MIRA
INFORM REPORT
|
Report Date : |
10.01.2012 |
IDENTIFICATION DETAILS
|
Name : |
GRANULES INDIA LIMITED |
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|
Registered
Office : |
Second Floor, Block III, My Home Hub, Madhapur, Cyberabad,
Hyderabad – 500081, Andhra Pradesh |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
18.03.1991 |
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Com. Reg. No.: |
01-12471 |
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Capital
Investment / Paid-up Capital : |
Rs.217.424 Millions |
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|
|
CIN No.: [Company Identification
No.] |
L24110AP1991PLC012471 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
HYDG00432F |
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PAN No.: [Permanent Account No.] |
AAACG7369K |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares
are Listed on the Stock Exchanges |
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Line of Business
: |
Manufacturers and Marketers of Bulk Drugs, Granulations
and Tablets. |
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|
No. of Employees
: |
705 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (49) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 9000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade relations
are reported as fair. Business is active. Payments are reported to be usually
correct and as per commitments. The company can be considered normal for business dealings at usual
trades terms and conditions. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
Second Floor, Block III, My Home Hub, Madhapur, Cyberabad,
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|
Tel. No.: |
91-40-66760000 |
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Fax No.: |
91-40-23115145 |
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E-Mail : |
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Website: |
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Corporate Office/ Factory 1: |
8-2-293/A/A/2, Plot # 227, Road No. 2, Banjara Hills, |
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Tel. No.: |
91-40-23747093/ 23748834/ 23740425/ 23744135/ 23742541/
23553266/ 23550884 |
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Fax No.: |
91-40-23745478 / 23547894 |
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E-Mail : |
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Factory 2: |
Plot No. 15A/1,
Phase III, I.D.A. Jeedimetla, Hyderabad – 500 055, Andhra Pradesh, India. |
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Factory 3: |
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Factory 4: |
Plot No. 160/ A and 161/E, Gagilapur Village, Qutubullapur Mandal, R R District – 500043. |
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R and D Centre |
· Formulations - Gagillapur, Qutubullapur Mandal, Ranga Reddy District – 500 043, Andhra Pradesh, India. ·
API - Plot No.15/A/1, Phase-III, I.D.A.
Jeedimetla, Hyderabad 500 055, Andhra Pradesh, India. |
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Correspondence Address: |
2nd Floor, 3rd Block, My Home Hub
Madhapur, |
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Tel No: |
91 – 40 – 66760000 |
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Fax No: |
91 – 40 - 23115145 |
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E mail id: |
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Website: |
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Sales Offices: |
Located At: · Europe ·
·
·
Asia Pacific(ex-India) and ·
|
DIRECTORS
AS ON 31.03.2011
|
Name : |
Mr. C Nageswara Rao |
|
Designation : |
Chairman- Non Executive and Non Independent Director |
|
Date of Birth/Age : |
15.08.1926 |
|
Qualification : |
M. S. (Surgery and Urology) |
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Date of Appointment : |
18.03.1991 |
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|
Name : |
Mr. L S Sarma |
|
Designation : |
Non Executive and Independent Director |
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|
Name : |
Mr. A. P. Kurian |
|
Designation : |
Non Executive and Independent Director |
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|
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|
Name : |
Mr. C. Parthasarathy |
|
Designation : |
Non Executive and Independent Director |
|
Date of Birth/Age : |
07.07.1955 |
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Qualification : |
B. Sc., LLB, FCA, FCS |
|
Date of Appointment : |
27.05.2009 |
|
|
|
|
Name : |
Mr. Phillip Brian Logan |
|
Designation : |
Non Executive and Non Independent Additional Director |
|
Date of Birth/Age : |
01.03.1962 |
|
Qualification : |
Diploma in Applied Science |
|
Date of Appointment : |
29.01.2009 |
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|
|
|
Name : |
Mr. Arun Rao Akinepally |
|
Designation : |
Non Executive, Independent and Additional Director |
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Name : |
Mr. C Krishna Prasad |
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Designation : |
Managing Director |
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Date of Birth/Age : |
02.10.1954 |
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Qualification : |
B. Sc. |
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Date of Appointment : |
31.08.1994 |
