Dear shareholders, good morning, and a very warm welcome to the fortieth Annual General Meeting of NATCO Pharma Limited through video conferencing or other audiovisual facility. As a reminder, for the smooth conduct of the meeting, the members will be in the mute mode, and audio and video will be opened when they will speak at the AGM as per the pre-registration. Please note that as per the requirements, the proceedings of the annual general meeting will be recorded and available on the website of the company. I now hand over the proceedings to Mr. C.H. Venkat Ramesh, Company Secretary and Compliance Officer of NATCO Pharma Limited. Thank you, and over to you, sir.
Good morning, ladies and gentlemen. I, C.H. Venkat Ramesh, Company Secretary of your company, welcome you all to the fortieth Annual General Meeting being conducted through video conferencing. The meeting is live streamed through webcast. I now request our respective chairman, Sri G.S. Murty, to the meeting.
Good morning, all. I'm attending this video conference from the registered office of the company.
Thank you. I now welcome Sri V.C. Nannapaneni, Managing Director of the company.
This is Nannapaneni. I am attending the meeting from our registered office, NATCO.
I now welcome Sri Rajeev Nannapaneni, Director and CEO of the company, to the meeting.
Good morning, everyone. My name is Rajeev Nannapaneni. I'm attending our board AGM today from corporate office. Thank you.
I now welcome Sri S.V. Annarao, Chief Financial Officer of the company.
Yeah, good morning, ladies and gentlemen. This is S.V. Annarao, Chief Financial Officer of the company. I'm attending this meeting from the corporate office of the company in Hyderabad.
Thank you. I now welcome Dr. T.V. Rao, Independent Director and Chairman of the Nomination and Remuneration Committee, to the meeting.
Morning, everybody. I am attending this meeting from my sister's residence in Hyderabad. Thank you.
I now welcome Sri D.G. Prasad, Independent Director of the company, to the meeting.
I'm D.G. Prasad, Independent Director, participating in the AGM from my residence in Hyderabad. Thank you, all.
I now welcome Dr. M.U.R. Naidu, the Independent Director of the company, to the meeting.
I'm Professor Dr. M.U.R. Naidu. I'm actually Independent Director of NATCO Pharma Limited, and, I'm joining this, audiovisual conference of the annual general meeting from my house in Motinagar, Hyderabad.
Thank you, sir. I now welcome Dr. Leela Digumarti, Independent Director of the company.
Yeah, good morning, everyone. I'm Dr. Leela Digumarti. I'm attending this meeting from Jaipur. Thank you.
Thank you, ma'am. I now welcome Sri P.S.R.K. Prasad, Director and Executive Vice President, Corporate Engineering Services of the company, to the meeting.
Good morning, everyone. I'm P.S.R.K. Prasad. I'm joining this AGM from our Mekaguda unit.
Thank you, sir. I now welcome Dr. D. Lingarao, Director and President, Technical Affairs of the company.
Good morning, everyone. I am joining this meeting from my Mekaguda office.
Thank you, sir. I now welcome Dr. Pavan Bhat, Director and Executive Vice President, Technical Operations of the company.
Morning, I'm Pawan Bharat, and I'm attending this meeting from the NATCO Kothur facility.
Thank you, sir. I now welcome Sri Vikas Somani, Partner, B S R & Associates LLP, Chartered Auditors of the company, to the meeting. I now welcome Sri Kiran Kumar B, Proprietor, BK & Associates, Secretarial Auditors of the company, and also acting as scrutinizers for the e-voting process of the meeting. I now request our respected, our chairman, Sri G.S. Murty, to commence the proceedings of the meeting.
Good morning, ladies and gentlemen. I welcome you all to this 40th annual general meeting. I am informed that 38 members are present for the meeting through video conference. I declare that the requisite form is present, and the annual general meeting is open for commencement.
I now request Sri Rajeev Nannapaneni, Director CEO, to read out the chairman's speech.
Thank you, sir. Dear shareholder, very warm welcome to all. On behalf of the board of directors, I welcome all of you to the 40th Annual General Meeting of the company. I'm delighted to state that in, in that the year in review that brought remarkable growth in our company's business, as we navigated through difficult times around the pandemic and the business challenges during the time. This performance of the company was supported through consistent commitment to quality, nurturing of our technical strength, and pursuit of marketing, market expansion strategy. Our financial performance highlights the progress that we have made and inspires confidence for years to come. During the year ending March 31, 2023, our consolidated total revenues stood at INR 2,811.7 crores, and net profit after tax was INR 715.8 crores.
The increase in revenue and profits for the year were driven by growth in U.S. business and performance from subsidiaries in Canada and Brazil. Our Crop Health division has begun its journey, contributing with strong growth potential. Our company recorded domestic formulation sales of INR 374.9 crore during financial year 2022-2023. During the year, we have launched 11 products across three key segments. As we continue to expand our NATCO reach, we started to cover a much wider base of doctors, including general medical practitioners. NATCO's carefully selected products needs to be leveraged with strong reach to doctors and patients. We firmly believe that the strategy will pay good dividends for growth of domestic business. Revenue growth in the international business during the year was clear outcome of the company's core strategy focused on select few molecules.... work diligently for years and create blockbusters.
