Financial Overview:
The financial performance of the Company for the financial year ended 31st
March, 2021, is as follows: Total revenue from operations stood at Rs.230.67 Crores for
the year ended 31st March, 2021, as against Rs. 201.59 Crores for the
corresponding previous period, an increase of 14.43 %.
The cost of raw materials incurred for the financial year ended 31st March,
2021 was Rs. 78.21 Crores as against Rs. 63.18 Crores for the corresponding previous
period. Raw material expenditure increased due to change in business model. In the
contract manufacturing model, the direct raw materials were supplied by the partner. After
shift to the manufacture and sales model, the Company started procuring raw materials
directly.
The EBIDTA (earnings before interest, depreciation and tax, excluding other income) was
Rs. 49.88 Crore for the year ended 31st March, 2021, as against Rs. 35.68 Crore
for the corresponding previous period, an increase of 39.80%.
The finance cost for the financial year ended 31st March, 2021 was Rs. 12.71
Crore as against Rs. 12.88 Crore for the corresponding previous period. The PAT (profit
after tax) was Rs. 26.62 Crores for the year ended 31st March, 2021, as against
Rs. 15.91 Crores for the corresponding previous period, an increase of 67.30 %.
Resources and Liquidity:
The cash and cash equivalents at the end of 31st March, 2021 were Rs. 19.00
Crore. The net debt to equity ratio of the Company stood at 0.57: 1 as on 31st
March, 2021.
Business category wise performance:
The Company operates in one segment i.e. pharmaceuticals. The results of the Company
under review depict business growth during the period. The Company is presently
manufacturing of pharmaceutical products, especially in Formulation and API activity.
Risk & Concerns:
The business of the Company is exposed to few risks. Risks, liabilities and losses are
part and parcel of any industry and need to be tackled through well forecasted strategies
and actions.
Unfavorable Policy Changes
In the past few years, the Government of India has made frequent changes in the drug
pricing and other laws impacting the operations of the Company. Further adverse changes in
government policies with respect to essential medicines and pricing with respect to the
products may reduce margins of the Company. The Government policies are creating new risks
for domestic market by including new molecules to the price control umbrella and also by
issuing ban on various Fixed Dose Combinations.
Credit Risk
To manage its credit exposure, the Company has determined a credit policy with credit
limit requests and approval procedures. The Company does its own research of a
counterpartys financial health and business prospects. Timely and rigorous process is
followed up with clients for payments as per schedule. The Company has suitably
streamlined the process to develop a focused and aggressive receivables management system
to ensure timely collections.
Interest Rate Risk
The Company has judiciously managed the debt- equity ratio. It has been using a mix of
loans and internal cash accruals. The Company has well managed the working capital to
maintain the overall interest cost at reasonable levels.
Competition Risk
Like in most other industries, growth opportunities lead to a rise in competition. We
face different levels of competition, from domestic as well as multinational companies.
The Company has created strong differentiators in execution, quality and delivery which
make it resilient to competition. Furthermore, the Company continues to invest in R&D
and its people to maintain a competitive edge. A stable and growing client base further
helps maintain a strong order book and insulate the Company from this risk. We also
mitigate this risk with the quality of our infrastructure and specialized formulation
methodologies, coupled with prudent financial and human resources management and better
control over costs.
Input Cost Risk
Our profitability and cost effectiveness may be affected due to change in the prices of
raw materials, power and other input costs.
Opportunities Growth in Pharma Sector
The Indian pharmaceutical industry is well- positioned to reinforce its position as a
global pharmaceutical provider. As per industry estimates, Indias Pharmaceutical Industry
is expected to have expanded at a CAGR of 12.89% over 2015-20 to reach USD 55 billion and
by 2025 is forecast to grow to USD 100 billion. With rising income levels, growing health
awareness and better access to healthcare, emerging markets like the one in
India offer significant growth potential for the pharmaceutical industry.
With the outbreak of the COVID-19 pandemic, healthcare has come even more to the
forefront for the masses across the world. With increased awareness and concern for health
and well-being, demand for pharmaceutical products has grown significantly over the last
year.