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Name : |
Mr. Harsha Chigurupati |
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Designation : |
Non Independent Executive Director |
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|
Name : |
Dr. Krishna Murthy Ella |
|
Designation : |
Director – Non Executive Independent |
KEY EXECUTIVES
|
Name : |
Ms. Shivangi Sharma |
|
Designation : |
Company Secretary ad Compliance Officer |
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|
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Name : |
Mr. Pranesh Raj Mathur |
|
Designation : |
President (API) and Chief Financial Officer |
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|
Name : |
Dr. A. Bhaskar Krishna |
|
Designation : |
Chief Executive Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2011)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
7,285,653 |
37.25 |
|
|
749,127 |
3.83 |
|
|
8,034,780 |
41.08 |
|
|
|
|
|
|
|
|
|
|
127,110 |
0.65 |
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|
127,110 |
0.65 |
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|
|
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|
Total
shareholding of Promoter and Promoter Group (A) |
8,161,890 |
41.73 |
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|
|
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(B) Public
Shareholding |
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|
|
|
|
|
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|
6,356 |
0.03 |
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|
334,514 |
1.71 |
|
|
340,870 |
1.74 |
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|
|
|
|
|
|
|
|
|
372,337 |
1.90 |
|
|
|
|
|
|
2,751,768 |
14.07 |
|
|
1,151,782 |
5.89 |
|
|
|
|
|
|
6,777,967 |
34.66 |
|
|
329,122 |
1.68 |
|
|
6,448,845 |
32.98 |
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|
11,053,854 |
56.52 |
|
|
|
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Total Public
shareholding (B) |
11,394,724 |
58.27 |
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|
|
|
|
Total (A)+(B) |
19,556,614 |
100.00 |
|
|
|
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(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
505,040 |
- |
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|
505,040 |
- |
|
|
|
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Total
(A)+(B)+(C) |
20,061,654 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 Million BUSINESS DETAILS
|
Line of Business : |
Manufacturers and marketers of Bulk Drugs, Granulations
and Tablets. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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|
|
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|
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|
APIs |
MT |
NA |
10400.00 |
9934.58 |
|
PFIs |
MT |
NA |
8400.00 |
5469.65 |
|
Formulations (Tablets) |
MT |
NA |
6000.00 |
2000.70 |
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GENERAL INFORMATION
|
No. of Employees : |
705 (Approximately) |
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Bankers : |
· Andhra Bank, Somajiguda Branch, Hyderabad-500 177, Andhra Pradesh, India · Standard Chartered Grindlays Bank Limited, Hyderabad-500 177, Andhra Pradesh , India · Citibank NA, Hyderabad-500 177, Andhra Pradesh , India · State Bank of Hyderabad, Gun Foundry, Hyderabad – 500 177, Andhra Pradesh, India · ING Vysya Bank · Indulsand Bank ·
Bank of ·
Union Bank of ·
Export-Import Bank of · State Bank of Travancore |
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Facilities : |
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Banking
Relations : |
-- |
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Financial Institution : |
· International Finance Corporation |
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Auditors : |
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Name : |
Kumar and Giri Chartered Accountants |
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Address : |
D.No. 1-111-126/D, Opposite Aeroview Towers, Begumpet, Hyderabad
– 500016, Andhra Pradesh, India |
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Internal Auditors: |
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Name : |
Dhanunjaya and Prabhakar Chartered Accountants |
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Address : |
302, Wings,
8-3-960/6/2, Srinagar Colony, Hyderabad – 500073, Andhra Pradesh,
India |
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Wholly Owned Subsidiaries : |
· Granules USA, Inc. · GIL Life Sciences Private Limited · Granules Singapore Private Limited |
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Joint Venture: |
· Granules – Biocause Pharmaceutical Company Limited |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
30000000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 Millions |
|
|
|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
20057154 |
Equity Shares (Of the above
24,12,134 equity shares of Rs.10/- each issued for consideration otherwise
than cash, of which 16,67,334 equity shares are issued as per the Scheme of
Amalgamation) |
Rs.10/- each |
Rs.200.571
Millions |
|
|
Add: Forfeited Shares Consists of
39,000 equity shares and 17,60,783 warrants |
Rs.10/- each |
Rs.16.853
Millions |
|
|
|
|
|
|
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Total |
|
Rs.217.424 Millions |
NOTE:
(Of the above 24,12,134 equity shares of
