ttk healthcare ltd share price Management discussions


Impact of CoVID-19:

Commencing from the second half of March 2020, CoVID-19 pandemic had emerged as a key risk to human health and caused significant economic turmoil which had an impact on the Indian and International business environment. Further, extended lockdown conditions have resulted in adverse impact on sales due to disruption in market openings, supply chain, distributions, etc. The impact of this pandemic on the future operations of the Company would to a large extent depend on how it develops and its resultant impact on businesses. This would also determine whether India would be able to realize its projected GDP growth which was estimated at 5% (Previous year - 6%).

The Indian Pharmaceutical Market (IPM) currently valued at Rs.1,43,738 crores [MAT March 2020], grew by 9.8%.

The growth was driven by (i) growth in volume of existing brands (1.7%); (ii) new introductions (2.73%); and (iii) price revisions (5.35%). While Acute Segment remains dominant therapy in IPM, the growth was driven by Chronic and Sub-Chronic segments. Therapeutic Segments like Urology (13.9%), Respiratory (13.2%), Cardiac (11.8%) and Anti-Diabetic (11.4%) reported healthy growth. (Source: Pharmatrac).



• Economic growth, rising incidence of chronic diseases, increase in healthcare access and expected growth in per capita income would drive further expansion of the healthcare segment. Therefore, there is opportunity for your Company to grow the Pharma/Medical Devices Businesses further.

• Your Company has the unique advantage of an exclusive network for distribution of FMCG/OTC products. This can be leveraged for launch of new products so as to ensure improved profitability and value creation through brand building.

• On Medical Devices, the market continues to be dominated by imported medical devices/implants. Since your Company manufactures world class products and these are priced competitively, this segment provides opportunity for growth. The "Make in India" initiative by the Government would further enhance the growth prospect for this Segment. These products also have export potential. The Government of India has recently announced the "Atmanirbhar Bharat Abhiyaan" (Selfreliant India) which would provide further fillip to the indigenous manufacture of medical devices.

• Due to the outbreak of CoVID-19, there would be emerging categories of hygiene products such as Sanitizers, Hand wash liquids, Disinfectants, etc., and also formulations/supplements focusing on building immunity. Your Company, being well positioned with its distribution network, would take advantage of these emerging categories by launching appropriate products.

• The Government of India is extending its price control policy to cover medical devices in a phased manner. While this may be seen as a threat, there is also an opportunity for domestic manufacturers like your Company as these products are likely to witness higher demand due to competitive pricing.

• The Central Government is implementing a massive Medical Insurance Scheme to cover poor families and this initiative is also likely to increase the number of treatment procedures

which would, in turn, improve the demand for medical implants viz., Heart Valves and Ortho Implants manufactured by your Company.

• Considering the size of the market for food products, the Foods Business of your Company has potential for growth including branding/retail and export opportunities. Further, the increase in home cooking/frying due to CoVID-19 is also likely to generate more demand for ready to cook/fry food products.


• The Product Patent Regime has restricted the access for Indian Pharma Companies to the latest molecules which were earlier available. However, there may be opportunities to launch products that are out of patents regimentation.

• The Drugs Price Control may have an adverse impact on the sales/margins of Pharmaceutical Companies.

• Banning of Fixed Dose Combinations (FDCs) restricted launch of new combinations which is likely to impact the overall size/growth of the market.

• Considering the commodity nature of the current Foods Business, there is pressure on price realizations. Nevertheless, this is mitigated through enhanced focus on export markets and also launch of innovative and differentiated products. Further, efforts are also being made to convert part of the B2B business into branded/retail business.


Your Company is engaged in Pharmaceuticals, Consumer Products, Medical Devices, Protective Devices and Foods Businesses.

A look at the performance of individual Business Segments:

Pharmaceutical Business:

The Ethical Pharma Business of your Company deals in Pharmaceutical Formulations both Herbal and Allopathic, in various therapeutic segments and Food Supplements.

Ethical Products Division (EPD) & Ventura Division

During the year 2019-20, EPD and Ventura Divisions registered a revenue from operations of Rs.159.75 crores, with a growth of around 4%. Though the performance till February 2020 was satisfactory, huge drop in sales during March 2020 due to CoVID-19 has impacted the overall growth for the year as a whole. However, the Division maintained its profitability.

Your Company had bifurcated the Ventura Division into- (i) Ventura - Gynaec; and (ii) Ventura - Fertility. While this initiative has strengthened your Companys position in Gynaecology and Infertility segments, it has taken more time than what was originally estimated for stabilization due to the initial teething issues.