We witnessed a total export revenue of INR 2,230.4 crores, of which formulation revenue was INR 2,003.2 crores, balanced from exports of active pharmaceutical ingredients. Although majority of the revenue came from exports to the U.S., there was a good diversification of revenue with contribution from subsidiaries in Canada and Britain. The emphasis on aggressively expanding to new geographies, we hope to maximize return on investment, carefully selected markets. So we are widening our reach internationally to diversify source of revenue. We are in the process of registering key products in the MENA region and have plans to increase number of subsidiaries. Through the year financially in 2023, our company launched in India, the agro blockbuster product, chlorantraniliprole, which has formulation and its combinations in liquid and granular form.
The company has created a strong presence among competitors in the industry due to significance of its product selection. Post-launch, we are making our presence felt at the distribution and farmer level through several field marketing and advertising initiatives. We now establish a strong sales team in key agrarian states across the country as we continue to increase more person, build business processes at front and back end. Apart from CTPR and its combinations, we are working on unique pipeline of products for both domestic and international possibilities. Your company has proactively invested state-of-the-art R&D manufacturing infrastructure to ramp up the supply of critical medications across the world with an emphasis on quality and global compliance. The R&D team comprises of over 465 highly skilled employees, who are proficient researchers, scientists, and product specialists.
They are deeply committed to enhancing our intellectual property through innovation and dedication. Our first-to-market and first-to-file status demonstrate our patient-centric actions. During the year, our expenditure in R&D amounted to INR 195.9 crore. We spent 8.3% of our standalone revenue on R&D, a continued importance to business. Your management has established clear sustainability agenda that emphasizes the importance of water, wastewater, waste and energy management. We're constantly striving to make advancements in these areas. Financially, 2022-23, about 27.51% of our total energy requirements is met through renewable energy sources. Our people and the relationships we build with communities are the foundation on which we grow and prosper as an organization.
Employees are key to our success, and as a result, we invest critically resources in ensuring that we are employer of choice in all regions where we operate. NATCO's corporate governance at the heart of its management approach. We believe that our governance framework supports a high-performing, respectful culture and is underpinned by our values of integrity, openness, and quality. NATCO Trust is striving to tackle important societal issues by uplifting disadvantaged communities and fostering inclusivity and equality. Through the year, 12,000 students were supported through 121 hunger bites. A comprehensive approach strives to promote healthy practices and raise awareness about nutrition, mother, child and health, and non-communicable disease and prevention measures. We initiated two mobile clinics and two satellite clinics at Kothur and Ayyer have benefited over 30 villages collectively. At NATCO, we value our people.
We are able to hire and retain best talent and provide work environment where each person can thrive. It is through our people, culture, that we create products and help customers. As of March 31, 2023, our company's market capitalization stood at INR 10,285 crore. During the financial year, company issued three dividends, INR 5.5 per share, which amounted to dividend payout of INR 100.4 crore. Dividend payout stood at 15.76% of standalone profit. I would like to extend my heartfelt gratitude to our employees for the passion and commitment they have shown during the year, and to our shareholders for their continued support in our endeavors. We also thank our financial institutions and various regulatory authorities for their support and guidance. We continue to work with our key stakeholders and prioritize the sustainability.
We do our part to ensure a healthier tomorrow for future generations to come. I thank one and all. Thank you so much.
Thank you. Thank you. I seek the shareholders' consent to the notice of AGM and also annual accounts for the year 2022 and 2023, and to take the auditor's report as read. As the report of chartered auditors is unqualified and without any adverse observations or comments, with your permission, I take the auditor's report as read. I request the company secretary to read out the contents of agenda items for the meeting.
Thank you, sir. The agenda items of the meeting are: agenda item number one, adoption of audited annual financial statements for the financial year 2022-2023. Item number two, to confirm 3 interim dividends aggregating to INR 5.50 per share paid on equity shares during the financial year 2022-2023 as dividend for the financial year 2022-2023. Agenda item number three, reappointment of Sri Rajeev Nannapaneni as a director liable to retire by rotation. Agenda item number four, reappointment of Sri P.S.R.K. Prasad as a director liable to retire by rotation. Agenda item number five, ratification of the remuneration of cost auditors. Agenda item number six, revision in the remuneration of Sri V.C. Nannapaneni, Managing Director. Agenda item number seven, revision in the remuneration of Sri Rajeev Nannapaneni, Director and Chief Executive Officer.
I now request Sri G.S. Murty garu to further proceed.
Thank you. The company has provided e-voting facility to the members from 26th September 2023, 9 A.M., to 28th September 2023, 5 P.M., to enable them to exercise their right to vote. For the members who are not aware of the remote voting, remote e-voting facility, can now cast their vote to e-vote electronically during the video conference. The results of the remote e-voting and e-voting during the annual general meeting, along with the scrutinizer's report, will be intimated in stock exchanges within 48 hours of the conclusion of the meeting, and the same will be uploaded on the company's website. I now request the shareholders to raise any questions on the reports and accounts.
I request the moderator to call the names of the shareholders who got registered to speak at the annual general meeting, one after the other, and unmute their mics.
Thank you very much. We will now begin with the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. In the interest of time, may I request you to restrict your questions or comments to two minutes. I now invite the first speaker shareholder, Prafull Chawda. Please accept the prompt on your screen, unmute your audio and video from your device, and proceed with your question. Ladies and gentlemen, we will wait for a moment while Mr. Chawda-
Yeah, Sir?
