cf (cadila)
TRANSCRIPT
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nipo boomn2g unravellednunlocking land valuenaia engineering leadsMay 30, 2010
`2
midas Touch
cadila healThcarepj pt
cm
Smart acquisitions propel 18-fold growth
December 12, 2010
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B u s i n e s s i n d i a u nvmbr 29dcmbr 12, 2010Cover Feature
Midas
Touch
cadiLa hEaLThcaRE
Pnkj PtelcMd
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r g xc-tv, wh lk t p rv cvtw t trr c-
mt gtll, r lkl t rcv rthr rt wlcm t th crp-rt h c Cl Hlthcr ahmb. Th r: th tpmgmt th rg trlr blv tht th rk cm-ptr vr vg thr cmpt-r twrk thrgh p rv rtwgh th prcv bt th bqt vc.
Th prr t gv w cd -t, lthgh t ll m thtl th 1 pr ct t 700 mb pcwl b . at rt ght, th p-pr rthr wtl, bc mtcd th mrkt c b wrtt pl c. Bt t l lltrt t-bl th cmp plc pt-g cmm prctc, l th
ppr trl bcl t mrlbc vr l g t.
Cl Hlthcr, r th tw-rhp chrm mggrctr Pkj R. Ptl, h l th pprch t mk trg cqt vr th pt 15 r,blg th cmp t grw t tprt z rl `3,700 crrrm l trvr jt bt`200 crr 1995.
i th pt w r, vrl tpr m bg tckt cqt,mtl erp: dr R bghtth Grm cmp Btphrm;Rbx cqr Trp, b Rm; Wckhrt Pw (rm irl) ngm(Frc) t t l; pg btw$100 mll (`450 crr) $300mll (`1,350 crr) ch.
Cl Hlthcr, th thrh, crll ch bkr z
mllr trgt p rltvlmt mt r thm. i 2003,r xmpl, t tk vr alphrm,whch h l 4.5 mll, l wrth 5.5 mll. i 2009,Cl l alphrm pttmc v r 7 mll,v th thr gmt rmr t ctrl.
n rpr, thrr tht, whlth thr cmp h tgh tmmgg thr vr cqt mtm th wl c-qr t rg thr blcht, Cl w bl t tgrt tw t wth crbl .
Cl c rm th trt trtgc t t tht wl gvthm tr t w ggrphclr r trgth thr mrkt hr crt thrptc r. Th,t bght Rc Hlthcr 2000t bt t prc th i
Cl Hlthcr
h grw lmt
18-l 15 r
thrgh mrt
cqt
tm-hr
mgmt
prctc
Sharvil: generation next
PHoToGRaPHs By: palashranjan bhaumick
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B u s i n e s s i n d i a u nvmbr 29dcmbr 12, 2010 Cover Feature
Wh tht h b chv, thxt tp w lr ght tmt cagr (cmp -l grwth rt) rl 25 pr ct.i th pt v r, t, th hvmg t rcr cmpgrwth 22.6 pr ct thr l
rv, hvg g rm `1,507crr Fy06 t `2,927 crr Fy09.drg th tm, thr t prt hr rm 152.4 crr Fy06 t`505.1 crr Fy10. a thr prtzm, th mgmt wllglhr th rwr wth thr v-tr, wth b Fy07 (rt1:1) Fy10 (1:2).
nw, Fy10 l rch g-r `3,686 crr, th bzz thcmp bt th Hlth Bl-l ttv, t pt bll l-
lr l b th Fy11, -tt tht vr th hghrchl cr t b wll wththr rch.
Healthy billionBt, kpg wth th lw prltht bth Ptl hml h cm-p lk t kp, thr wll prbblb lttl clbrt cht thmp-g pblc jt rrmt tc th xt lmrk w rt th tr. Ptl h 12-mm-
br xctv br hv lr gtthr tr l $3 bll(`13,500 crr) th xt v r b 2015-16. Th l xpct t b blt mrkt w ptt mc thr w b 2020. Th, Cl -gg rt ctt gt Lp
Lt, whch l h th m rvtrgt r th xt v r.
Whl th br ctr thcmp rt t $3 bll ltrgt r lr bg chlk t,mtl th rm t tht Ptllk t jt w rm tm t tm,th rll tl plg wll b-g l th l qrtr Fy11.
athr r th trgt r-vw prc tht th xctv brrtk vr thr mth.Thrght th Hlth Bll
cmpg, w hv b trckg rprgr lg 70 rt pt, shrvl Ptl, pt mggrctr, Pkj Ptl . Hj th cmp bt r rg tr cmpltg h grt chmcl phrmctcl
cc rm srl uvrt,uK, tt rrch t JhHpk uvrt, us. s tr,h tk chrg th Hlth Bllcmpg trc mbr ttv tht r cc thr vr.