During the year under review, the newly launched products such as Jessica QF (a novel pregnancy supplement), Sensipreg SR (progesterone), Erafos (Fosfomycin) and Pufer (a Haematinic) also delivered a satisfactory performance.

The strategy for the year 2020-21 for Pharma Business is to constantly work on improving the people productivity, to focus on existing/key brands that have good potential and also to launch a few new brands, to grow the business.

Animal Welfare Division (AWD)

During the year under review, the Animal Welfare Division registered a revenue from operations of Rs.71.46 crores with a growth of around 12%. The growth would have been higher but for the impact of CoVID-19 during the month of March, 2020. Institutional component also added a decent share to the overall revenue from operations.

While the Divisions under AWD viz., Bovianim (Livestock) and Companim (Pet) reported healthy growth, Gallus (Poultry) had a setback during the second half of the year under review due to the volatility and soaring prices of poultry feed raw materials. Further, due to bird-flu incidences in certain parts of the country, there was a reduced demand in consumption of meat and egg which has hampered the business heavily.

The initial response for the launch of six products under the newly established Aqua Division is promising.

Major focus for the year 2020-21 is to bounce back with Gallus business and to improve performance of low performing territories, thereby reaching a healthy growth for the year for all the subdivisions of AWD.

Consumer Products Business:

The Consumer Products Division reported a revenue from operations of Rs.181.33 crores, marginally lower than the previous years figure.

Woodwards Gripewater (WGW)

During the year under review, the Woodwards Gripewater (WGW) witnessed a decline in volumes as compared to the previous year. However, with the reckoning of the impact of the revision in the prices, WGW had more or less maintained its value.

Your Company has recently started engaging the New Age Digital Mothers through online initiatives and this is helping your Company to convey the product benefits and usage, alongside building the advocacy for the brand.

The strategy for the year 2020-21 would be to focus on consumption increase in well penetrated markets with a new TVC emphasizing on "3-time a day" consumption and to initiate various Consumer Connect Programs like Van promotion with the presence of doctors, Hospital sampling, etc., to recruit new Moms into this category. Also there are plans to scale up the digital initiatives to build trust and brand awareness among new age Moms.


During the year under review, EVA as a brand reported a decline both in value and volume compared to the previous year.

The packaging of the EVA Deodorant was fully revamped with a two tone colour scheme and also complete change in the graphics of the pack. This new pack was launched in March, 2019 with good promotional support. While the response was reasonably good, the relaunch expectations on the brand were not fully met as the consumers preference was better for the single colour old pack. This has impacted both the volumes/profitability. Considering the feedback from the trade and the field team, it has been decided to go back to the original pack without any change.

The performance of EVA Talc and Winter care products such as Lip Drench, Chapstic, etc., was satisfactory. The launch of revamped pack for EVA Talc is expected to add further volumes to the brand.

The objective for the year 2020-21 is to- (i) regain the consumers confidence and build volumes; (ii) make a strong foothold in the market; (iii) achieve dominant position; and (iv) build robust product portfolio.


During the year under review, Skore brand delivered a satisfactory performance. The brand faced a big setback in the month of March 2020 due to country wide lockdown that led to a meagre growth in terms of value for the year 2019-20.

Skore brand was successfully extended with pleasure aids like Orgasmic Gel for women, Vibrating Rings as well as Pheromone Activating Spray for men.

The strategy for the year 2020-21 would be to increase its reach amongst its consumers through distribution expansion and increasing brand awareness. Focus on innovation and disruption would continue with a few new product launches. To ride on the improved awareness about health and hygiene, your Company proposed to launch intimate hygiene wipes. The brand will focus on strengthening the e-commerce channel with few exclusive launches and also focus on pleasure products.

Good Home

During the year under review, Good Home as a brand reported a decent growth and witnessed launch of a few new products with differentiated offering. These products have been well received.

While Drain Cleaner, Room Freshener and Scrubbers registered a decent growth, Air Freshener Block and Odour Remover reported a decline.

The recently launched anti-bacterial Scrubber is expected to add volumes to the brand.

Your Company is also planning to launch a few germs protection products such as Hand Sanitizers, etc. and also relaunch some of the key products under Good Home Brand in new packaging so as to reflect its modern and ‘House of Good Home philosophy.

