on Fundamentals of Unit of Operation, in Manufacturing & QC. Role based training pertaining to guidelines and standards is being initiated for managers engaged in pharmaceutical manufacturing. Our new Performance Management System connects companys objectives with the Unit as well as individual employees goals up to managerial level through rigorous review process. This enables our employees to work on stretched targets while meeting companys objectives.

Four years back, Granules has undertaken a Self-Directed Teams (SDTs) initiative to provide a livelihood opportunity for young 10+2 students from the rural areas of Telangana and Andhra Pradesh through Learn & Earn model. They are being recruited through a structured but rigorous selection process after which they undergo a two-month Pharmaceutical Manufacturing Training and an additional two month On the Job Training. This program is now Granules engine for deployment of grass-root level employees in our manufacturing units across various functions. The Companys total employee strength as on March 31,2021 stood at 3,369.

Last year was also different as the entire world was battling COVID 19 pandemic. We being in essential services sector, the responsibility of ensuring smooth operation while following COVID Appropriate Behaviours including Mask-On, Sanitisation and Social Distancing was implemented in all our units. Our HR Team ensured that all the required measures are taken round the clock to help employees through Testing, Tracing, Isolation, Medication, Counselling and few Hospitalisation during this difficult times.

Environmental, Social & Governance

Our Environmental, Social & Governance (ESG) philosophy at Granules has been steered by a long-term strategic plan with a continuous focus on responsible and sustainable business based on the National Voluntary Guidelines (NVG) principles.

Our Sustainable growth strategy is to ensure complete justice to the environmental, social and financial aspects through a transparency leading to sustainable growth, integrity in dealing with internal and external stakeholders, being accountable for what we do and delivery supported by a highly competent and diversified leadership with talent at all levels with empowered employees to enable high performance. Our compliance and risk management fully adheres to all regulatory and statutory requirements and our environment consciousness and commitment towards efficient operations has resulted in a reduced environmental footprint.

We have undertaken several activities towards Corporate Social Responsibility like Skill development activity, Preventive healthcare & Sanitation, Disaster management and Ex-gratia COVID allowance to the workers of the Company through our CSR activities apart from various Sustainability measures as detailed in our Business Responsibility Report.

A focused ESG action plan has been designed with the creation of a sustainability team with a ESG blueprint commencing with the stakeholder identification, materiality mapping and ESG Assessment to define the road map to a sustainable future.

Key highlights 2020-21

Consolidated Income statement

Particulars 2021 % 2020 % Growth %
Revenue 323,754.28 259,864.65 24.6%
EBITDA 85,522.90 26.4% 52,531.83 20.2% 62.8%
PAT 54,945.90 17.0% 33,539.83 12.9% 63.8%
EPS 22.05 13.19

Profit and Loss Account

Revenue from operations Revenue was driven by double-digit growth. Primary growth is driven by PFIs and Finished dosages and the new launches and increase in market penetration of existing products. During the year, some of the customers moved up the value chain from APIs to PFIs and Finished Dosages, which Granules expects will continue.


The company improved its EBITDA margin 620 bps over the prior year. The Company was able to improve EBITDA on account of higher volumes and new launches. Our operational efficiencies, in combination with our added capacities, have increased our FD volumes by nearly 50% which translated into higher EBITDA. In addition to this, our focus on our product rationalization based on profitability enabled us to achieve this growth


The Board proposed a 75% dividend for 2020-21 to be approved by the shareholders at the ensuing Annual General Meeting in addition to interim dividend of 75% paid during the year.

Consolidate Cash Flow

(Rs. in lakhs)
Particulars 2021 2020
Opening Cash and Cash equivalents 18,592.89 8,302.43
Cash flow from
Operating activities 43,247.78 47,618.84
Investing activities (27,713.50) (16,063.31)
Financing activities (29,931.31) (21,285.50)
Effect of exchange rate changes (12.27) 20.43
Closing cash and cash equivalents 4,183.59 18,592.89

Balance Sheet

Shareholders Funds Shareholders funds increased 17.9% over the previous year due to an increase in the reserves and surplus balance.

Loan Funds decreased while the sales have been increased, due to effective management of working capital. While debt reduced, the Companys net debt to equity ratio of 0.3x which is healthy.


(Rs. in lakhs)
Particulars As on 31st March 2021 As on 31st March 2020 Change
Total Shareholders Equity 217,327.43 184,372.41 32,955.02
Long-term debt (current portion) 9,537.35 9,713.72 (176.37)
Long-term debt (non-current portion) 33,380.74 41,483.28 (8,102.54)
Short-term borrowings 40,927.05 37,169.09 3,757.96
Total Debt 83,845.14 88,366.09 (4,520.95)

Quality and Compliance

Granules India Limited always believed in quality of products and patient safety. This is being achieved through the implementation of best quality systems, creating a right quality culture and continuous training of employees. We always had a vision to be ahead of the curve in business and are investing significantly in the digitalisation program of the key quality systems like Laboratory Information Management Systems (LIMS), Quality Assurance Management Systems (QAMS), Learning Management System (LMS), SAP enhancements on a continuous basis to strengthen further. We continue to sustain a very high level of transparency with our customers, regulators, statutory bodies, and employees. Our accreditations include the regulatory approvals from USFDA, MHRA, TGA, Infarmed, Health Canada, Cofepris, WHO, KFDA, Taiwan FDA, MCC and Halal.

We have made significant progress in our aggressive plans for expanding our quality function including investments in the laboratories and newer analytical capabilities and technologies. We have expanded our QC laboratory capacity significantly through additional investments in infrastructure, skilled manpower and additional laboratory instrumentation. New capabilities like the LCMS, GCMS, AAS are built during the period to cater to the various regulatory requirements and enhance quality by design. There is an intensive focus on the enhancements of Quality Metrics and reduction of Cost of Poor Quality. Several initiatives of Skill development through Granules Learning Academy are implemented during the period as a part of our commitment for Employee development.

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 unauthorised use or losses. The audit committee supervises all aspects of internal functioning and advises corrective action as and when required.


Cautionary Statements

Certain statements in the Management Discussion and Analysis, describing the Companys objectives, and predictions may be forward-looking statements, within the meaning of applicable laws and regulations. Actual results may vary significantly from forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India.