Rs.10/- each issued for consideration otherwise than cash, of which 16,67,334
equity shares are issued as per the Scheme of Amalgamation). Consists of 39000
equity shares and 1760783 warrants (Previous year consists of 39000 equity
shares and 160783 warrants)
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
217.424 |
217.424 |
217.424 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2003.310 |
1821.094 |
1610.941 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
2220.734 |
2038.518 |
1828.365 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
960.375 |
899.727 |
1081.633 |
|
|
2] Unsecured Loans |
57.524 |
107.524 |
107.525 |
|
|
TOTAL BORROWING |
1017.899 |
1007.251 |
1189.158 |
|
|
DEFERRED TAX LIABILITIES |
199.139 |
170.887 |
123.563 |
|
|
|
|
|
|
|
|
TOTAL |
3437.772 |
3216.656 |
3141.086 |
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
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|
FIXED ASSETS [Net Block] |
2229.879 |
2195.568 |
2245.049 |
|
|
Capital work-in-progress |
61.363 |
21.751 |
20.224 |
|
|
|
|
|
|
|
|
INVESTMENT |
226.025 |
226.023 |
216.714 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
601.337
|
515.988
|
371.479
|
|
|
Sundry Debtors |
375.451
|
315.046
|
305.453
|
|
|
Cash & Bank Balances |
68.235
|
94.331
|
74.978
|
|
|
Other Current Assets |
10.977
|
8.372
|
7.485
|
|
|
Loans & Advances |
266.645
|
235.217
|
193.095
|
|
Total
Current Assets |
1322.645
|
1168.954 |
952.490 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
362.504
|
332.730
|
252.477
|
|
|
Other Current Liabilities |
16.076
|
48.996
|
26.709
|
|
|
Provisions |
34.966
|
29.332
|
33.508
|
|
Total
Current Liabilities |
413.546
|
411.058 |
312.694 |
|
|
Net Current Assets |
909.099
|
757.896
|
639.796
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
11.406 |
15.418 |
19.303 |
|
|
|
|
|
|
|
|
TOTAL |
3437.772 |
3216.656 |
3141.086 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4056.770 |
3861.949 |
2538.736 |
|
|
|
Other Income |
7.117 |
4.800 |
8.547 |
|
|
|
TOTAL (A) |
4063.887 |
3866.749 |
2547.283 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Material Consumed |
2512.718 |
2431.132 |
1557.896 |
|
|
|
Manufacturing Expenses |
464.802 |
420.534 |
272.759 |
|
|
|
R and D Expenses |
23.403 |
32.912 |
27.844 |
|
|
|
Marketing and Selling Expenses |
326.678 |
279.295 |
156.681 |
|
|
|
Administrative Expenses |
188.111 |
183.729 |
119.453 |
|
|
|
Miscellaneous Expenditure Written off |
5.569 |
6.295 |
2.179 |
|
|
|
Foreign Exchange Fluctuations |
(3.810) |
[115.239] |
89.042 |
|
|
|
TOTAL (B) |
3517.471 |
3238.658 |
2225.854 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
546.416 |
628.091 |
321.429 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
113.620 |
163.999 |
145.383 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
432.796 |
464.092 |
176.046 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
158.813 |
158.967 |
97.479 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
273.983 |
305.125 |
78.567 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
56.800 |
65.640 |
27.715 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
217.183 |
239.485 |
50.852 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
616.489 |
412.336 |
392.116 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
10.860 |
6.000 |
1.300 |
|
|
|
Provision for Dividend |
30.086 |
25.071 |
25.071 |
|
|
|
Provision for Dividend tax |
4.881 |
4.261 |
4.261 |
|
|
BALANCE CARRIED
TO THE B/S |
787.845 |
616.489 |
412.336 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
3155.989 |
3122.590 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
10.83 |
11.94 |
2.54 |
|
QUARTERLY / SUMMARISED
RESULTS
|
PARTICULARS |
|
30.06.2011 |
30.09.2011 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
1016.110 |
1400.830 |
|
Total Expenditure |
|
902.980 |
1275.840 |
|
PBIDT (Excl OI) |
|
113.130 |
124.990 |
|
Other Income |
|
1.770 |
2.460 |
|
Operating Profit |
|
114.900 |
127.450 |
|
Interest |
|
28.410 |
33.740 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
86.490 |
93.710 |
|
Depreciation |
|
42.870 |
43.500 |
|
Profit Before Tax |
|
43.620 |
50.220 |
|
Tax |
|
12.830 |
15.350 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
30.790 |
34.870 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
30.790 |
34.870 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
5.34
|
6.19 |
1.99 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
6.75
|
7.90 |
3.09 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
7.71
|
9.07 |
2.46 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.12
|
0.15 |
0.04 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.64
|
0.70 |
0.82 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.20
|
2.84 |
3.05 |
LOCAL AGENCY FURTHER INFORMATION
REVIEW OF
OPERATIONS
The net sales of
the Company for the financial year 2010-11 stood at Rs.4056.770 Millions
compared to the net sales of Rs.3861.949 Millions in the previous Financial
Year 2009-10, registering a growth of 5% in the current financial year. The
profit before interest, depreciation and tax stood at Rs.546.416 Millions and
profit after taxes stood at Rs.217.182 Millions during the current financial
year. The Company continued to strengthen its position in the rapidly growing
market and aims at achieving productivity gains, growth in volumes, sustained
margins and neutralising cost increases.