The pharma business related with basic human needs and introduction of innovative and
cost- effective medicines enjoys maximum opportunities in a densely populated country like
India, where there is substantial untapped potential for growth.
Government Initiatives
Favourable schemes made by the Government of India to support and grow the Pharma
sector bode well for companies operating in this industry.
Threats
Threat from Substitute Products
Availability of sub-standard and substitute products in the market, and fierce
competition are major threats to the business stability for a small size Company like
ours. However, the Management is taking all necessary steps and continuously adopting
strategies not only to stand in the market but to perform impressively under the current
scenario.
The Company is fully aware of its capabilities and strengths and is going ahead with
its strategy of collaborating with Pharmaceutical majors.
Threat from Global Competitors
Indian Pharma Companies will face competition from bigger, Global pharma companies,
backed by huge financial muscle. Generic drugs offer cost-effective alternatives to drugs
innovators and significant savings to customers.
Threat from Impact of COVID-19 While the pandemic has spurred demand for pharma
products in India and globally, the lockdowns to contain the virus have also hampered
production and logistics operations to some extent, and it is expected that the first half
of FY22 to be challenging in these aspects as well.
Internal control system and adequacy:
The Company ensures the orderly and efficient conduct of its business, including
adherence to Companys policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
The Statutory Auditors while conducting the statutory audit, review and evaluate the
internal controls and their observations are discussed with the Audit Committee of the
Board. Other statutory requirements especially, in respect of pharmaceutical business are
also vigorously followed in order to have better internal controls over the affairs of the
Company.
Outlook:
The API market is witnessing a steady growth in terms of volumes and value worldwide.
As per industry forecasts, the global API market is expected to expand to USD 248.3
billion by 2025, from USD 187 billion in 2020, at a CAGR of 5.8%. Growth is expected to be
driven by factors such as rising drug R&D, increasing incidence of chronic diseases,
rising importance of generics and higher uptake of biopharmaceuticals. The COVID-19
pandemic has expedited this growth by bringing pharma R&D and manufacturing to the
forefront.
The Company is in the process of identifying products which have good domestic and
export potential. The Company also has plans to establish a new R&D lab to take care
of technological developments for new products that are being identified for global
markets.
With its R&D and manufacturing capacities in place, the Company is in a good
position to capitalize on the significant growth opportunities in this sector going
forward.
OPERATIONAL OVERVIEW:
The Company constantly reviews its product market portfolio with the view to sustain
its growth. The Company has driven fiscal growth by focusing on the following areas.
(a) Industry structure and developments:
The Indian economy suffered headwinds from the COVID-19 pandemic during the last year
much like every other nation across the world. With almost all major industries impacted
by the lockdown to curb the virus, overall output reduced during the last year, and growth
forecasts were reduced. However, as the economy reopens and vaccination drives increase,
growth projections are looking upwards again, despite being lower than what was forecasted
pre-COVID.
The World Bank revised its forecast for growth in the Indian economy by 2.9 percentage
points to 8.3% in 2021-22, and 7.5% in 2022-23. This is after a contraction of about 7.3%
in 2020.
India enjoys an important position in the global pharmaceuticals sector. The country
also has a large pool of scientists and engineers who have the strong potential to steer
the industry ahead to an even higher level. Indian pharmaceutical sector industry supplies
over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in
the US and 25 per cent of all medicines in UK. Indias share of vaccine exports increased
since the onset of the pandemic, as our country has been one of the key exporters of the
vaccine to several nations. Going forward, better growth in domestic sales would also
depend on the ability of companies to align their product portfolio towards chronic
diseases.
The Indian Government has taken many steps to reduce costs and bring down healthcare
expenses. In addition, the thrust on rural health programs, lifesaving drugs and
preventive vaccines also augurs well for the pharmaceutical companies. The Industry,
consisting of domestic and foreign players, is witnessing increased spends on R&D
initiatives focusing on expanding traditional generic portfolios.
(b) Government Initiatives for Pharmaceuticals Industry:
Government Support for Indian Pharma Sector
The Government of India has drawn several schemes and policies over the recent past to
support and grow the pharmaceutical industry in the country.
The Government has approved production linked incentives (PLI) of up to Rs. 6,940
Crores for promotion of domestic manufacturing of critical Key Starting Materials
(KSMs)/Drug Intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) in India.
