India Gelatine Management Discussions


1) Global and Domestic Economic Overview

After the Covid years , the Indian economy is finally looking up!

The World Health Organization declared the Covid-19 pandemic was over and has to be treated as a routine illness/endemic.

On the financial front, sound macros, range-bound oil prices, healthy fiscal balance sheet and moderating inflation, are all positives. Even, valuations are comfortable at ~20x FY24 P/E (around its long period average) despite the market being at all-time high.

Given these parameters the market is expected to continue its up move and remain buoyant.

On the macro front CPI-inflation came in at a 25-month low in 4.3% YoY in May23, while IIP growth jumped sharply to 4.2% in Apr23 v/s 6.7% in Apr22 and 1.7% in Mar23. After the initial hiccup, even Monsoon is progressing well with rainfall deficiency falling to 10% by June end.

The Bovine Gelatine market is forecasted to grow by USD 1019.43 mn during 2022-2027, accelerating at a CAGR of 8.82% during the forecast period.

The overall Gelatine market is projected to grow from USD 3.7 billion in 2023 to USD 5.1 billion by 2028 growing at a CAGR of 6.6% during the forecast period.

Food and beverage manufacturers are using Gelatine in food products due to its functional properties like gelling, thickening, stabilizing, and other unique properties like enhancing food texture and taste.

The global empty capsules market was valued at US$2.1 Bn. in 2021 and the global market is expected to grow at a CAGR of 7.6% from 2022-2031. The global empty capsules market is anticipated to reach more than US$4.5 Bn. by the end of 2031

Demand of empty capsules and its associated products especially Gelatine capsule products is expected to increase significantly during the forecast period. Rise in commercialisation of Gelatine capsule based drug delivery systems is likely to drive the global empty capsules market. Surge in awareness about healthy lifestyle has increased the consumption of nutraceuticals in Gelatine capsule form. Nutraceutical applications of capsule dosage forms have evolved over the years due to its unique nutritional properties.

Growth in demand for immediate-release capsules among manufacturers for the production of various medicinal products such as anti-bacterial, antacids, dietary supplements, pain relievers and antibiotics is boosting the global market. Thus demand for empty hard Gelatine capsules is rising across the globe.

The global soft gel capsules market size is expected to grow from US$7.20 Bn. in 2022 to US$10.27 Bn. In 2027 at a CAGR of 7.3%.

Based on these figures and expected rise in sales, your company has a heightened focused on the export market. The results in FY 2022-23 have proven this was the way forward.

Sales from export of Gelatine stood at Rs 96,57,88,288 in the financial year 2022-23 from Rs 62,26,94,032 during financial year 2021-22. A whooping 55% increase in export sales.

Domestic sales of Gelatine were lower from Rs 42,83,90,638 in financial year 2021-22 to 17,09,21,487 during financial year 2022-23.

Ossein export sales rose exponentially by 144% from Rs 13,69,95,290 in financial year 2021-22 to Rs 33,40,92,232 during financial year 2022-23.

DCP sales rose by 30 % from 35,10,56,657 in the financial year 2021-22 to Rs 46,74,68,125 during financial year 2022-23.

Total sales from exports stood at Rs 1,30,27,41,021 in the financial year 2022-23 from Rs 76,13,88,354 during financial year 2021-22.



In terms of global market share, Indias specialty chemicals comprise approximately 4 per cent, while China accounts for 26 per cent. Indias specialty chemicals industry is predicted to grow rapidly, outpacing China, Japan and the rest of the world in percentage terms.

The industry dynamics have matured significantly over the last five years with strong growth catalysts in place like robust demand from end-user industries, competitive manufacturing costs and favourable government policies.

The specialty chemicals market has been growing exponentially, and the industry in India is projected to grow at a CAGR of more than 12 per cent from 2020 to 2025.

Given rising interest rates in the US and inflation hovering at 7 %, Indian markets with cheaper labour and energy costs are at an advantage and this has helped us in the Gelatine industry.

The emergence of the Indian specialty chemicals market which includes the market for Gelatine and Collagen Peptide has been driven by the countrys low-cost manufacturing capabilities, and abundant manpower.

There is a proposal at The World Organisation of Animal Health (WOAH) where bovine gelatine will be regarded as a safe trading commodity opening up Indian markets for pharma and food applications.

As the market evolves, factors such as investor confidence, corporate spending and budget allocation will play a crucial part. Focus on aspects such as research and development, capital investments, acquisitions, economies of scale, and expanding the domestic market will be of key importance to drive sustainable growth for the industry in India.


As pollution control regulations become harsher and labour costs escalate manufacturers are looking to diversify their production capabilities and India has to meet these global standards to survive.

Energy prices need to remain at a steady level in order to keep the production costs low and maintain the competitiveness of Gelatine with global prices.

On the environment front - Warm El Nino is expected to develop in the coming months, and this will combine with human-induced climate change to push global temperatures into unprecedented highs. This will have far-reaching repercussions for health, food security, water management and the environment. In India, while IMD have forecast a normal monsoon, Skymet have predicted a delayed, weaker monsoon (June has thus far been in large deficit).

In recent years there has been a rising trend in veganism across the world. These trends have also extended to the pharmaceutical industry, with capsule manufacturers offering the non-gelatine capsules from other than gelatine based raw materials. The increase in demand for non gelatine based pharmaceutical products and subsequent changes in the product portfolios by capsule manufacturers is anticipated to hamper the growth of the pharmaceutical gelatine market.


Gelatine exports during the year touched a record 55% increase. This was largely due to a change in customer base where exports witnessed a greater volume as opposed to the domestic market.