SUBSIDIARY COMPANIES
·
Granules
USA Inc.
Granules USA Inc.,
a wholly-owned subsidiary company, operates for the marketing requirements of
the Company in the U.S. During the financial year 2010-11, the Company achieved
a turnover of Rs.754.374 Millions.
·
GIL
Lifesciences Private Limited
GIL Lifesciences
Private Limited, a wholly-owned subsidiary of the Company has acquired land at
Jawaharlal Nehru Pharma City (JNPC), Parwada Mandal, Visakhapatnam (AP) to set
up a Pharmaceutical manufacturing unit. The Company is yet to commence
operations here.
·
Granules
Singapore Pte Limited
The Company has
not commenced any activity from this wholly-owned subsidiary company.
The relevant
particulars of subsidiary companies and the consolidated final accounts for the
year ended March 31, 2011,
The Company has
not commenced any activity from this wholly-owned subsidiary company. The
relevant particulars of subsidiary companies and the consolidated final
accounts for the year ended March 31, 2011,
JOINT VENTURE
COMPANY
·
Granules-Biocause
Pharmaceutical Co. Limited
During the
financial year 2010-11, Granules-Biocause Pharmaceutical Company Limited, the
Joint Venture Company achieved a turnover of Rs.629.946 Millions.
The Company has
signed Joint Venture Agreement with a Belgium based Company, S. A. Ajinomoto
Omnichem N.V. on July 14, 2011 for the purpose of establishing a 50:50 Joint
Venture Company in India for manufacture of pharmaceutical intermediates and
APIs. The incorporation of the Joint Venture Company is under process however,
the name of the proposed company “Granules Omnichem Private Limited” has been
approved by the Registrar of Companies, Hyderabad (AP).
MANAGEMENT
DISCUSSION AND ANALYSIS
THE GLOBAL
PHARMACEUTICAL MARKET
The global
pharmaceutical market grew 4.1% in 2010 to reach $856 bn. The market is
expected to grow approximately 28% by 2015 to reach $1.1 tn. Market growth will
be driven by a continuing shift to generics and the rapid growth of
“pharmerging” markets. In addition, drugs in the diabetic and oncology
therapeutic sectors will grow more rapidly than other sectors. In order to take
advantage of the market situation, pharmaceutical companies will need to
strengthen production capabilities to meet demand and streamline their supply
chain to meet the dynamics of each unique market.
THE GLOBAL
PHARMACEUTICAL MARKET WITNESSED TWO MAJOR SHIFTS DURING 2010
Demand from patented to generic drugs Growth from developed
pharmaceutical markets to pharmerging markets
THE DEMAND SHIFT
Spending for patented
products will be flat from 2010 through 2015 due to large number of blockbuster
drugs that will go off-patent. Growth will be driven by the generics market.
This market reached $234 bn in 2010 and is expected to grow to $400 - $430 bn
by 2015. Approximately 70% of this growth will be outside the developed
markets. This shift will result in the share of patented medicines to fall from
64% in 2010 to 53% in 2015 while the share of generics is expected to rise from
27% in 2010 to 39% in 2015.
The generic drugs
market has been rapidly growing primarily due to two factors: a large number of
drugs losing their patent protection, and the mounting pressure from consumers
and governments to lower drug costs. In fact, the next five years will be
goldmines for new entrants in the generics segment. The number of branded drugs
to release from the clutches of patents between 2011 and 2015 will be worth
over $100 bn in sales, with more than 50% expected to lose protection in 2011
and 2012 alone.
The generic drugs
industry also stands to benefit from the competition that will arise from the
demand by the consumers and governments to lower drug costs despite rising
development costs and increased regulatory scrutiny. In 2010, the U.S.
government passed a universal health care bill which will affect pharmaceutical
companies across the world. Due to these dynamics, 60% of generics growth will
be from increased penetration rates while 40% will be due to newly available
generics.
THE GROWTH SHIFT
Over the next several
years, growth in the developed market will slow and the pharmerging market will
lead industry growth. Within the pharmerging markets, growth will primarily be
driven by countries in Asia including India, China, Malaysia, South Korea and
Indonesia. This market benefits from low penetration which is rising due a
growing middle class and increased healthcare awareness levels. The middle
class has more disposable income and is able to seek medical care for health
care issues that might have been ignored in the past. In addition, the middle
class is living longer and is seeking US medication for chronic and lifestyle
diseases.
