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FROM CMD'S DESK :
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 Dear
Fellow Shareholder
These are exciting times. India’s economy is on the fulcrum of an
ever-increasing growth curve. With positive indicators such as a
robust 9.4 per cent growth in the GDP, benign inflation (less than
3.5 per cent), rising income levels thereby causing healthy demand
for goods and services, robust corporate investments,
ever-expanding forex reserves and a vibrant capital market, the
Indian economic growth engine remains in top gear. With an average
GDP growth rate of over 9 per cent, ours is, today, the second
fastest growing economy in the world.
Growth during 2006-07 was primarily led by the manufacturing
sector. This is reflected in the buoyant 11.7 per cent growth
recorded by the Index of Industrial Production (IIP), driven mainly
by a robust 12.7 per cent jump in the manufacturing index.
At INDOCO…
Keeping pace with this overall positive trend, Indoco too recorded
an impressive performance for the year 2006-07. Revenues earned
during the year amounted to Rs.34,443 lacs, 27.7 per cent more than
those earned during the corresponding period a year ago. A healthy
expansion in the top line was well complimented by a robust growth
in profits. At the net level, they were up by 33.50 per cent to
Rs.4,204 lacs.
The performance for fiscal 2006-07 was largely driven by exports,
which recorded an increase of 62.1 per cent to Rs.7,002 lacs,
accounting for 20.30 per cent of the total sales as against 16.02
per cent in the fiscal 2005-06. The growth in exports emanated from
buoyancy in the formulations business as well as surge in volumes
of APIs.
Fiscal 2006-07, was also a landmark year as regards strategic
initiatives that were well supported by investments in setting up
new facilities and strengthening Indoco’s R&D capabilities. My dear
fellow shareowner, these are seeds of our future growth.
We also invested heavily in augmenting the infrastructural
facilities in 2006-07. The formulations manufacturing facility at
Baddi in Himachal Pradesh was expanded by commissioning a liquid
manufacturing block. Further, the formulations development and
analytical research departments at the newly commissioned
state-of-the-art R&D facility at Rabale near Mumbai, were
significantly enhanced to add capabilities for Novel Drug Delivery
Systems (NDDS). We now have over 100 scientists working at this R&D
centre. I am confident that these additional facilities will go a
long way in aiding your company’s growth and development.
On the Domestic Front…
Indoco’s strong presence in the domestic market was accentuated
with the launch of SPERA, a new marketing division. This is the
company’s fifth marketing division. I am confident that along with
the existing divisions: Indoco, Spade, Radius-Surge and
Warren-Excel, it will contribute substantially to the company’s
domestic sales and its overall growth in the forthcoming years.
Through specialty divisions, your company has managed to reach a
wider range of doctor specialties thus ensuring a good development
of its brands and new products.
And Internationally…
The tie-up with AMNEAL, a US based generic company, for developing
and marketing ophthalmic products is a huge stepping stone towards
establishing Indoco’s presence in the international arena. The
joint venture, I believe, will propel your company’s efforts in
carving a niche for itself in the highly regulated, but
significantly lucrative US market. Notably, your company is among
the very few in India to have a US FDA approved ophthalmics plant,
giving it a substantial head-start vis-ŕ-vis Indoco’s domestic
peers.
Another big achievement on the international front has been the
coveted ANVISA approval from Brazil for the company’s manufacturing
facility at Goa. Also, during the year, Goa Plants I & II were
inspected by the South African authorities and the MCC approval is
eagerly awaited. These developments will provide your company’s
international business greater momentum in the years to come.
Indoco prides itself on having a dedicated and hard-working
workforce. Your company’s success would not be have been possible
without the continued efforts of its 2719 employees.
Finally, I would like to extend my gratitude to our customers,
bankers, vendors and above all, our shareholders for reposing their
faith in us. We shall strive hard to live up to and exceed the
expectations in times to come.
SURESH G. KARE
Chairman & Managing Director
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