These include many fermentation based KSMs, DIs and APIs.
In the Budget 2021, the Government gave a 200% boost to the pharma sector, with aims to
reduce our dependence on China for raw materials, etc. The 2021 budget set aside Rs.
124.42 Crores for initiatives for the development of the pharmaceutical industry, as
compared with an allocation of Rs. 42.05 Crores in the previous budget.
The Union Cabinet also gave its nod for the amendment of the existing Foreign Direct
Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per
cent under the automatic route for manufacturing of medical devices subject to certain
conditions. Moreover, under Budget 2020-21, allocation to the Ministry of Health and
Family Welfare is Rs.65,012 Crore (US$ 9.30 billion). The Government allocated Rs.34,115
Crore (US$ 4.88 billion) towards the National Health Mission under which rural and urban
people will benefit.
In FY. 2019, Rs. 6,400 Crore (US$ 915.72 million) was allocated to health insurance
scheme Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB PMJAY). The National Health
Protection Scheme is largest government funded healthcare program in the world, which is
expected to benefit 100 million poor families in the country by providing a cover of up to
Rs 5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care
hospitalisation.
The Government of India is also planning to set up an electronic platform to regulate
online pharmacies under a new policy, in order to stop any misuse due to easy
availability. Approval time for new facilities has also been reduced to boost investments.
Furthermore, the Government has introduced mechanisms such as the Drug Price Control
Order and the National Pharmaceutical Pricing Authority to deal with the issue of
affordability and availability of medicines.
Companys Strategy
The Company is finding new avenues by expanding its existing production capacity.
The Company is fully aware of its capabilities and strengths and is going ahead with
hand holding strategy with Pharmaceutical majors.
(c) Segment-wise or product-wise performance:
The Company operates in single segment i.e., pharmaceuticals. The results of the
Company under review depict business growth during the period.
(g) Discussion on financial performance with respect to operational Performance:
The operational performance during the year under review was one of the best in recent
past.
The Net Profit after Tax increased by 67.30% compared to previous year. The production
capacity was utilized to the maximum level during the year. Your Company has generated
profit during the year under review as well as in the previous year.
(h) Material developments in Human Resources/Industrial Relations front, including
number of people employed:
The core of the Human Resource philosophy at Themis Medicare Limited is empowering
human resources towards achievement of company aspirations. Your Company has a diverse mix
of youth and experience which nurtures the business. As on 31st March, 2021 the total
employee strength was 890.
(i) Details of significant changes in key financial ratios (i.e. change of 25% or more
as compared to the immediately previous financial year):
| Sr.No |
Particulars |
2020-21 |
2019-20 |
| 1 |
Debtors Turnover ( in days) |
123 days |
187 days |
| 2 |
Inventory Turnover (in days) |
273 days |
314 days |
| 3 |
Interest Coverage Ratio |
3.94 : 1 |
2.63 : 1 |
| 4 |
Current Ratio |
2.20 : 1 |
1.84 : 1 |
| 5 |
Debt Equity Ratio |
0.56 : 1 |
0.80 : 1 |
| 6 |
Operating Profit Margin (%) |
19% |
15 % |
| 7 |
Net Profit Margin (%) |
14% |
9 % |
(j) Details of any change in Return on Net Worth as compared to the immediately
previous financial year along with a detailed explanation thereof.
| Financial year |
2020-21 |
2019-20 |
| Debtors Turnover ( in days) |
123 days |
187 days |
| Return on net worth (%) |
18% |
13% |
The Return on net worth increased during the year 2020-21 as compared to previous year
2019-20 because of net profit earned of Rs. 2662.05 Lakhs in 2020-21 as against net profit
incurred of Rs 1591.20 Lakhs in year 2020-21.
|
for and on behalf of the Board of Directors |
| Sd/- |
Sd/- |
| Dr. Sachin D. Patel |
H. Dhanrajgir |
| Managing Director & CEO |
Independent Director |
| DIN:00033353 |
DIN: 00004006 |
| Place: Mumbai |
|
| Dated: 27th May, 2021 |
|
+91-9892691696