The focus for the year 2020-21 would be to uplift the brand imagery, build consumer connect/trust and confidence to grow the Brand further.

Medical Devices Business:

Heart Valve Division

During the year under review, the performance of Heart Valve Division has been quite satisfactory, with a revenue from operations of Rs.23.90 crores and a decent growth, despite the impact of CoVID-19 in the last quarter.

The performance was partly aided by the continued demand for Heart Valves under the recently launched Medical Insurance Scheme by the Government of India.

Your Company is actively working on increasing its presence in the Bi-Leaflet Valve Segment which is showing good acceptance amongst the Surgeons.

As a strategic initiative, your Company has recently signed up an agreement with the Overseas Manufacturer for direct import and distribution of Bi-Leaflet Valves and efforts would be stepped up to build a decent volume in the coming months.

Your Company would commence the Single Centric Clinical Trials for the improved Heart Valves after receipt of necessary regulatory clearances and the first human trial is expected during the year 2020-21.

The focus for the year 2020-21 would be to grow the volumes of TTK Chitra Heart Valves and to gain further volumes through BiLeaflet valves.

Ortho Division

During the year under review, Ortho Division recorded a revenue from operations of Rs.21.33 crores, with a moderate growth.

Expanded into new markets. Healthy growth achieved in new markets in East, North and West. While Southern markets contributed significantly to the revenue from operations, it has reported decline in volumes.

Line extensions to Knee portfolio (Hinge Knee) helped to penetrate into new segments in existing and new markets.

Hip Replacement portfolio (Cemented and Uncemented Hip Replacements) would be launched across the country in 2020-21. The new Hip Implants are coated with the state-of-the-art world class technology by a leading Coating Company in Italy. Additional capacity is being created to support manufacture of new products.

The strategy for 2020-21 would be to continue expansion into new geographies, grow revenues from new products such as Hip range and Knee portfolio extensions and explore export opportunities.

Protective Devices Business:

During the year under review, the performance of Protective Devices Division has been satisfactory, with a revenue from operations of Rs.99.74 crores. This could have been better but for the closure of the facilities during last 2 weeks of March 2020 due to country wide lockdown to manage the outbreak of CoVID-19 pandemic.

Your Company was able to secure an export contract with a reputed international aid agency and the supplies under this contract commenced during the last Quarter of 2019-20.

As in the past many years, your Company successfully went through the Quality Audits conducted by the British Standards Institution (BSI) for ISO and CE Mark, South African Bureau of Standards for SABS Certification and SCS Global Services for Forest Stewardship Council Certification, as part of the continual assessment.

Your Company successfully retained all the certifications without any major or critical non-conformances and is also one of the prequalified Suppliers under WHO-UNFPA Pre-Qualification Scheme for Male Latex Condoms.

During the year under review, your Company had launched various value added, innovative and differentiated products developed by your Companys Research & Development Division. Some more products are in the process of development and a few of those will be launched during 2020-21.

These will help your Company to develop its business further.

The focus for 2020-21 would be to grow the branded Condom business through differentiated and innovative products; to develop and strengthen relationships with third party contract manufacturing customers for increasing the volumes; and to work on cost optimization to be more competitive in the domestic and international bid businesses.

Foods Business:

During the year under review, the Foods Division reported a revenue from operations of Rs.87.74 crores, with a healthy growth both in volume and value.

There were challenges in terms of pricing and margins due to steady increase in some of the input costs and competition. Distribution was further expanded and more new markets were opened up.

Your Companys R&D Centre at Hosakote developed several new products, out of which five were launched in the market. The R&D team is continuously working with different customers and developing innovative products for different applications like ready- to-microwave, hot air popping and mechanical popping, considering the future trend for healthy snacks. Several projects pertaining to cost optimization of the existing products are in the pipeline.

The capacity utilization of the Jaipur factory has significantly increased during the year under review. The new high capacity cooker extruder (HTE 210) imported from Italy was erected and the same would be commissioned during the second quarter of the current year. This new cooker extruder would further increase the capacity and capability of the Jaipur factory.

There was a moderate improvement in Productivity, Quality, Cost Reduction, Delivery, Safety and Moral (PQCDSM) objective of the factories by implementing Total Productive Maintenance (TPM).

The strategy for the year 2020-21 would be to further increase the capacity utilization at Jaipur facility through enhanced focus on domestic/institutional and export businesses and also to work on developing and launching innovative and differentiated products to improve volumes/margins.