Healthcare awareness is rising due to increased government initiatives
and the proliferation of medical insurance. In order to lower healthcare costs,
governments are conducting more public drives to encourage people to seek
preventive care. Also, medical insurance is becoming more popular in
pharmerging companies so consumers are visiting physicians more often than the
past.
GRANULES’ PRODUCT
OVERVIEW
Granules focuses
on pharmaceutical products with high API and/or finished dosage volume
requirements. In many high-volume pharmaceutical products, there are dozens of
suppliers which leads to excess overall market supply. While there are large
surpluses, high quality material for the regulated markets is in short supply
and can only be serviced by a handful of suppliers.
Customers in the
regulated markets including North America and Europe require high-quality
supplies with stringent quality controls. These customers value supply security
and quality over pricing. Customers work very closely with their supplier’s
regulatory and quality control departments and once they pick a supplier, the
customer stays with the supplier for multiple years and only periodically
reviews other opportunities. Due to increased accountability and consumer
pressure, countries in the semi-regulated market are implementing tighter
controls and are demanding more stringent quality parameters.
ANALGESICS MARKET
The analgesics
market, which focuses on offering pain relief, is one of the largest segments
of the healthcare industry with sales of approximately $31 bn. The market is
growing at a 2.7% CAGR.
Future growth will
be driven by an ageing population that will have chronic ailments including
arthritis and lifestyle changes include more sedentary jobs and higher obesity
rates. Granules is among the leading producers of Paracetamol and Ibuprofen and
also competes in the Naproxen and Analgin markets. Paracetamol holds 58% of the
analgesic market by volume and is widely used around the world. Ibuprofen is
the fastest growing product in the sector and is expected to surpass Aspirin,
whose growth rate has slowed. There are no analgesic products in the pipeline that
are expected to replace the current leading products.
PARACETAMOL
Paracetamol, also
known as acetaminophen, is used to reduce body pains, headaches and lower
fevers. The past year was interesting for Paracetamol because of a global
inventory correction and multiple product recalls by a major brand. In 2009,
many suppliers anticipated a surge in demand because of the outbreak of swine
flu and purchased more Paracetamol than normal. However, fears of swine flu
were overblown and a global pandemic never materialised. Due to this, many
suppliers started 2010 with excess inventory and reduced orders until inventory
came down to normal levels. McNeil, the producer of Tylenol, had multiple
product recalls during 2010 and was forced to pull its product from store
shelves. Consumers who wanted Paracetamol were required to buy generic versions
due the shortage of Tylenol. Industry analysts feel consumers might not return
to Tylenol since most consumers saw no difference between a brand version of
Paracetamol and a generic version.
In the past
several months, Rhodia, which sold its Frenchbased facility several years ago,
signalled its exit from the Paracetamol world by selling its China-based API
facility as part of a broader asset sale. Due to the plant’s close proximity to
a city, the China facility’s long-term viability is in doubt.
IBUPROFEN
Ibuprofen is
primarily used for arthritis relief and fever reduction. The drug is popular in
North America and Western Europe, which account for nearly 60% of global sales.
Ibuprofen is a more complex analgesic to manufacture compared to Paracetamol
which is why there are not as many suppliers.
Approximately 6
manufacturers control the Ibuprofen market, which is growing in the mid-to-high
single digits. The drug is becoming more popular due to an ageing population
that wants to maintain their lifestyle. Over the past year, Indian- and
Chinese-based suppliers have increased capacity to capture a larger market
share. The increase in market supply has led to pricing pressures as
manufacturers have been forced to reduce prices to sell their new capacity.
ANTI-DIABETIC MARKET
The anti-diabetic
market is extremely lucrative due to the growing number of people with
diabetes. The number of people with diabetes is expected to grow from 246 mn in
2008 to 380 mn by 2025. The emerging markets are expected to be a major source
of new diabetes cases as they adapt Western lifestyles.
· Medication for diabetes excluding insulin is expected to grow from $24 bn today to $55 bn by 2019. There are multiple classes of drugs to treat diabetes which range from cheap, first-line therapy to expensive, advanced therapies Biguanides: The most popular drug in this category is metformin, which lowers glucose levels. This is often used as the first response for Type II diabetes
· DPP-4 Inhibitors: This is the latest generation of diabetes drugs and over the next decade, several products will be released Diabetic cases are spread evenly throughout the world and there is a large opportunity for cost effective medication
METFORMIN
Metformin, a
prescription drug, is the first biguanide oral anti-diabetic agent to be
approved by the U.S. FDA after phenformin (phenethylbiguanide) was banned in the
U.S. in 1977. Due to its relatively low cost and high-effectiveness, metformin
is often used as a first-line therapy for patients with type-II diabetes.