B, th cmp tk -qt mr t lk tr th tr-t t k xctv trttht bg r th rlr gr-t. a rlt, Ptl gt crclvtg rg th 18-mth v- prc: l hr th 400- xctv, mjrt whmpt t j h tm rthr ththt Rjv M.
M wr prmt r gv thrctv t j th tm , t pt, th h x ppl wth th
gt grl mgr, c!smlr pqt tt vlpt thr lvl wll. T ccmm-t ll thm, w h t crt pcl b t, P.R. Jh,prt, grp hr crprtcmmct, 30-r vt-r th cmp. othr r x-ctv wh j r th rlrmgmt cl Gh nk,ch prtg cr (coo), s.G.Blpr, prt, mctrg rmlt.
ev w, w hv wll-tb-lh tm pttg prmgmpl, pttg thm thrghth Z Tlt Mgmt Pr-grmm, tr whch th xcptl c b t-trck t pt grtr rpblt, Jh.
eqll gct th cm-p mph rrch. a tm mr th 1,000 ctt rvth Z rrch vlpmtprgrmm, whch c b gmt- t r tct t. Th rt th Z Rrch Ctr, whrlmt 400 ctt r ttllc nce (w chmcl -tt) wrk t t cvr wmc, r whch Cl c wth prmr ptt.
nxt th Phrmctcl Tch-lg Ctr (ptc), whch c-ctrt vlpg w -g rm r grc mc, rwhch thr grt m wt-r ctr. Th prtmt lrpbl r pttg tgthr ll
( crore)( crore)Impressive growth
2005-06 2006-07 2007-08 2008-09 2009-10 5-yearCAGR (%)
Financials
Gross sales 1507.8 1874.7 2363.8 2917.1 3614.2 22.60
Total income from operations 1484.5 1828.8 2322.9 2927.5 3686.8 23.60EBIDT 287.7 352.1 458.2 605.8 808.6 27.20
EBIT 209.8 269.8 391.3 494.0 674.7 31.60
PBT 176.8 273.9 323.4 369.8 603.9 34.50
Net profit before exceptional
items (net of tax) 162.4 210.2 263.3 323.4 509.2 31.30
Net profit 152.4 233.8 257.6 303.1 505.1 33.30
EPS (`) 8.09 12.41 13.67 14.8 24.6.7 31.10
R&D spend
Revenue 79.7 134.4 133.6 156.4 166.0 17.70
Capital 37.0 26.9 26.8 31.3 41.5
Total R&D spend 116.7 161.3 160.4 187.7 207.5 14.40
Parekh: in favour of debt
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th cr mtrl r th anda(bbrvt w rg pplct)tht vr cmp h t l wthrg rgltr thrt th us,uK, lwhr, br th cm-p c mrkt t grc rg th ctr. Tll t, th cm-p h l 106 anda, whch54 hv b pprv b th us fda rl ql mbr r rrvw. aprt rm th us fda, p-prvl r t prct hv l cmrm mhra (uK), mcc (sth arc),
Wrl Hlth orgt,anvisa
(Brzl), bfad (th Phlpp), nda(ug) m thr.
Th thr th api (ctv phr-mctcl grt) rrch c-tr, whr vr 150 ctt vtthr rg twr gg bttrtchlg t mk rg blk
qtt, rc prct ct tm, mprv th l vr rw mtrl. Lt, bt tth lt mprtt, th VccTchlg Ctr, whch rcttwr th hghl cmplx prcvlv prcg vcc.
Lk m thr tr xprt,Cl h l rl tht vccr th m pr th -tr. Tht vrl mlttl lks, gsk msd (Mrck, shrp dhm) r trvg hr t cp-tr hr th glbl vcc pct tht Cl plr hvgt thr rml th bll.
Whl th rrch v rc thr g tk, thmctrg clt tht thcmp h pt tgthr, hv c-
trbt bttll t thr c-c, bth i br. Thct x prct plt rh g rm (l kw rmlt) lct Mr,skkm, B, G (tw) Brzl.o th, th Mr clt, rahmb, usfda-pprv mch th rmlt r xprtcm t thr.
Nycomed tie-upFr th mtc mrkt, th m-
cl rmlt r l m-ctr skkm, B (HmchlPrh) G. i t, thrr fda-pprv plt aklh-wr dbh (bth Gjrt) rprct api (rg prc l blk qtt, thltr tr t tblt, cpl, tc,
mwhr l). B, thr rtw prt plt r th prc-t jctbl t-ccr rgr ppl t Hpr bsv (bthCl jt vtr prtr).
a rct t t th Cl l plt tht mctr api rxclv ppl t Z ncm, jt vtr rm r bck 1998. Th plt, lct nvMmb, w rlr mctrgrg trmt bt w rctlxp t bl th prct
api
. it xpct t trtapi
prct xt mth, bggwth ptprzl (r gtrc r-r), lrxcm ( p kllr) rpl (r bl prr).
ncm prvtl wglbl phrmctcl cmp wth rtt prtl c
Though Cadila Healthcarewas basically a pharma-ceutical company at its incep-
tion, its management realised
somewhere along the way that
consumer health products,
cosmetic items and nutritional
products would grow rapidly
over many years into the u-
ture. This gave rise to a series
o wellness products such as
Nutralite (a orm o low calo-
rie butter), Sugar-Free (a sugar
substitute and Everyuth, a
beauty product. The business
grew steadily in size, until Zy-
dus Wellness was hived o into
a separate company,
publicly held and
listed on the stock
exchanges.