Unmutes his connection.
Sir, am I audible?
Yes, sir.
Chairman, sir, board of directors, my fellow shareholders, आज NATCO की meeting में मैं बहुत खुश हूं कि company का investor को अच्छा return मिल रहा है। यह साल के अंदर share का rate INR 650 था और INR 950 तक गया। यानी कि 50% share का rate increase हुआ। Result देखे तो result भी बहुत अच्छा आया और result में देखने को मिला कि company आगे बढ़ रही है। Sir, मैं यह पूछना चाहता हूं कि company नया क्यों product लेकर आ रही है? वो product से कौन से-कौन से client बनेंगे और कौन सी-कौन सी country में जाएगा?
इसके बारे में बताएंगे, ताकि हम लोगों को पता चले कि हमारी company कितने country में यह नया product भेजने वाली है। आने वाले festival की शुभकामनाएं चाहता हूं। Secretary department ने मुझे time पे AGM report hard copy भेजे ताकि मैं पढ़ सका। All the board of directors, company secretary को बहुत-बहुत धन्यवाद।
Thank you, sir.
Thank you very much. I now invite the next speaker shareholder, Santosh Kumar Saraf. Please accept the prompt on your screen. Unmute your audio and video from your device and proceed with your question. Ladies and gentlemen, we will wait for a moment while Mr. Saraf unmutes his connection.
माननीय सभापति जी, उपस्थित निदेशक मंडल, सदस्य गण, अधिकारी गण और कर्मचारी गण, मैं संतोष कुमार सराफ कहूं, सराफ प्रह्लाद आप सभी को नमस्कार करता हूं। आशा करता हूं, आप जितने भी अधिकारी और डायरेक्टर हैं, इस समय इस बात से होंगे, sir. मैं उन कर्मचारी भाई-बहनों का भी आभार प्रकट करता हूं, जिनकी कड़ी मेहनत का फल है कि आज हमारी कंपनी इतना अच्छा result दे रही है। उनसे प्रार्थना, इसी तरह काम करिए, और अच्छा result मिलेगा। आपने जो dividend दिया, उसके लिए मैं बहुत-बहुत धन्यवाद देता हूं, sir. मैं एक छोटा, दो प्रश्न पूछें। एक तो company की जो performance है, इसको continuous रखने के लिए क्या कदम उठा रहे हैं, sir? और income growth के लिए क्या कदम उठा रहे हैं, sir? दूसरा, sir, women empowerment के लिए क्या कदम उठाया?
Abhi percentage female kaafi kam hai. Iske baare mein bataiyega ki kareeb mein 4,000 karmchaari, unka main aabhaar prakat karta hoon, lekin usmein female ki percentage kaafi kam hai. Sirf aapke 8% female hain, to inke baare mein kya kadam uthaya, bataiyega, sir, jyada. Aur sir, artificial intelligence ka kya apne improve kar sakte hain, iske baare mein bataiyega, sir. One rainwater harvesting ke liye kya kadam uthaya aur renewable, renewable energy ke liye kya kadam hai, yah batajiye ka shat kariyega, sir.
Sir, main jyada kuch nahi, aap jitne bhi director, adhikari, karmchari aur worker, unki, unki family ko 2023 ki shubhkamnaen deta hoon financial year ki, aur bhagwan se prarthna karta hoon financial 2023, 24, aap sabhi ke liye aur aapki family ke liye aur jitne bhi unki family ke liye healthy, wealthy ke saath de. To sir, agle saal hum mile to naye saal, naye growth aur nayi income ke saath mein milenge. Jai Hind, Jai Bharat. Sir, physical meeting karne ka bhi option rakhiyega. Namaskar.
Thank you.
Thank you very much.
Thank you.
Thank you, sir.
Thank you very much. The next speaker, shareholder Shrikant Jawa, has registered, however, did not join the AGM. We will move on to the next speaker, shareholder Rangan Venkataraman. Please unmute your microphone and proceed with your question.
Are you able to hear?
Yeah, we can hear you, sir. Please go ahead.
You're able to hear, no?
Yes. Yes, Mr. Rangan, please go ahead.
Oh, okay. But I'm at the airport. Okay, but I would like to know that for the last five years, our market capitalization and the share price is hovering around INR 800 only, and we have not created really what the market capitalization is. Why? It's the paramount duty of the promoters to create market capitalization. But what about the import alert papers about the FDA regulations are rejected or somebody is filing some suits and we are getting... And what are the prospects for the next three years? I would like to know that. I think you have gone for a very big expansion. I think for the result of that, which quarter it may arise, actually.
Otherwise, I don't suspect or integrity of the promoters, but I would like to know what is the business model, why it's going on like that. Somebody is filing and then the rejection, all these things. As a layman, we are not able to understand that. What will be the future growth for the next two years? That's all I would like. Thanks.
Thanks.
Thank you very much. I now invite the next speaker shareholder, Yusuf Yunus Rangwala. Please unmute your microphone and proceed with your question.
