Bullish on domestic market: Elder Pharma

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Bullish on domestic market: Elder Pharma

In an interview to CNBC-TV18, Alok Saxena, joint managing director of Elder Pharma says, he is bullish on the domestic market. “On the domestic front, we are still growing at about 25%. All our brands are growing at 25%. This segment will continue to be the major growth driver for the company,” he adds.

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In an interview to CNBC-TV18, Alok Saxena, joint managing director of Elder Pharma says, he is bullish on the domestic market. "On the domestic front, we are still growing at about 25%. All our brands are growing at 25%. This segment will continue to be the major growth driver for the company," he adds.

He further says, the company is seeing a little bit of pressure on its Bulgarian subsidiary. "We are quite bullish that in the next few months this subsidiary could turnaround," he adds.

Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.

Q: We understand that your business in Europe is seeing some amount of stagnation. Could you take us through visibility you have had on Q3? What it's looking like? When do you see a pick up over there?

A: We are only seeing a little bit of pressure on our Bulgarian subsidiary. That is affecting the European business as a whole.

Next quarter, the European subsidiaries follow January to December scenario. The UK subsidiary is on target, Bulgaria is down by about 15-20%. The pressure across Europe is at the moment little bit higher and we can see that on our number.

As we go forward, we are very confident that the UK subsidiary will be on target, but we are not very confident on Bulgaria being on target for the next two quarters. By the third quarter of the next financial year, I think Bulgaria will get back on track, but there is still going to be a lot of pressure for the companies. The Euro at this moment is under a lot of pressure. All sectors across Europe are under pressure at the moment.

Q: Can you break up what sort of problems you are facing in Bulgaria?

A: It is a little bit of slowdown in the economy, nothing to be concerned about. We are very bullish on that sector. We are waiting for a re-approval of our plants from the local authorities. That could happen in the next three-four months. Once that is done, we will be able to get this subsidiary back on track. It's been a little bit of slowdown and it's across the all companies, it's not only the Elder Pharmaceuticals in Bulgaria.

We are seeing a bit of slowdown. As we go forward, we are quite bullish because off late Bulgaria has become the choice of supply to all countries, especially countries like Greece and Spain, which are facing a lot of economic pressure. They are now actually looking at outsourcing products from Bulgaria and Romania. So, we are quite bullish that in the next few months this subsidiary could turnaround.

Q: You are looking to enter Japanese market. We believe you have already received accreditation from the Ministry of Health. What are the plans? When do you hope to begin exporting there and what kind of a market share are you targeting?

A: We just got the first part of the approval. The plans have been accretive, but we will not see any revenues before 2014 from the Japanese markets. It's another two years before the first revenues come into that market.

Q: The other big trigger possibly would be for the domestic market. How exactly are you doing your top five plans at this point of time?

A: On the domestic front, we are still growing at about 25%. We are quite bullish on the domestic market. All our brands are growing at 25%. This segment will continue to be the major growth driver for the company as we go forward.

Q: Do you have any plans to add to the API business going forward or would you continue to concentrate on the formulation business?

A: Japanese market is a complete API entry for us. We are working only through the APIs in the Japanese market. While we are looking at Japan, we are also working in France and Germany.

Q: There are some reports that indicate that the debt-equity of the company is a bit uncomfortable at this point in time. What the debt levels stand at? What the plan would be on possibly reducing it?

A: It's roughly Rs 600 crore. We did an NCD last year to rework that. We are going to be doing one more NCD to rework on it, but we are not so worried about it because we have a plan in place. Based on the sale plans, which we have for the next financial year, we are quite confident that in the few months this scenario will change for us.