Annual production
capacity for metformin is approximately 25,000 tonnes. Approximately 50% of the
capacity is based in India. Wanbury Limited, an Indian company, has an 8,500
tonne production capability, the largest in the world. Due to the rising number
of diabetic patients in the world, demand for metformin is increasing and
multiple suppliers are increasing capacity in order to meet global demand.
Active
Pharmaceutical Ingredients (API)
The API division
has some of the largest global manufacturing capabilities in the products they
compete in. Granules’ extensive knowledge of APIs and comprehensive research
and development has contributed to focused portfolio of high quality products.
Pharmaceutical Formulations Intermediates (PFI)
Granules pioneered
the concept of commercialising PFIs. The division manufactures single- and
multiple active PFIs at two facilities in Hyderabad. Granules’ flagship
facility in Gagillapur has the largest PFI manufacturing facility in the world.
The facility uses high-shear and fluid bed granulation processes, with 6 MT
batch sizes, the largest in the industry. As a result, customers enjoy reduced
testing, easy documentation, quicker product clearances and lower regulatory
costs.
Finished Dosages (FD)
Granules’ finished
dosage facility has automated processes, robust infrastructure, and superior
quality systems that produce formulations much more efficiently than others. In
order to fully service customers, Granules offers finished dosages in bulk,
blister packs and bottles.
DEVELOPMENTS IN
2010-11
In order to meet the needs of customers, Granules has scaled up production
and invested in R&D.
Received approval for two ANDAs – Metformin (500 mg, 850 mg and 1000 mg)
and Ibuprofen (200 mg) Launched capacity expansion projects in the PFI and
Finished Dosages divisions Achieved a capacity run rate of over 50% in the Finished
Dosage unit during Q4 Increased API capacity by de-bottlenecking Enhanced
efficiencies across divisions through significant investments in R&D
Launched several new products in the Finished Dosage division
PROFILE OF THE BOARD
OF DIRECTORS
Dr. C. Nageswara Rao,
Chairman
Dr. C. Nageswara Rao is a nationally renowned surgeon with fifty years of professional experience. Dr. Nagewara
Rao has been very active in several medical fraternities and served as the Chairman of the Andhra Pradesh Medical Council. He was a member of the All India Medical Council, a Syndicate Member of Nagarjuna University and a Director of Hindustan Antibiotic Limited. He holds an M.S. in Surgery and Urology.
Mr. Krishna Prasad, Managing Director
Mr. Krishna Prasad is a technocrat with 30 years of experience in the pharmaceutical industry. In 1984, he established Triton Laboratories Limited, one of the largest manufacturers of Paracetamol in the world. Mr. Prasad pioneered the concept of commercializing Pharmaceutical Formulation Intermediates (PFI) and established Granules India to promote PFIs. With his leadership, Granules is among the premier pharmaceutical companies in the world and has a footprint in over 50 countries. Mr. Prasad has won various awards and is the first Indian to run a marathon on seven continents and the North Pole.
Mr. L. S. Sarma, Director
Mr. L.S. Sarma is a nationally recognised executive in the financial industry. During his career, he served as a General Manager at Industrial Development Bank of India (IDBI), Director of ECGC and Dena Bank. In addition, he worked for the International Trade Centre, as an Export Credit Consultant. He currently serves as a board member at Hexaware Technologies Limited.
Mr. A. P. Kurian, Director
Mr. Kurian served as the Chairman of Association of Mutual Funds in India. Mr. Kurian started his career at the Reserve Bank of India. Over the next 20 years, he worked with Unit Trust of India holding positions of Director- Investments, Director-Planning and Development and served as the Executive Trustee (equivalent to Managing Director) from 1987 to 1993. He is on the Board of National Stock Exchange, Executive Committee of NSDL and several other Committees associated with Mutual Funds and Capital Market.
Mr. Comandur
Parthasarathy, Director
Mr. C. Parthasarathy is one of the founders of Karvy. As the Chairman of the group, he has been responsible for building Karvy into one of India’s truly integrated financial services organisations. He is a fellow member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He holds graduate degrees in Science and Law.
Mr. Krishna Murthy
Ella, Director
Dr. Krishna Murthy Ella is the chief promoter of Bharat Biotech, a premier biotech company. As Managing Director of Bharat Biotech, Dr. Ella has worked with the prestigious Gates Foundation and revolutionised the vaccine world by introducing $1/dose anti-diarrhea vaccine. Dr. Ella was previously part of the Research faculty at the Medical University of South Carolina – Charleston and was awarded his Doctorate from the University of Wisconsin-Madison in Molecular Biology.
