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Feb 25, 2013, 01.03 PM IST | Source: Moneycontrol.com

Budget 2013-14: Need lower taxes on life saving drugs, says Arvind Remedies

Recently RBI has reduced its GDP growth forecast for FY13 to 5.5 percent. This clearly indicates a slowdown in the economy which can be attributed to higher interest rates, rising input costs and constrained investments.

Dr B Arvind Shah
CEO and MD, Arvind Remedies

Recently RBI has reduced its GDP growth forecast for FY13 to 5.5 percent. This clearly indicates a slowdown in the economy which can be attributed to higher interest rates, rising input costs and constrained investments.

Pharma sector's performance in FY13 has been stable. However, we believe that sector has immense potential to grow if in the upcoming Budget government comes out with strong measures to reinstate confidence.

In this Budget we expect government to bring down taxes and duties on the life saving drugs and active pharmaceutical ingredients (API), in-turn providing an impetus to growth.

Currently, a weighted tax deduction of 200 percent is available for the research and development expenditure undertaken in an in-house facility, we expect this to be increase it to 250-300 percent and also expect it to be extended to expenditure incurred on the external R&D undertaken.

Pricing of pharma products is of key importance to consumers and the companies. Hence, we believe that reduction or abolishing the excise duty will make life saving drugs affordable to people. Apart from this increase in the healthcare Budget will provide the required growth to the industry.

Arvind Remedies stock price

On July 25, 2014, at 09:26 hrs Arvind Remedies was quoting at Rs 30.40, up Rs 0.10, or 0.33 percent. The 52-week high of the share was Rs 59.95 and the 52-week low was Rs 30.00.


The company's trailing 12-month (TTM) EPS was at Rs 8.65 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 3.51. The latest book value of the company is Rs 37.71 per share. At current value, the price-to-book value of the company is 0.81.

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