I had studied the 2012 AR sometime back - here are the excerpts - the ‘good’ I could find with nearby triggers. This ran recently (20% in a day) in the pharma rush but might come back if people run after momentum now. The management is excellent.
2011-12 was a very successful year for Hikal, where overall sales increased by 41%. It is positive to note that the Crop Protection business grew by 42% after many years of slow growth. The Pharmaceutical business continued to grow and recorded an increase of 40% in revenues. EBIDTA increased by 47% to
1,884 million from 1,282 million, and PAT increased by 22% from
443 million to 541 million.
The shareholders’ funds of the company increased from
4,217 million to 4,598 million, an increase of 9%. The long-term debt has decreased by ` 57 million despite the revaluation of our dollar denominated loans due to the depreciation of the Rupee versus the US dollar. The debt to equity ratio has improved from 0.99 to 0.92.
The loss in our foreign exchange due to hedging of forward exchange contracts was higher than we expected during the year. It was primarily due to the significant devaluation of the rupee in the last two quarters of the year 2011-12. Most of the forward contracts will expire during the first two quarters of the coming year and we expect significant improvement in profitability in the second half of the year ahead.
Our strategy exercise with a leading global consulting company was completed in the first half of this year. We have reviewed the recommendations in detail and have initiated the implementation in a phase- wise manner. We expect the benefits of this study to be realized over the years to come. In 2011, the facility (Jigani) was audited successfully by the USFDA for the third time. A new multipurpose API manufacturing block is scheduled to be commissioned by 2013.
The increase in profit can be attributed to the larger sales volumes of existing products and operational efficiencies in the manufacturing plants
In 2011-12, the revenues of the Crop Protection division increased substantially by 42% to
2,465 million as compared to1,734 million from the year before. The increase in sales was primarily due to the larger off take of
products by our customers. Our new products which were in the R&D stage are expected to be commercialized in the next financial year leading to additional growth in the years to come.
Our Pharmaceutical division recorded its highest turnover at
4,477 million as compared to3,201 million in the previous year, a growth of 40%. Much of the growth can be attributed to the increase in sales of our existing product
portfolio as we captured a larger market share and added new customers.
One of our leading API products in the Pharmaceutical division experienced higher than expected volumes from existing customers as well as from newer indications that have been approved for the product. We received
clearance to manufacture two contract manufacturing products which are expected to grow in volume over the next few years. This will further improve the capacity utilization at our Panoli and Jigani facilities considerably.
The contract manufacturing of these molecules will add stable revenues and margins for the division over the next few years.
The construction of our newest multipurpose API plant which is capable of manufacturing 4 APIs simultaneously is underway at our USFDA facility in Bangalore. This plant is expected to be ready in 2013 and will cater to the new
products under development at Hikal R&D and contract manufacturing requirements of our existing customers.
Our Crop Protection division revenues are primarily driven from contract manufacturing products for multinational innovator companies. The past year saw a volume increase of a fungicide produced for a major European
multinational company. An intermediate for the same customer produced at our Mahad facility has grown in volume and based on future forecasts given by the customer, we expect it to grow further.
We have added two customers for commercial manufacturing which is expected to commence next year. The lab trials for these molecules have been completed. We worked on multiple late stage research projects for Japanese
Crop Protection companies which are expected to fructify over the next two years. It will lead to additional revenues in the Crop Protection division. We are currently working on an intermediate to be manufactured at our Mahad
facility for the Japanese market. It is a solvent for the electronic chemical market with extremely stringent quality requirements. The success of this project along with others has opened up a new market in the fast growing
specialty chemicals field for the company.
We have invested incrementally in debottlenecking our plants at Taloja and Mahad to cater to the additional demand of our customers. Going forward, we are focusing on maximum capacity utilization at our manufacturing
facilities which will improve our profitability We received final clearances from a European innovator multinational company to commence commercial production of multiple products at our Panoli and Jigani facilities. We had built dedicated facilities for the production of these molecules which are expected to be commercialized in the second quarter of the next financial year. These are both large volume products and are expected to grow in volume over the next few years. This will further improve the capacity utilization of both sites considerably.
Commercial quantities of an API product that we had under development has been successfully manufactured and approved by an innovator company in the US. This product will be contract manufactured at our USFDA plant
in Bangalore and supplies are expected to start in the second quarter of the next financial year.
Validation trials of two new APIs under development have been completed. We expect commercial quantities to begin in the next financial year. These products are in the process of being approved by our customers as they go
Construction of our newest multipurpose API plant which is capable of manufacturing 4 APIs simultaneously is underway at our USFDA facility in Bangalore. This plant is expected to be ready in 2013 and will cater to the new
products and contract manufacturing requirements of our existing customers.
On the regulatory front, we had two milestones. Our Bangalore USFDA facility passed its third audit successfully receiving zero 483s (zero regulatory deviances). It is an accomplishment for the company from a regulatory,
quality, environment, and health and safety perspective. It bears testimony to the high standards that we uphold. As part of the company’s initiative to become an integral component of the global supply chain, we were audited
and certified by the globally recognized voluntary supply chain consortium, Rx360. We are the first Indian life sciences company to be successfully audited by this organization. A significant number of leading multinational
innovator, biotech and chemical companies are members of this supply chain which is a clear differentiator to become a supplier to these companies.