Investing in Tomorrow with Strategy and Prudence

The emergence of COVID-19 made FY21 one of the most extraordinary periods of our generation. However, our efforts in the past to achieve optimal capital structure helped us stand in good stead and enabled us to be resilient despite extraordinary disruption. Despite pressures, our financial performance remains strong, built on a platform of solid business fundamentals, a strong balance sheet and conservative gearing. We have endured and adapted to the ‘new normal’. We remain committed to disciplined capital management by allocating capital to value creating strategic initiatives.

Our management of Financial Capital focuses on enhancing shareholder value by maintaining a healthy bottom line, coupled with judicious investments in research and development, capital expenditure and modernization through adoption of new technologies, and continued cost optimization.

This has helped us achieve balanced value creation for all our stakeholders and ultimately serve our purpose of proliferating high-quality, accessible and affordable healthcare for all.

Being in a sector which is subject to strict scrutiny and statutory regulation, we are compliant to all provisions as prescribed. We uphold the highest standards of transparency and ensure that all relevant data is available on government portals and all transactions are reported in a timely manner.

Financial Highlights

Our financial performance for FY21 is presented below. A detailed account of our financial performance can be found in the standalone and consolidated financial statements, presented subsequently in the Integrated Annual Report.

  • Consolidated sales (from continuing operations) of INR 149,270 million in FY21 compared to INR 151,428 million in FY20; a decrease of 1.4%
  • Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) from continuing operations was INR 27,032 million; 18.1% of sales
  • Profit before Tax (PBT) before Exceptional items (from continuing operations) was INR 16,751 million; 11.2% of sales
  • There was no exceptional item for the year
  • Net Profit before Exceptional items (from continuing operations) was INR 12,165 million in FY21, compared to INR 9,088 million in FY20; growth of 33.9%
  • Net Debt as on March 31, 2021 stands at INR 6,626 million, compared to INR 15,118 million as on March 31, 2020
  • Net Debt-Equity for the company stands at 0.05:1 as on 31 March 2021 compared to 0.12:1 as on 31 March 2020
  • Board recommended a Dividend of 325% for FY21
  • Current ratio in FY21 stood at 1.7, similar to that of FY20
  • Interest coverage ratio in FY21 stood at 15.5, compared to 5.5 in FY20

Cost Optimization

With the changing dynamics of the generics market, we believe that cost optimization and prudent capital allocation will continue to be key business imperatives. We aim to continue creating a leaner and more efficient organization. Over the past year, we have made significant strides in our cost optimization initiatives encompassing value engineering, procurement efficiencies, workforce planning and R&D productivity. However, input price rises on other products and sales mix changes eroded visibility of these measures, to some extent. These initiatives have, however, created a strong foundation and our cost optimization momentum will continue with increased rigor in the future.

Introduced in FY20, Lupin’s Project Inspire has led to significant reduction in resource footprint and waste generation, while at the same time providing Lupin with cost savings.

As a result of the Finance Transformation project that was launched in June 2018, the Finance Shared Service Center (SSC) project aimed to transform the delivery model of the Finance & Accounting functions at Lupin. All finance processes across locations, which had a potential for centralization, were transitioned to a new facility at Airoli in Mumbai, India. This has allowed Lupin to reap the benefits of:

  • Cost savings through workforce optimization
  • Operational excellence through adoption of best practices, automation, and process standardization
  • Standard, touch-free invoice processing, and
  • Productivity improvement through Robotic Process Automation

Capital Expenditure

We continued to invest in upgradation of our existing manufacturing facilities to aid efficiencies as well as build capacities to meet future demand. We continue to invest ahead of the curve and have made significant enhancements to our Biosimilar and Inhalation facilities. We invested INR 6,276 million toward Capex requirements during the year for various initiatives for increased automation, digitization, and energy savings. These have further been elaborated in the section on Manufacturing Capital.

Capital Expenditure