Sir, a very good morning, sir, Chairman, sir. Sir, NATCO Pharma does not require anything, sir. You are the world, world ranking of us, world ranking of the first one number is pharmaceutical, but we are the one leader in all division, sir, and we are an excellent company, sir. Dividend track record, dividend bonus, everything of you want to a shareholder. Sir, share mala maal kar diya sir. Amara company which I invest with you, I'm very happy and very proud to be shareholder. Or Vijay event, dhanyavad karo kam hai sir. They are very hardworking, very company, jo unka sir event bahut achcha hota hai. Vijay hota hai, hame koi gham nahi hai sir. Na dukh, na hame gam, na, na kabhi, kabhi hamesha khushi hoti sir unke saath mein.
Vijay wale ke saath mein judke hame bahut khushi hoti hai, aur unki service sir lajawab hai. Aaj subah unhone phone kiya ki aapka event chalu ho raha hai, aur aapka number aa raha hai. Chairman sir, aap direct point pe aata hu. Total number of staff kitna hai factory mein? Sir, we are having a factory at Hyderabad. Sir, I would like to arrange, I would like, I am, I am very interested to see your factory. And sir, nothing more to it. Sir, ho sake, aap mujhe factory visit karaiye, aur sir, aapke saath mein sir bahut khushi hui milke. Aur Chairman sir, aapne mein chance diya, mauka diya, aur Diwali ka sab aapko shubhkamna deta hu, Dussehra, sab tyoharo ka aapko shubhkamna deta hu. Phoolon ki khushbu, kaliyon ki bhar, aur sir aap Diwali mein aap bhulna mat, sir.
Kuch bhi sir, aapki taraf se achcha gift bhejna ho, hame yaad rahe sir. Thank you very much. May God bless our company. Thank you very much, sir. Jai Hind, sir. Jai Hind, sir. Vande Mataram. Bharat Mata ki Jai! Thank you. Thank you. Thank you.
Thank you very much. I now invite the next speaker shareholder, Sanjay Banik. Please accept the prompt on your screen, unmute your audio and video from your device and proceed with your question. Request to all the speaker shareholders to please restrict your questions or comments to two minutes.
Hello, am I audible?
Yes, sir. Please proceed.
Yeah.
Okay, sir. Okay, sir. Sir, hello, I am Sanjay Banik from Kolkata, the City of Joy. I am a shareholder of Natco since the year 2011. Since then, I have not visited any AGM, either physically or attended any AGM, virtually. So this is my first AGM of Natco, and I had a wish to see V.C. sir and Rajeev sir. So I, my wish has got fulfilled. Sir, I have some questions. Our company has posted highest ever revenue. So how sustainable is this? Will we see double-digit compounded annual growth in sales and profit in coming 5 years? What is your guidance regarding this? If further price erosion happens in U.S. market, so how our company will tackle this?
So number 2 question is, our domestic formulation business is not performing well over the years, as revenue from this is decreasing year after year. So what are the main reasons for this? Number 3, sir, on the API side, we know that India has a good opportunity over the coming years to grab the market share because of reduced reliance on China, on API supply. So how our company is looking at this opportunity? My question number 4 is, non-oncology revenue is also decreasing over the years. So what are the main reason of this? Is there any lack of innovation or our company's product cannot compete with others? My next question is, sir, what is the costly product of our company, most costly product of our company in oncology segment?
Is it of lung cancer, liver cancer, or anything else? Next question is, sir, as the core production business is getting bigger of our company, shall our management will consider to demerge the business in future? That's all, sir. I have full faith of the management of the NATCO, so it has generated a quite amount of wealth for me over the years. So I wish a better performance of the company in future. Thank you, sir.
Thanks.
Thank you for getting.
Thank you, Sanjay. Bye. Thank you, sir.
Thank you very much. I now invite the next speaker shareholder, Kamal Kishore Jawar. Please unmute your microphone and proceed with your question.
Hello, meri awaaz aa rahi hai, sir? Okay, thank you, sir. Hamare Chairman, sir, all ladies and Rajeev Saab ko namaskar, aur aaj jo video conference hai, bahut achcha hai, sir. Is company mein toh main IPO aaye jab se shareholder hu, aaj 25 ke upar ho gaya mere ko. Jab humare ko capitalisation mein 100 ka bhi 20 hua, split hua, sab kuch hua. Bahut achcha return mila sir, shareholder ko. Aur hamara secretary department ka bahut achcha service hai, sir. Hum kabhi bhi kuch mail karte hai, humare ko balance sheet aa gaya. Bahut achcha service hai unka. Aur aaj se toh Diwali, Dussehra ki shubhkamna deta hu. Aapka chairman seat bahut achcha laga, sir.
Aur main chahta hu sir apna result badhte ja raha hai, kuch bonus ka dekhiye. Bonus, give you at least 100 with 50 shares, then we will do very good, and our dividend also, interim dividend which is everything is good, sir. And our colleague Suresh Chand will talk to you.
Honorable Chairman, sir, present all the directors and shareholder colleagues. Sir, yesterday, due to Ganesha Visarjan program, internet was not working properly, therefore, I am talking to you from this phone, sir.
Hello, sir, my name is Shrikant, sir. I am also attending, sir, but there is a little problem in the link. Your chairmanship and interim, which my colleague shareholder said about the bonus, keep the bonus, sir. On this occasion, Dussehra, Diwali wishes and our RTO also, RTO people have very good service, sir. Thank you.
Thank you. Thank you, sir.
