Wanbury Ltd Management Discussions.


The world economy went through a major crisis situation due to Covid-19 pandemic this year. This new and unforeseen challenge disrupted the socio-economic equilibrium, marking a turning point in world economic history.

Healthcare segment also witnessed the impacts of Covid-19, however the industry has shown great resilience. The global spending on medicines crossed US$ 1.3 Trillion in 2020; and is projected to grow at a compound annual growth rate (CAGR) of 3 - 6% in the next five years, reaching over US$ 1.6 Trillion by 2025.

Growth in the global pharmaceutical market will continue to be led by the US and pharmerging markets. While new product launches, especially speciality products, will be the key growth catalyst in developed markets, pharmerging market expansion will be driven by multiple factors, like improving per capita income, increasing healthcare awareness, ageing population and rising incidence of chronic ailments. The product mix in the developed world will continue to shift towards speciality and orphan products. Emerging technologies are enabling healthcare providers to innovate.

The Indian pharmaceutical industry is also expected to grow with the world and become pivotal as a global pharmaceutical provider. As per industry estimates, Indias pharmaceutical industry is expected to grow to US$ 120 to US$ 130 billion by 2030.

Company Overview:

(A) Active Pharmaceutical Ingredients (API) Business:

APIs are chemicals and biologically active elements of drugs with a direct impact on cure, mitigation, treatment and prevention of diseases. The worldwide API market is likely to exceed US$ 248 Billion by 2025 - a 5.8% CAGR for the forecast period from 2020 to 2025.

Wanbury is one of leading global producer of key APIs such as Metformin and Sertraline. Both these API have a large consumer base and have a long-term proven efficacy. Metformin is the first line of treatment for type-1 diabetes and Sertraline is an anti-depressant.

The API division of Wanbury, in FY 2021 registered growth of 24% with revenue at Rs 349 Crore. The raw material supply situation with respect to Metformin reached a level of stability due to supply arrangements with trading companies. Sertraline continues to do well with significant increase in order book position. New long- term business has been developed for supplies to South America markets resulting in significant increase in sales volume. The Company therefore has expanded capacity of Sertraline by 50% which became operational by end of March 2020. The company has plans to further increase the capacity by about 40% in due course of time. Tramadol is going through a degrowth phase, however we continue to identify pockets of opportunity in the product. Among the forthcoming launches, Dextromethorphan API which is used as a cough suppressant, is slated to be commercialised in FY 2022.

Some of the key initiatives for the API business would be as follows:

• Expanding the product portfolio in order to de-risk the dependency on key molecules. A robust product selection process and effective program management is being implemented to increase the filings of new DMFs and diversify the product basket.

• De-risking the supply chain dependency, including those from China, through domestic alternate source development.

• Implementing backward integration for supply security as well as cost optimization.

• Exploring opportunities of expanding its existing and new products into newer markets

(B) Domestic Formulations Business:

Wanbury registered 146th Rank in the latest AIOCD AWACS June21 annual ranking. The fall in revenue was due to sale of few of the brand during FY20, Covid-19 pandemic and the ensuing lockdown which affected doctor in-clinic practice and restriction on moment of fieldforce.

Key focus brands for the Company will be Coriminic range, Chymonac range, Adtrol Range, Cusena, Rabiplus range, Nurture, Senasof, Nifty-SR and Zeva.

The Company focused on addressing challenges emerged due to Covid pandemic and related to which the operational efficiency was impacted. Cost optimization throughout the year had a positive impact for the year.

Some of the key initiatives are as follows:

• Robust monitoring, Internal Control Systems and Processes put in place helped achieve improved operational efficiency & enable quick action.

• The Senior team worked on key areas such as sales force effectiveness, robust review mechanisms, monitoring strategy execution between head office & field to improve the mid/long term business health of the organization. Also, corrective actions on non-performers was undertaken.

• Field training through digital platform was undertaken in all divisions to build capability and engage field force.

• Doctor engagement through digital platform was initiated and continued throughout the year to maintain connect.

• The campaign module in SFA for the field force to monitor effective utilization of the inputs for the customer & monitor the core customer coverage in a systematic way.

• Distribution SOPs in place helped rationalise costs.

• Key initiative : New launches to strengthen product portfolio:

a. Looking into the opportunity of immunity supplements due to Covid-19 pandemic, Wanbury entered into the immunity boosting segment with launch of Zeva Tab to cater to the market need.

b. The need for sugar-free protein supplements at Gyn (for GDM) and Physicians (for diabetes/active lifestyle) was considered and Nurture-SF in two flavours was launched.

(C) Margin Improvement Initiatives:

We have identified various avenues of margin improvement like cost reduction, yield improvement, better product realisation. The Company merged its R & D Centre at Mahape & Tanuku last year and is now fully functional.

(D) Human Resource (HR) Initiatives at Wanbury:

The Wanbury family consists of over 1,000 members spread across various geographic locations and functions. We as an HR showed a strategic and coherent approach in managing the talent and put an endeavour in employing people and developing their capacities, utilizing and maintaining their services. We define a set of key people who support the overall business strategy and keep them engaged and motivated. HR policies and practices are benchmarked continuously with the best in the industry.

(E) Threats, Risk and Concern:

As any other business, your Company is subject to various risks and threats. The key risks/ threats are as follows: Competition:

Your Company operates in a highly competitive environment with pricing being one of the key determining factors of success. In the API business, your Company has been able to overcome this risk by influencing the prices as it is one of the largest manufacturer of Metformin in the world with around 10% market share. Sertraline is seeing high demand and growth especially in international markets.

The Covid 19 pandemic situation has started adversely impacting costs of inputs and raw materials. We are keeping a close watch on how the situation would evolve while the world deals with this global crisis. In the Formulations Business, the Company has mitigated this risk to a very large extent by diversifying its product portfolio and launching new value added products. The continuous rise in crude oil in the past and other commodities prices impacted the prices of raw material and intermediates and in turn increased the cost of APIs.


Manufacturing of pharmaceutical products is highly regulated and controlled by regulatory and government authorities across the world. Failure to fully comply with such regulations, could lead to stringent actions from the authorities/ government. Regulators across the world, including the USFDA, have become stricter with the pharmaceutical industry.

Regulatory requirements and consequences for non-compliance are also getting more severe. Your Company is operating in a state of compliance as required by the Regulatory Agencies. US FDA inspection was announced in February for Tanuku site but was postponed till further notice by authorities due to COVID 19 Pandemic situation. The site is ready for inspection should an announcement be made.

Foreign Exchange Fluctuations:

As the share of exports to total sales made by your Company is considerable, same is partly hedge through natural hedging via raw material imports. Further management exercise close monitoring of currency fluctuations.

(F) Financial Review:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key financial ratios.

The detailed financial & operational performance is provided on page no. 66.

(G) Cautionary Statement:

Statements in the "Management Discussion and Analysis" describing the Companys objectives, estimates, expectations or projections may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations; include Government regulations, patent laws, tax regimes, economic developments within India and countries in which the Company conducts business, litigation and other allied factors.

For and on behalf of the Board of Directors
K. Chandran Pallavi P. Shedge
Vashi, Navi Mumbai, 28th June, 2021 Vice Chairman Director
DIN: 00005868 DIN: 08356412