Due to the CoVID-19 outbreak, the situation remains volatile with the trajectory of the virus undetermined, evolving hot spot geographies, the success of containment measures uncertain, the severity and duration of resulting economic crisis and the extent of structural damage unknown. There are many unknowns today and hence, the near-term outlook is extremely uncertain. Our immediate focus remains on safety of our people, protecting supply lines, serving demand and optimizing cost and cash.

Despite the near-term ambiguity, the Company remains confident of the medium to long-term growth prospects considering the various categories of products your Company deals in. Although the current situation is much more uncertain than normal, the Company is confident about its ability to manage the immediate crisis and come out of it successfully.


The analysis presented in the Industry Scenario and Opportunities and Threats Section of this Report throws light on the important risks and concerns faced by your Company. The strategy of your Company to de-risk against these factors is also outlined in the said Sections.


Your Company developed necessary Manuals/Standard Operating Procedures (SOPs) for effectively implementing the Internal Financial Control System with the help of an external consultant. Accordingly, various Accounting and Reporting Policies have also been developed and implemented.

Internal Audits are regularly conducted through In-house Audit Department and also through External Audit Firms. The Reports are periodically discussed internally. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies at all locations of your Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee.


Rs. in lakhs)
2019-20 2018-19
Revenue from Operations (Net) 64,576.78 62,788.36
Other Income 877.54 775.35
Total Income 65,454.32 63,563.71
Cost of Materials Consumed 26,002.12 26,259.06
Employee Benefits Expense 14,394.10 13,070.09
Other Expenses 21,351.10 18,503.86
Profit before Finance Cost and 3,707.00 5,730.70
Finance Cost 326.85 337.90
Depreciation 1,437.67 1,466.85
Profit before Tax 1,942.48 3,925.95
Less: Tax expense
Current Tax 585.00 1,495.00
Deferred Tax 125.54 (6.42)
Profit after Tax 1,231.94 2,437.37


• Revenue from operations grew by around 3% for the year as a whole. While most businesses were reporting decent performance till February, 2020, there has been serious disruption across businesses during the second half of March, 2020 due to the outbreak CoVID-19 pandemic and the consequent lockdowns. This has affected the overall performance of the Company for the Fourth Quarter and the Year, as a whole. Further, the reduction in profitability was partly on account of the less than expected performance from the relaunch of EVA Deo despite higher investments towards brand promotion.

• The increase in employee benefits expense was mainly due to

(i) regular annual increments/revision in packages, (ii) addition of employees in Ventura Division as part of expansion and (iii) wage settlement/one time ex-gratia payment to the permanent workmen of Protective Devices Division (PDD).

• The increase in Power and Fuel expenses was due to higher production at Foods Divisions factories at Hosakote and Jaipur and also on account of increase in water charges relating to PDDs Factory at Puducherry.

• The increase in Repairs and Maintenance was mainly on account of the maintenance and upkeep activities carried out at the Central Warehouse at Chennai and also at the factories of Foods and Heart Valve Divisions.

• The increase in Advertisement and Sales Promotion was mainly on account of the higher advertising and promotional activities undertaken relating to WGW (Rs.572.09 lakhs), EVA (Rs.132.95 lakhs) and Skore Brand of Condoms/Pleasure products range (Rs.546.22 lakhs).

• The increase in Travelling & Conveyance was due to revision in the daily allowances payable to the field staff and expansion of field force at Ventura Division.

• Loss on impairment mainly relates to the impaired Multitrack Packing Machine (Rs.41.19 lakhs) at PDD.

• Bad Debts Written Off during the year under review, amounted to Rs.51.34 lakhs, comprising-

Pharma Division (including AWD) - Rs.37.45 lakhs;
Consumer Products Division - Rs.3.28 lakhs;
Heart Valve Division - Rs.0.51 lakhs;
Ortho Division - Rs.1.94 lakhs; and
Foods Division - Rs.8.16 lakhs.

• The R&D expenses mainly include the expenses incurred for the development of the Fixed Bearing Knee.

• Profit on sale of assets was mainly relating to the sale of old Generator (Rs.13.98 lakhs) at PDD and CNC Lathe Machine (Rs.9.80 lakhs) at Ortho Division.

• The increase in Capital Work-in-progress represents the cost of the cooker extruder (HTE 210) installed at Foods Factory at Jaipur. The same will be capitalized immediately upon commissioning.

• The increase in Inventories was mainly on account of lower sales in the month of March 2020 due to the outbreak of CoVID-19 pandemic and the consequent lockdown.