Thank you very much. Next speaker shareholder, Afzal Mohammed, has registered, however, did not join the AGM. I now invite the next speaker shareholder, Ramesh Manguluri. Please unmute your microphone and proceed with your question.
Hello. Am I audible, sir?
Yes, sir.
Yes, Ramesh, sir.
Sir, good morning, everyone, sir. I am Ramesh Manguluri speaking from Hyderabad. Hello.
Go ahead, Ramesh. Yeah, please go on.
Sir, so, first of all, I would like to congratulate the management for excellent performance. Sir, I have three questions, sir. Till now, what percentage of Pomalidomide has been sold? It's number one. Number two, sir, agrochemicals, how the things are shaping up? How are you planning to grow this field? And third one, sir, I understand that you are planning to... You are planning for acquisition, whether it is domestic or overseas, and what, what would be the size of the company? I would like to know. Thank you very much, sir.
Thank you. Thank you. Next caller, please.
Thank you very much. Next speaker shareholder, Anil Babu Bhai Mehta, has registered, however, did not join the AGM. The next speaker shareholder, Gundluru Redappa, has registered, however, did not join the AGM. The next speaker shareholder, Abhishek J, has registered, however, did not join the AGM. We'll move on to the next speaker shareholder, SVRB Shastri. Please accept the prompt on your screen. Unmute your audio and video from your device and proceed with your question. Ladies and gentlemen, we will wait for a moment while Mr. Shastri unmutes his connection. Mr. Shastri, please unmute your microphone-
Uh.
and proceed with your question.
Hello?
You are audible, sir.
Okay. Good morning, everybody. Congratulations on the good set of numbers. We are very much happy with the dividend you created to us. My question is, there is some talk of erratic monsoon this year. What is the impact on the CTPR sales? Is it on the expected lines or above expected lines or below? What is the impact? And the second question is, some years back, one analyst mentioned that NATCO is having a very good land bank in Hyderabad. What is the... How much land bank we are having, and what is the value? If you declare this, it will enhance the value of the share in the market. Thank you very much, and I wish you all the best in your future endeavors. Thank you very much.
Thank you. Thank you. Thank you.
Thank you very much. The next speaker shareholder, Satish Chandra Shantilal Doshi. Please accept the prompt on your screen. Unmute your audio and video from your device and proceed with your question.
Hello, am I audible?
Yes, sir, you are audible. Please proceed.
Yes, you.
Yeah, sir. Thanks for the opportunity. I have sent the questions over mail. I'll just read those out, sir. Thank you, sir. So the first question is, what is the market size and likely launch date of our different FTF products, FTF products? Second question is, sir, what is the status of suit relating to Pomalidomide? What is the legal status of the appeal relating to ibrutinib, and have we appealed to the higher courts? And sir, the next question is, could you please provide details about the new products in the pipeline for the Brazil and Canada markets, including a timeline for their expected launch? Also, how was the performance of both the markets during the first two quarters of FY 2024?
Sir, the fourth question is, could you please outline the strategy for launching new products in our pharmaceutical division in India? Are we planning to continue with our current approach of introducing the products at you know highly affordable prices, or are we considering to shift to towards launching them at market prices moving forward? How did onco products perform last year and the growth going forward? Sir, just a moment. Which are the non-oncology brands and the growth prospects of the same? Sir, what is our planned business model for agrochemical sector, and are we considering direct sales to customers under our brand for all, or will we primarily engage in B2B transactions? What is our production capacity, capacity utilization and asset turnover in agrochemical sector?
Sir, what is our intended strategy for the launch of upcoming agrochemical products? Are we planning to follow the same approach of patent challenge as we did in CTPR segment of patent challenge? Sir, the next question is, to what extent is our distribution channel in the Indian agrochemical business is efficient, and how can we leverage our existing distribution network from the pharmaceutical business to enhance our presence in agrochemical sector? Sir, what synergies are anticipated from acquisition of PSAFE and ISCA Inc., Delaware corporation? Additionally, could you please provide information on allocated budget for such acquisition going forward? Sir, with a substantial cash position on our balance sheet, are we currently evaluating options such as additional share buybacks, increased dividend payouts, or discussions regarding potential new acquisitions?
Sir, thank you so much and all the best, sir.
Thank you.
Thank you very much. Request to all the speaker shareholders, in the interest of time, may I request you to restrict your questions or comments to two minutes? I now invite the next speaker shareholder, Bharat Raj Kankanala. Please accept the prompt on your screen. Unmute your audio and video from your device and proceed with your question. Ladies and gentlemen, we will wait for a moment while Mr. Kankanala unmutes his connection. Mr. Kankanala, please unmute your microphone and proceed with your question.
Hello, sir, I'm Bharat Raj.
Yes, sir, you are audible.
I'm audible, sir?
Yes, sir.
Good morning,
Sir, your audio is breaking. We can't hear your audio clearly.
Managing Director, Mr. Rajeev. Wonderful performance, sir, and taking my company to the next level. My chairman is very generous. He's giving in time. Regular dividends, he's. Thank you very much for the way you're paying the dividend payouts and the way you expansion our company into the next level, sir. Thank you very much, and you are very generous in CSR. You are giving funds for the cancer hospitals and cancer patients. Thank you very much for your generous, sir. I thank my secretary service, Chairman Ji. In time, my secretary send me the annual report and link also. He's always active 365 days. I thank my CFO, Mr. Chappa Rao Garu, and his team, Mr. Dasaru, they are always successful. Thank you very much. Chairman, sir, once again, my best wishes to you.
