Highlights of the Call by Capital Market:
The Revenues grew by 10% YoY to Rs 834.27 crore for the quarter ended September 2013 driven by the robust growth from the APIs (26%) despite the moderate growth from the Formulations (6%).
The Domestic Formulation grew by moderate 5% YoY to Rs 276.17 crore for the quarter ended September 2013. Also, the Exports Formulation grew by 7% to Rs 362.64 crore for the same period.
The Generic business grew by 32% YoY to Rs 176.83 crore for the quarter ended September 2013. However, the Institutional business fell by 22% YoY to Rs 101.35 crore for the same period.
The Europe market grew by 19% YoY to Rs 85.9 crore for the quarter ended September 2013. However, the US & Canada grew 26% YoY by 60.65 crore for the same period. The CIS& Russia business is down by 16% to Rs 35.52 crore during the quarter.
The margins are higher and had positive impact due to currency gains, positive inventory impact (40% are imports, benefited inventory valuation), and the rest is due to the better product mix and higher realizations during the quarter. If the INR-USD remains at the current levels it expects the 2-2.5% improvement in the margins for the H2 as well.
It had partially impact due to the New Pricing Policy in the Q2 and expects gradually come over in the coming quarter. It expects to have Rs 25-27 crore for the FY’14. The impact due to the Pioglitazone is Rs 4 crore for the H1’FY14.
It further indicated that the issues related to the trade margins are not solved at continue to sell at the lower margins in the domestic market.
It has got price hikes from the Government for the 2 products as part of NLEM policy during the quarter and few more are pending expected to come for approval in the November 2013.
Overall Anti-malarial business fell by 40% during the quarter.
The Anti-malarial business contribution is higher in H1 (23% in Q1, 46% in Q2) compared to the H2(22% in Q1, 9% in Q4). It has not done well in the in the Anti-malarial business but the rest of the business grown well. However, it indicated that it has not lost any market share in Anti-malarial business.
The US FDA found acceptable the Company’s oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh. This will enable the Company to commercialize oral solid dosage formulations in the US market from this formulations manufacturing facility. It expects the shipments to start in Q4’FY14. Once this facility commences, It expects the incremental business to the US market will be Rs 80-100 crore for FY’15.
It has filed 36 ANDAs and received approval for the 20 products (commercialized 9) with US FDA as on 30thSeptember 2013.
On 505b2 project, it indicated that clinical trials are undergoing and NDA filing will take 15 months.
It expects the API’s business to grow 10-12% for the H2’FY14.
It expects domestic sales to grow by 15% (Industry to grow by 10%) for the H2’FY14 due good to growth in its therapeutic areas.
It expects 20% growth in Sales for the FY’14 with 200 bps improvement in margins.
It is confident to achieve the earlier target for the Anti-malarial Institutional business for the FY’14.
It targets revenues from the Anti-malarial Institutional business to be in the range of Rs 440-460 crore by FY14, Rs 500 crore by FY15, Rs 600 crore by FY16 and Rs 800 crore by FY’18.
It expects the Capex to be Rs 300-325 crore for the FY14. The majority of the Capex will go to the expanding the formulation facilities.
The Outstanding hedges were at USD 70 million, Out of this USD 20 million for the FY14@ Rs 58 per USD and USD 50 million for the FY’15@ Rs 63 per USD.
The Consolidated debt slightly increase (due to the revaluation) to Rs 676 crore as on 30thSeptember 2013 compared to Rs 676 crore as on 30thMarch 2013.