All three product
groups cater to the
rising middle class
in the country, who
have a higher disposable in-
come than the earlier gen-
eration, and this generates a
demand or health-enhancing
products. This is why Sugar-
Free and its related products
Sugar-Free Dlite (a sot drink)
and TeaLite have
captured an 80 per
cent market share in
the country.
Similarly, Nu-
tralite has got wide-
spread consumer ac-
ceptance amongst
health conscious amilies as
a healthier alternative to but-
ter, being cholesterol-ree
and having no trans-ats or
hydrogenated ats.
All this has helped Zydus
Wellness to post a sales rev-
enue o`268 crore (net proft:
`45.27 crore) in FY10 up
rom a mere `31 crore in FY06.
The management claims that
it would become a `500 crore
company in the next 3-4 years.
It has a market capitalisation
o `2,150 crore, with Zydus
group, the promoters, and
Pankaj Patels amily holding
about 72 per cent. u
Wellne qotent
Joshi: managing the people Belapure: in charge of production
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tch p l `31.6 crr
Fy10, jt tw r tr t bt.a mprtt mlt th
rgr w Cl rct gr-mt wth abbtt ic, ccrg twhch abbtt wll lc 24 brgrc Z 15 k mrggmrkt, whr abbtt h trg grwg prc. Th gr-mt l cl pt r tl 40 prct t b clvr th trm th cllbrt.Th m tht abbtt wll hvth rg mctr t Cl
trtll pprv prctplt ll thm th mrggmrkt r th abbtt br.
Th prct wll b mctrb Z Cl r abbtt t t tt--th-rt mctrg clt i. Whl th l llw ZCl t lvrg t rbt rgltrppl, vtv vlpmtl c-pblt mctrg trgth,t trgth abbtt glbl pt,blg t t rthr cclrt t
mrgg mrkt grwth.
Gg rwr, w hll k prtrhp wth mlttlcmp, mb th 10-11mjr plr erp, shrvlPtl, g tht thr rt t gl-blt wl rch pk rm2015 wr.
Investors delightalg t r th glbltg, Cl h crt mtpt r tl th mtcmrkt wll, whch tch rv-
`
1,700 crr Fy10. Thk hr pt lrhp mc r hrt , g-tv rr, wm hlth brthg-rlt lmt. Th vr mch kpg wth th b-rvt mr hlth xprtbt th pr ltl rr(bt, hgh bl prr, hrt ccr) mg i rct r.
i-lcg rrgmt wthBr schrg Phrm, Bhrgriglhm, ncm, Bxtr Gzm ic hv hlp cmt tpt, h th l rc 4,400 th lrgt th c-tr. itrtgl, th rm bgxp b bt 2.5 pr ct vrqrtr. ev th, w hv lgw t g, coo Gh nk,c cmp rprttv hvmg t gt tch wth bt120,000-130,000 prcrbg ctr,whl th ttl mbr llpthcctr i bt 400,000.
Th vtg cmmt h l
tk t th cmp c-tt rcr. i t ltt rrchrprt jt lt mth, qtbrkg h agl Brkg ,Cl rprt t l `1,106crr (r th Jl-sptmbr qrtr),p 21.2 pr ct r--r, h r tmt `1,067 crr,rv b th mtc rmlt,us Brzl rmlt b.
it mtc rmlt bct t tprrm th -tr, t elr scrt bt th
cmp prrmc th qrtrjt g b. Th elr rprt l tht wth th t 400 lppl 20 w (prct) lch-, th cmp h chv 19 prct r--r grwth th c- qrtr Fy11 18 pr ct th rt hl Fy11. a pr th m-gmt, c crvclr rprtr gmt lg grwth mtc rmlt. Hwvr, tblv tht th cmp t-bl grwth wll b mt t 15pr ct r Fy11-13.
a th cmp mtr rthr,t gttg r t bcm trlrrch-b cmp wth tw ptt mc, l r-pt t cc grc mc th brv w wrl btch-lg-b mc. n wl b rpr th chvthr trgt grwg t thr tm crrt z th xt v rwtht t mch clt.
usuMiT GHosHaL
Institutions
17.52%
Shareholding pattern
Non institutions
7.69%
Promoter and promoter
group74.79%
CIRCLE OF LIFE
High technology in action