Sir, you should live 100 years, sir, because you are taking the NATCO company next legacy. Thank you very much for giving this opportunity. Sir, if it is possible, next year we'll have a physical AGM, sir. Once again, my best wishes to you. All the best, sir. Sir, Mithri, one of my shareholder, Redappa Gundooru, is there. Due to technical reason, he cannot attend. Sir, shall I give it to him? Chairman Garu, I am also a recent speaker.
Yes, sir, please proceed.
Please proceed.
Sir, thank you, sir, for giving this opportunity. Sir, thank you, sir, for giving this opportunity. Sir, Board of Directors, CMPs and auditors, my company secretary, good morning, namaste, sir. This is Redappa Gundooru speaking from Hyderabad. As a shareholder, I'm very proud about the company performance and financial 23, sir. Chairman, sir, you have given a very wonderful speech about my company performance financial 23. We came to know a lot of information about my company progress, future, and present also. Sir, as a request for the physical annual report, I received it within a couple of days from the company secretarial department. Thank you so much for wonderful services. After receiving the annual report, I found that there is a wonderful figures, numbers, and wonderful colorful information in this, sir. Thank you so much and for wonderful progress.
I found out there is a wonderful corporate governance maintained by my company, especially transparency of account, transparency of ethics, with good values, morals, and also the good manner. So overall, I can say there is an integrity there in my company. Thank you so much, sir, for a wonderful the hardworking employees, CFO, and leadership. My company is transparent governance. Thank you. Sir, yes, sir, we are growing a wonderful financial performance, sir. Thank you so much. The board has a very good growth mindset. Thank you so much. I don't want to speak in much on this financial. Here, my question is, sir: what is your next financial vision, in couple of years? What is the new projects, sir? These are only observations. I don't want to ask any financial questions.
I don't have find any financial questions over here. So everything you find in annual report, sir. Sir, Dasari Garu and Prava Garu, sir, there is no single blast pattern company, sir, since inception in IPO. So wonderful leadership, sir. We believe in the leadership, sir. Go ahead, sir, take appropriate decision for company growth. I have already viewed all the resolutions, sir. Thank you so much for the company security department, sir, always available, and they are very good manners, giving the importance to the shareholders. Very strength, a strong investor relations they are having, sir. Thank you, sir. I'm concluding, sir. Sir, wherever required, sir, please encourage the women empowerment, women leadership, women employment, sir. This is my humble request. Sir, we have faith on the board, trust on the board. Go ahead.
Sir, I wish you the good, and sir, the chairman, under your leadership, sir, we will achieve many more higher awards in coming financial year, sir, and also financial targets of financial 2023 also. That's the reason I wish you the good health to you on the board and all the key players of company, not only you, sir, all the hard employees also. Thank you so much for giving this opportunity. Signing off.
Thank you. Thank you.
Thank you very much. Speaker shareholder number 13, Abhishek J, has reconnected. Please accept the prompt on your screen, unmute your audio and video from your device, and proceed with your question.
Sir...
Sir, you're audible. Please proceed with your question.
Can you hear me, sir? Am I audible? Sir, my name is Abhishek, shareholder in the company. My DP is-
Sir, you are not, your audio is not clear.
Oh, my God. Sir, my name is Abhishek, shareholder in the company. My DPID is 0.37. Client ID is 41359155. So first of all, I congratulate the management on the eve of 40th Annual General Body Meeting. I trust all is well with you and your family in this challenging situation. Our company deserves much more respect than the current market cap. After completing more than a decade of successful operations, profitability, and becoming one of the strongest brand in the respective segment. Sir, as of date, how many employees do our company have? I would like to know from you, sir. And what are the steps being taken by the management to reduce the other expenses, legal professional charges, and the audit fee?
So then myself and my team are running a legal firm in the name and style of someone who associated with sending the request and response to kindly enroll our firm in the empowerment of the company, and we'll be glad to extend our services, sir. So then, I would request the management to kindly consider hybrid AGMs in the years to come, sir, because of the digital challenges in the virtual platform, most of the senior citizens are not able to join in this virtual AGM because of digital challenges. So you can consider a hybrid AGM if local shareholders can join you physically, planning shareholders can join you virtually. You can get the valuable points and suggestions and ideas that will be helpful for the management for our future, sir. So kindly try to consider hybrid AGM.
The serious energy platform. Every exercise is rewarded, and when we get access to the... You are supposed to update the information of documents like release to members.
Sorry to interrupt you, Mr. Abhishek. Mr. Abhishek, this is the operator. Sorry to interrupt you.
The members can very well inspect these documents 30 minutes prior to the meeting and up to the conclusion of the AGM, and they may not reach out to you at a later stage seeking for all these documents. But it is updated online, some, certain, most of the companies are doing it, sir, so I would request you to kindly-
Sir, your audio is not clear to us.
Nothing much to ask, sir. I would request the management to kindly take care of the official part of the Investor Relations Week. Kindly arrange for a plant visit for the Investor Relations Week, sir. Then, I thank the company secretary and our entire team for sending me the link well in advance and making this fortieth Annual General Body Meeting a grand success. I wish the company and the board of directors a great success and prosperity in the coming future. And thank you for giving the opportunity, sir. Hope to see you in the physical AGM. Thank you. Thank you very much.