The company continuously focuses on areas of higher growth. The realizations for various gelatine products of the company find more favor as compared to sales in the domestic market and hence the impetus on the exports remains at the forefront.

During the year, Ossein exports also rose tremendously from the previous year, by 144% in value over the previous year. 2022-23 witnessed a monumental change as environmental awareness grew in leaps and bounds. Reduction of carbon emissions was the order of the day and major countries around the world supported the reduction in the use of coal for power and running of critical equipment. This led to some plants around the world, which were heavily relying on coal for their energy source to reduce production or shut down.

Since December 2021 the prices of DCP have recovered to more realistic levels sales rose by 30 % in 2023 after stagnation levels previously.

The sales of the companys B2C product "EverpureLife" Marine Collagen continues to rise, however, due to increased competition from other rivals it is having a limited growth rate for the moment. It is anticipated that as witnessed around the world the sales of this product too shall continue to grow to higher levels in future.

The impact of the Russia-Ukraine war has been felt by all countries around the world especially for those within Europe have been significantly larger. Raw material shortages and historic high prices for the pig skin (another raw material for Gelatine manufacture) Gelatine manufacturers in Europe and other parts of the world led to an increase in demand for the Indian manufactured ossein which saw renewed demand and thereby our company was able to supply larger volumes in comparison to the volumes supplied in the previous years.

DCP sales remained strong during the year .however, as the imports of MCP from China increasing in the recent months the prices for DCP are likely to remain under pressure. Although during the year 2022-23 the sales and realisations for DCP were at a higher level on account of lower input costs as well as due to reduced imports of MCP

Collagen sales continue to rise YOY as the beauty industry grows exponentially.

Skin care supplements are the rage, and anti-ageing additives are extremely popular. Collagen powders or ingestible collagen added to morning shakes and smoothies is the way to go. Collagen, one of the most abundant proteins found in our bodies, is often referred to as the bodys scaffolding. Without it, our skin starts to break down and sag. As we age, the collagen in our bodies decreases, thanks in part to factors like sun exposure and pollution.

Our brand "EverpureLife Marine Collagen" is growing at a steady pace amongst many competitors.


Gelatine, renowned for its unique amino acid arrangement, high glycine, proline, and alanine content, possesses extraordinary properties as a gelling agent, binder, emulsifier, and thickener. With diverse applications in the food industry, gelatine enhances flexibility, consistency, and strength in food products. It is extensively utilized in the sweet, marshmallow, and confectionery preparations, offering water-binding and jellying properties that cater to the rising demand for functional food.

With 50 years in this industry we have earned the recognition and respect of our peers, competitors and clients. Our products are world-class and export growth is a true barometer of this fact. We continue to strive in every department from quality control, R&D, environmental checks and HR systems to rise to new heights keeping the vision and ethos of our founders firmly in sight with an eye on innovation, technology and progress.


Any unfavorable government policy towards bovine products as well as stricter environmental laws could have significantly adverse impact on the production of Gelatine. Also, the rise in raw material costs and the role of geopolitics such as the Russia-Ukraine crisis can have an impact on exports and the supply chain for raw materials and availability and prices of sources of energy.

A shift toward plant- based products and veganism on the rise remains a major concern for the confectionary and candy industry which has been dominated for decades by gelatine-based products.

Globally the growth of HPMC- based capsules is rising as opposed to gelatine- based capsules, however, increasing costs of production and changing trends will be key deciders in the dominance of this segment.


The highlights of Financial Performance:

Sr. No.

Ratios 2022-2023

2021-2022 % Variance

1. Current Ratio#




2. Operating Profit margin%




3. Net Profit Margin%




4. Return on Net worth%




5. Inventory Turnover Ratio

4.94 Times

5.57 Times


6. Debtors Turnover Ratio

16.05 Times

15.26 Times


7. Debt Equity Ratio




8. Interest Coverage Ratio





# Change in Current Ratio due to current maturity of FCTL obtained during the year and also increase in trade payables as on 31/3/2023 as compared to last year.

% Last years profitability was adversely impacted due to steep rise in power and fuel cost and higher ETP related expenses.

Turnover increased 28 % to Rs 20,519.68 Lakhs during the year ended 31st March 2023 as compared to Rs 15,983.79 Lakhs during the previous year.

EBIDTA (Earnings before Interest, Depreciation, Taxes and Extra-Ordinary Item) for the Current year is Rs 3656.64 Lakhs as against Rs 1,113.51 Lakhs in the previous year.

Your directors recommended final dividend of @ 35% i.e. Rs 3.50 per share and on the occasion of Golden Jubilee year, additional special dividend @ 15% i.e. Rs 1.50 per share, aggregating to a total dividend @ 50% (i.e. Rs 5.00 per share) (previous year 25% i.e. Rs 2.50 per share) on Equity Shares of Rs 10/- each of the company for the year ended 31st March, 2023.


The Company recognizes the importance and contribution of its Human Resources towards its growth and development and is committed to the development of its people. The Company has implemented various methods and practices for Human Resources Development.

The Company has 114 Employees on its roll as on 31st March, 2023.


Statements in the Managements Discussion and Analysis describing the Companys projections, estimates, expectations or predictions may be "forward looking predictions" within the meaning of applicable securities laws and regulations. Actual results may differ from such estimates, projections, etc., whether expressed or implied. Factors, which would make a significant difference to the Companys operations, include achievement of better quality and good market price in domestic and overseas market, changes in Government regulations and tax laws, economic conditions affecting demand/ supplies and other environmental factors over which the Company does not have any control.