Mr. Philip Herbert
Strenger, Director
Mr. Strenger is Senior Vice President – EMEA and Global Pharma/Beverage for International Specialty Products Inc. Mr. Strenger is responsible for the management and profitability of the ISP business in Europe, Middle East and Africa across Business Units, and on a global basis is responsible for the strategy and growth of the ISP Pharmaceutical and Beverage business. He holds a Bachelor of Science degree in Chemistry from the University of Southern California in Los Angeles.
Mr. Arun Rao, Director
Mr. Arun Rao is the Executive Director of Akin Laboratories Pvt Limited, a Formulation manufacturing Company. Mr. Arun Rao is a member of the Central Executive Council of the Indian Pharmaceutical Association. He is also on the Board of ESPI Industries and Chemicals Private Limited, a leading manufacturer of antacids in India. Mr. Rao is a qualified Chemical Engineer from the University of Madras with a Post graduate degree Chemical Engineering from the Illinois Institute of Technology, Chicago, USA.
Mr. Harsha
Chigurupati, Executive Director
Mr. Harsha Chigurupati has been with Granules India since June 2005. As Chief Marketing Officer, Mr. Chigurupati was instrumental in Granules India’s vertically-integrated business strategy. During his tenure, Granules India gained nearly 100 customers, including several multi-national companies that constitute a large portion of Granules India’s sales. Mr. Chigurupati has a Bachelors of Science in Business Management from Boston University.
CONTINGENT
LIABILITIES:
|
Particulars |
31.03.2011 (Rs. in Millions) |
31.03.2010 (Rs. in Millions) |
|
|
|
|
|
a) Claims against the company not acknowledgment as debts: Customs duty |
70.539 |
21.093 |
|
|
|
|
|
b) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
93.039 |
42.656 |
|
|
|
|
|
c) Letters of credit and Bank Guarantee issued by bank |
220.252 |
181.273 |
|
|
|
|
|
d) Bills discounted with banks |
851.111 |
789.338 |
FIXED ASSETS:
·
Land
·
Buildings
·
Plant and Machinery
·
Computers
·
Office Equipment
·
Furniture and Fixtures
·
Vehicles
·
Technical Knowhow
AS PER WEBSITE:
MILE STONES
At Granules, they are proud to have maintained a record of success since
1984. The milestones that have catalysed the growth are indicated below:
1984: Inception of Triton Laboratories at Bonthapally for manufacture of
Paracetamol/Acetaminophen API.
1990: Established a multi-active facility at Jeedimetla.
1991: Formation of Granules India Limited.
1993: Established a small volume PFI facility at Jeedimetla with a plant
capacity of 1,440 TPA.
1995: Announced our Initial Public Offering (IPO).
1998: Expansion of Jeedimetla facility for development of Guaifenesin and
Metformin APIs.
2001: Obtained U.S. FDA and cGMP approval for PFIs and other APIs at the
Jeedimelta facility.
2002: Developed new Guaifensin, Metformin and Ibuprofen PFIs.
2003: Opened a large volume PFI facility at Gagillapur with a capacity of
7,200 TPA.
2003: Set up a wholly-owned subsidiary in the U.S. called Granules USA Inc.,
for marketing and logistics.
2004: Obtained approval from U.S. FDA, Australian TGA and German Health
Authority for our PFI plant at Gagillapur.
2005: Built a new manufacturing facility for Paracetamol/Acetaminophen API.
2006: Joint venture with Hubei Biocause Pharmaceutical Company Limited, in
Wuhan, China to manufacture and sell Ibuprofen API.
2008: Commenced a six billion tablet facility at Gagillapur after receiving
approval from the European Regulatory Body in October 2008.
2010: Received U.S.FDA Approval on our dedicated finished dosage facility at
Gagillapur.
BUSINESS DESCRIPTION
Subject is a
producer of active pharmaceutical ingredients (APIs), pharmaceutical
formulation intermediates (PFIs) and finished dosages (FDs). GILs products
include Paracetamol, Ibuprofen, Guaifenesin, Metformin and their derivatives
relating to PFIs and finished dosages. GILs API facilities are located at Bonthapally
and Jeedimetla. The Bonthapally unit manufactures Paracetamol API, also
commonly known as Acetaminophen. The Jeedimetla unit manufactures APIs, such as
Metformin, Guaifenesin, Methocarbamol and Phenazopyridine. It has manufacturing
facilities in Hyderabad at Bonthapally, Gagillapur and Jeedimetla. Its also has
a Ibuprofen manufacturing facility in Jigmen, China, through a joint venture
with Hubei Biocause Heilen Pharmaceutical Co., Limited. During the fiscal year
ended March 31, 2010, the Company had production of 1030.7 million metric tons
of APIs, 580 million metric tons of PFIs and 53358.6 million metric tons of
formulations (tablets). For the nine months ended 31 December 2010, Company
revenues increased 4% to RS3.56B. Net income decreased 47% to RS120.8M.