Thank you very much. The next speaker shareholder, Keshav Garg, has registered, however, did not join the AGM. That was the last speaker shareholder. I now hand over the meeting to the chairman for further proceedings. Over to you, sir.
Yes. So what I'll do is, there are a lot of questions, so I'll split among all the directors. So first, I request Mr. Prasad to answer the question on the renewable energy and the water, what we call waste management, program. Mr. Prasad, can you just ask, address that question to shareholder, please?
Yeah. Yeah. I can say that we have a very extensive program for the renewable energies. We already have two windmills, and we have about 6 megawatts solar power, and we are adding some more for other units also. We are also concentrating on the parabolic dishes, where we can have hot water. We are also exploring for the steam generation, that is for our formulation plant, as well as our Chennai plant, where we can utilize, substitute our furnace oil and diesel oil with solar energy. So this is on the renewable energy front. When it comes to the water management, as you rightly asked, we have extensive programs, and we already have, we are doing in couple of units, especially the rooftop water management.
We are collecting the very good rainwater. Directly, we are collecting it onto our storage tanks, and we are reusing for our boilers and cooling towers, where we don't have to do any further treatment. This is one of the good initiatives that is yielding, and we are extending this to all other units also. And we have a lot of storage facilities we have created, and we are utilizing this rainwater for our cooling towers and for our internal gardening and for other purposes. So this is on the waterfront. We are doing as far as possible, that to the maximum extent that is possible. Thank you.
... I request the CEO to address Mr. Shanti Raj Chandra Doshi's questions. Give you a moment to address.
Yeah. The market size and likely launch of the different field products. We have been announcing the launch of products from time to time. The market size would be a very extensive exercise, give it to you. And with regard to Pomalidomide, we have already mentioned that this is a case without merit. So we have also not launched this product. The launch of the product will happen sometime in 2027. So with regard to the question on the pipeline for Brazil and Canadian markets, we have almost about seven products in Brazil which are in the pipeline for approvals, about 10 products in Canada.
So the performance of the Canadian and Brazilian subsidiaries, we had a very good performance in the first quarter, almost about INR 50 crore turnover in Brazil and about almost INR 60 crore in Canada. They are doing very well and contributing for the growth of the company. With regard to your question on the affordable prices, our endeavor has been that for quite a long time, and we continue to do that. And with regard to the onco products performance last year, about 5%-10% growth is there in oncology products. And anyway, because this is one of the principal therapeutic divisions of the formulation, we continue to focus on that in the domestic market as well as in the international markets.
With regard to your question on the agrochemical sector, whether we're doing B2B, and actually it's a mix of mainly primarily our emphasis is C to B2C, and we are also doing B2B for certain major customers, but predominantly 80% of the business comes from the B2C. Regarding the strategy for launch of the agrochemical products, this, whether it is with the patent challenges or otherwise, it will be a mix of both, because we need a basket of products for running the business to be with the distributors and the farmers. So we continue to focus on both the patent challenges as well as the normal regular products.
We also, with regard to your question on the leveraging the pharmaceutical distribution business to the agrochemicals, these are two independent sectors, so we cannot mix both of them. And we have a reasonably good setup for the agrochemicals. In a very short time of about nine months, we have built a good setup, and we are stabilizing it. Definitely, wherever there is a scope, we are working for increasing the efficiency of this. With regard to PSAFE, it is a woman hygiene products, which we have invested, and they're slowly growing, and we are hopeful that this business will grow very well. And ISCA Inc. is actually it is not an additional investment, it is an investment made almost a couple of years back.
Since they are selling this business to some big multinational company, so we have used our like you know the conditions in the agreements, and additional shares have been issued to us to maintain the value of our company. Yeah, and we own about 6% shareholdings, which is in minority, but we are confident that investment will have value added. With regard to the cash position in the balance sheet, there are no further plans for the buyback. Definitely, we would pursue certain opportunities for acquisition when we like you know get them at a very like you know optimum level, where we can grow with those acquisitions and should not become a burden to the company.
Dr. Pavan, can you just speak about our portfolio that we're working on in our R&D, and what is our vision for the business? A few lines, please.
Thanks. So for R&D, we are focusing on multiple products along the same strategy where there is a difficult to develop or difficult to manufacture or have some inherent barrier to entry. With that, we continue to build on that. And mainly, about, say, about 60%-70% or greater of our portfolio is focused on oncology, trying to leverage our strength in India and as well as the past few products that we've launched in our subs in Brazil and Canada. So we continue to build on that. And we are definitely trying to extend some of the difficult products that we have developed for the U.S. or into other markets like Canada and Brazil, where we have our own sub. And we've also started recently extending this to some emerging markets.
So we work on oral solids as well as injectables, and we've also now increased our footprint into more complex products like peptides and oligonucleotides. And in peptides, these are harder to develop products because they are called as combination products with a device, either a reusable pen or an auto-injector. So we are continuing to increase the development in the area of complexity, as generally referred to as complex products. So you know, these are inherently got some barriers to entry. We are increasing the-
... scope as well as the geographical diversity for our products in terms of development.
