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Dr Reddy says India is prime target for company’s inorganic growth


With growing concerns about the reality of climate change and environmental risks, companies around the world are focusing on their environmental, sustainability and governance (ESG) goals.

Big pharma Dr Reddy’s Laboratories held its Investor Day on June 21, when the company highlighted sustainability, ESG goals, innovation plans and more.

The company has listed a “Horizon 1” strategy that hopes to address short to medium-term growth and a “Horizon 2” strategy that hopes to address and identify growth drivers from a long-term perspective.

The company said it hopes to continue targeting double-digit revenue growth, 25% EBITDA margins and 25% return on capital employed over the medium term.

In an interview with CNBC-TV18, GV Prasad, Co-Chairman and Managing Director of the company, said competition and pricing pressures are the main risks to the growth of the US market.

“The generic business in the United States has always been driven by price. It’s a commodity market and when there’s more supply than demand, prices go down and they go down. What has changed is the number of actors operating in each of the molecules. What used to be 5 or 6 ANDA per molecule has moved beyond 10 and this is putting pressure on prices,” said Prasad,

He expects revenues from the Chinese market to double over the next five years.

“China is an important market, but its size is not comparable to our presence in the United States or India. So it’s a relatively smaller game for us. However, there is significant growth because the denominator is small. In the next five years, we should double or more China’s revenue,” he said.

According to Prasad, India is a prime target for the company’s inorganic growth.

“It’s our home market, we want to grow our ranks here and so we’re putting a lot of capital into M&A in India. If you see the last 2-3 years, we’ve been programmatic in terms of acquiring small brands and businesses in the Indian market. We will continue to drive this. We are also finding other growth areas like nutraceuticals, OTC and even digital platforms,” ​​he said.

Prasad added that they hope to grow at a higher rate in India through the innovation initiatives undertaken by the company.

“The company will have more capital allocated to India and will lead many innovation initiatives in India first. So overall India will get more attention,” he added.

Speaking about the company’s sustainable development goals, he said it aims to achieve gender parity by 2035 and expects women to be appointed to at least 35% of leadership positions.

“We’re aiming to make the whole world fairer and a lot of that revolves around gender parity. So giving women more leadership roles. We’ve said we have to have at least 35% women in leadership positions. We aim to achieve gender parity by 2035 and that’s a tough goal, especially in a company where women aren’t very prominent in the manufacturing systems. So we’ve taken them in charge and we’ll do our best,” he said.

Watch the accompanying video for the whole discussion.

cnbctv18-forexlive

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