Revenues reflects an increase in income from operations. Net income was offset
by an increase in research and development expenses, higher consumption of raw
materials, an increase in employees cost, a rise in administrative expenses,
higher other expenditure and an increase in selling and distribution expenses.
NEWS:
GRANULES
INDIA TO SET UP R&D UNIT AT PUNE
12 December 2011
India, Dec. 12 -- Granules India received board of director's nod for
setting up of Research and Development (R&D) unit at Pune (Maharashtra).
The company has considered and approved the business at boards meet held on
December 12, 2011. The company is a producer of active pharmaceutical
ingredients (API's) and pharmaceutical formulation intermediates (PFIs) with
complete vertical integration. They expertise in manufacturing PFIs which are
Directly Compressible Granules has helped customers to move to the next level
of outsourcing in the pharmaceutical industry.
GRANULES
INDIA TO CONSIDER WORKING CAPITAL LIMIT
05 December 2011
India, Dec. 05 -- Granules India has informed that a meeting of the
board of directors of the company will be held on December 12, 2011, to
consider and approve the working capital limit and to consider and approve the long
term financing facility. The above information is part of the company's filing
submitted to the BSE.
BOARD MEETING ON
DEC 12, 2011
05 December 2011
India, Dec. 05 -- Granules India Limited has informed BSE that a meeting
of the Board of Directors of the Company will be held on December 12, 2011, to
consider and approve the working capital limit and to consider and approve the
long term financing facility.
THE
CPHI INDIA 2011 EXHIBITOR'S GALLERY: GRANULES INDIA
05 December 2011
Granules is a large scale manufacturing company that partners with market leaders to offer pharmaceutical products and services. It has a long history as a producer of APIs, pharmaceutical formulation intermediates (PFIs) and finished dosages (FDs).
As a fully vertically integrated pharmaceutical manufacturing company, it has three core lines. In APIs, Granules has three factories manufacturing APIs. Granules also pioneered the concept of PFIs and currently has two factories manufacturing single and multiple-active PFIs. The company's Gagillapur facility has an industry-leading 6 MT single batch size. Granules has a dedicated finished dosages plant at the Gagillapur facility which has the capacity to produce 6 billion tablets annually and is scalable up to 12 billion tablets. The facility has received approval from USFDA, Infarmed and the Australian TGA.
The company's integrated model allows it to provide products throughout the value chain in a cost-effective and efficient manner. It serves over 300 customers in 50 countries through sales offices in India, US, UK, Colombia and China.
Granules has highly sophisticated production processes in order to manufacture a broad assortment of products, thereby supplying a wide range of products and services to our customers in a flexible and reliable manner. The company's products can be used in a range of pharmaceutical applications and is constantly developing new products and variants to meet its customers' specific requirements.
Its product specialists, supported by application technologists, research scientists and regulatory advisers are able to provide immediate advice and customer support. By offering unique products and a high level of customer support, the company can offer its customers the competitive advantage that is vital in the highly competitive pharmaceutical sector.
Granules encourages its customers to replace their conventional strategy of captive manufacturing with prudent outsourcing.
The company's green initiatives will not only help the environment, but will lower operating costs and will support our endeavour to become a preferred partner. Starting from the implementation of 'Environmental Best Practices' at the Gagillapur facility (recognised by CII), the use of sophisticated equipment to collect the dust generated during process activities and material transfer, having a delegation of eco-friendly measures to employee levels, to converting the entire plant into a non-smoking area, Granules' robust environment management comprises many other efforts. It also conducts wastewater analysis on effluent samples, does frequent tests and monitors the ground water, soil, ambient air, stacks and noise levels; it has also implemented cleaner technology to minimise liquid effluent, gaseous emission and solid waste. Hazardous solids from various production stages and effluent collection tanks are sent to the Hyderabad Waste Management Project for safe disposal. Gaseous emissions too are scrubbed, cleaned and made harmless with suitable chemical reagents before they are released.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.52.73 |
|
|
1 |
Rs.81.34 |
|
Euro |
1 |
Rs.67.01 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
49 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.