Thank you, Pav. Thank you so much. So let me address the question on income growth and woman participation. I think we're expecting good growth in the next few years, and I think a lot of the growth is driven by the products that we launched. And I think we have some good launches, that's the reason why we're seeing good growth right now. And woman participation, yes, I think we should definitely improve, and I think that is something, it's a very valid criticism. I think we need to work hard, and I think to enhance our participation. I think we'll definitely devise policies which encourage woman participation. And I'm hopeful that over the next few years, we're able to see the difference and increase in participation. During the last...
The gentleman asked us in the last five years, you know, market cap has remained flat and has not increased so much. So I think there, I think the challenge has been our portfolio. I think our portfolio has declined dramatically because, oh, there are two challenges we have had. One is our domestic portfolio has declined dramatically because Hep C has become zero. It used to be about INR 500 crore a year, and has dropped dramatically. And that's the reason why you've seen a dramatic drop in the domestic sales. Otherwise, the other businesses have done well, but it's been a large hole to replace because Hep C is a cure, and that's the reason why we're unable to recruit new patients. And regarding export, there's been a tremendous amount of price erosion in the U.S., which has affected our core business.
However, I think we have, you know, revived it with our new launches and with our geographic expansion. We believe that I think there'll be more stability in earnings this round compared to what happened in the last few. It's the nature of the beast, and I think that's how it works. Mr. Yusuf asked whether he can visit the factory. I think, certainly, he can. He can work with our, in, investor relations and our company secretary. Whenever the, the shareholders are welcome to visit, we can always arrange a visit. I can address bonus shares and all. I think we will look into it. Certainly, I think, we, we can just certainly consider that. I think we want to enhance shareholder value.
As you're aware, we did a significant buyback, which has enhanced shareholder value, and we're giving good dividends. And we look at all measures that can enhance shareholder value. The gentleman asked about Lenalidomide, percentage and all. I think generally because the earnings are going to be finalized, I don't want to answer that question. I think we'll have better clarity for our September earnings. I think we'll speak during the conference call at that time how we have done in Lenalidomide. Regarding agro, agro, I mean, one gentleman asked whether has the erratic monsoon affected us? Yeah, but luckily for us, we have started from zero, so I think, you know, anything that has been a bonus because it's a for us. Overall, as the industry has struggled because of erratic monsoon, you're absolutely correct.
But fortunately, because we have come from zero, you know, our sales have done extremely well, and the product portfolio that we have has taken very good market share. And I'm proud to say that we have done extremely well, and we are doing very good campaigns in strong agrarian states like Maharashtra and the Telugu states. I don't know if you ever have a chance to watch Marathi or Telugu channels. Agro products are constantly advertised in the news channels, so that we can bring more coverage and penetration to our products. And so we are doing very well, and I think we have spoken in the past that we expect this division to do about INR 150 crores-INR 200 crores, and we are on track, and everything looks good.
And regarding monetization of the land bank, I think some of it has been monetized over a period of time, and I think it has been reflected in the earnings from the past. Actual value of land bank and all, I, I don't have numbers off of my head. I think it's a very dynamic situation. We have some assets that we can monetize, and I think we're looking at different opportunities, but as of now, there's no clear plan as such. Regarding the vision for the business, I think the business is going to be very competitive. I think as Pawan said, we need to do complex generics. Second, have geographical expansion, and spend on R&D to just expand the portfolio. And I think these three things are gonna work. Commodity business is extremely difficult today because of the nature of our pharmaceutical sector.
I think, people, my personal belief is the commodity products, even though they're important, the margin that you can get in this business has become, has declined dramatically and will continue to decline. One gentleman asked about the vision for the API business. The API business should do well, in my personal view, in CMO and doing niche R&D API products, which are oligonucleotides, oligopeptides, and then in niche kind of type of APIs. Commodity, I still am not that excited. I mean, I might differ from the general market view, but I still think doing the niches in the high technology barrier ones is where the real money is, especially in the generic side. Number of employees, we have a little less than about 5,000 employees in our system.
I think we did some, you know, right size some VRS program, which have dropped our employees by about 15% in the last 1 year. I think, I think we are the right size for our scale of revenue. In terms of capacity utilization, I think we are around, depends on which particular segment. I think API, I think, we are doing some expansion, doing enhance the capacity in our Chennai and Nagarjunasagar units. Finished dosage, relatively, we have good capacity because we have a backup facility in Vizag, so I think we're relatively okay there. But, and I think we always have a INR 300 crore-INR 400 crore CapEx, which can just, upgrade our facilities and enhance where we are, capacities in areas where we're short. Regarding legal expenses being high, I...
This is part of our game. I think we do a lot of legal litigations to get early entry into the market where we are able to make money, and sometimes depending on the cycle of the litigation, sometimes the bills tend to be high. This, you know, you can't—we can rationalize by, you know, strategically spending money on more interesting assets, but that itself won't drop dramatically because it's the nature of the business, and you have to spend legal; otherwise you can't clear the way to launch products. I think we have addressed most of the questions. I again thank you, everyone. Thank you. Thank you for attending.
Thank you, sir.
Thank you.
As the business for this fortieth annual general meeting is completed, I thank all the shareholders once again for joining the meeting and for their cooperation through transacting today's business. I thank all the stakeholders for their continued support. Thank you very much.