• Deferred Revenue Income represents the custom duty exemption availed in connection with the import of cooker extruder for Foods Divisions Factory at Jaipur and the corresponding amount was added to the asset, in line with Ind AS 20.

• The additions to Fixed Assets mainly include the following:

(i) Construction of Building at-
Foods Division - Hosakote Rs. 23.08 lakhs
Ortho Division Rs. 22.90 lakhs
(ii) Purchase of Plant and Machinery relating to-
Protective Devices Division Rs. 96.51 lakhs
Pharma Division Rs. 77.03 lakhs
Ortho Division Rs. 47.86 lakhs
Foods Division, Hosakote Rs. 3.95 lakhs
Foods Division, R&D Rs. 3.12 lakhs
(iii) Purchase of Computers relating to-
Pharma and Consumer Products Divisions Rs. 17.52 lakhs
Protective Devices Division Rs. 12.95 lakhs
Foods Division, Hosakote Rs. 2.41 lakhs
Ortho Division Rs. 1.83 lakhs
Foods Division, Jaipur Rs. 0.49 lakhs
(iv) Purchase of Patterns & Dies relating to-
Consumer Products Division Rs. 63.50 lakhs
Ortho Division Rs. 9.95 lakhs
(v) Motor Car - Lease relating to-
Pharma and Consumer Products Divisions Rs. 122.43 lakhs
Foods Division, Hosakote Rs. 15.28 lakhs
Ortho Division Rs. 10.00 lakhs


Human Resources:

During the year, your Company, as part of HR Strategy had focused on employee engagement and productivity, leadership development and automation of processes. Your Company has continued to drive the Balanced Score Card (BSC) initiatives and Total Productive Maintenance (TPM) at manufacturing units, in order to enhance workforce productivity and corporate performance.

Your Companys Human Resources Department has successfully automated the Recruitment processes and the Performance Management System. In addition to the regular training provided to new recruits, the Company had provided intense training to frontline managers and select front-line staff to improve productivity. The Company has also embarked on a leadership development journey with the launch of Leadership Advancement Program (LEAP2) in order to build the succession pipeline over the next 2-5 years.

The online Performance Management System built on the philosophy of the Balanced Score Card (BSC) has been rolled out to align people to strategy and Companys performance. All staff and managers at our major offices and factories have been trained on the system. The online Human Resource Management System (HRMS) enables automation of the recruitment process, enabling faster processing of hiring and joining formalities.

To improve the engagement level of employees and to strengthen the internal employer branding, your Company has initiated several employee initiatives such as TTK Quiz Whiz, e-Voice, i-Appreciate and team and sports events. Your Company has also rolled out a comprehensive Rewards & Recognition program including Star Awards (annual sales achievement awards), the Xtra Mile Award (Employee of the Month), Trail Blazer Awards (bi-annual awards) and the Corporate Excellence Awards (Annual Awards).

As on 31st March, 2020, the employee strength was 2515 (Previous Year - 2312).

Industrial Relations:

The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.


Your Company successfully migrated Protective Devices Division operations to Oracle E-Business Suite in the beginning of the financial year 2019-20. During the year under review, the Oracle EBS Control Review was carried out by an External Consulting Firm and their suggestions are under implementation. Your Company has also finalized the Information Security Policy and the same is being implemented in a phased manner.


This analysis may contain certain statements, which are futuristic in nature. Such statements represent the intentions of the Management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.


Particulars 2019-20 2018-19 Change %
Debtors Turnover Ratio 8.21 8.56 (4.09) A
Inventory Turnover Ratio 4.10 4.85 (15.46) A
Interest Coverage Ratio 6.94 12.62 (45.01) A
Current Ratio 1.74 1.73 0.58 F
Debt Equity Ratio (%) 12.63 12.18 3.69 A
Operating Profit Margin (%) 4.38 7.89 (44.49) A
Net Profit Margin (%) 1.91 3.88 (50.77) A
Return on Net Worth (%) 5.22 10.40 (49.81) A

F - Favourable; A - Adverse

• The lower Inventory Turnover Ratio was mainly on account of the higher inventory holding as on 31st March, 2020 because of lower sales in March 2020 due to outbreak of CoVID-19 pandemic.

• The other ratios viz., Interest Coverage Ratio, Operating Profit Margin, Net Profit Margin and Return on Net Worth were impacted due to lower profit as compared to the previous year.