Pharmaceutical company Lupin has become the latest entrant to the Nifty and will be indexed from September 28. The stock has been an outperformer over the months and S Ramesh, CFO of Lupin expects the company's domestic growth to be maintained at 22-25%.
In an interview with CNBC-TV18, Ramesh said he is not aware of any competition to the Suprax generic. He added, any other company filing for an approval of a similar generic version has to wait at least a couple of years to reach the market.
Further, Lupin is also looking forward to inorganic growth in Latin America and Russia. Ramesh is also hopeful of acquisitions ranging between USD 100 to 400 million.
Here is the edited transcript of the interview on CNBC-TV18.
Q: First your clarification on Suprax. Apparently a generic version is going to hit the market soon. Is that true, are you expecting some competition there?
A: I have actually not heard about it. In fact Suprax has been generic for quite some time, except that does not really have any competition. We do not know of anybody from India, from other parts of the world who have actually made a filing and even if somebody does that today, it will actually take a couple of years.
We believe that at least for the next couple of years, in the immediate line of sight, there will be no competition to Suprax.
Q: When do you expect to launch the Suprax drops?
A: We have not got approvals for that yet. So it could be possibly before the end of this fiscal.
Q: Can you update us on where things stand with the launch of generic Tricor?
A: We have actually settled with Abbot but, the terms of the settlement are actually confidential. We would not be in a position to talk about that. In any case we do not talk about impending launches. We could potentially be launching Tricor by the end of this fiscal.
Q: Tricor and Clarinex add up to nearly a couple of billion dollars of market opportunity. You think it will kick in sometime this fiscal year?
A: That is correct.
Q: What kind of growth are you seeing from the US market, all things considered and these new launches in?
A: If you look at the past, we have had excellent run in the last several years. Our CAGR America has been well over 35%. If you look at the first quarter of the current year also, the overall growth rate was well over 40%. Given the kind of pipeline that we have, you would know that we have got close to about 173 filings for the US market alone, of which about 40-45 products have been launched.
There is at least 130 products to be launched in the next 2-3 years. So given that we would expect the growth rate to be pretty good, well over 20-25% for sure.
Q: What about the domestic market here in India?
A: If you look at our growth rate in the Indian markets, we have kept up a growth rate of well over 20-22% in the last 4-5 years on the trot. This line of sight suggests that it is possible to maintain this for the next couple of years at least.
Q: You have been talking about your inorganic strategy as well. But that ISTA deal did not work out for whatever reason. Are you close to any such acquisitions in that USD 0.5 billion bracket again?
A: I don't know about ISTA or any other particular proposal. We are looking at various proposals across the world, particularly in America in the band aid play as well as in markets of interest like Latin America, Russia and so on. There would be quite a few proposals that we would be considering at any point of time.
At the same time there is no bravado about anything that we do in terms of our acquisition philosophy. We believe that every proposal has to be reviewed in terms of its own merit. This entire thing is very dispassionate and objective. If the proposition is compelling and alluring, we will certainly look at it. We are not actually unfazed by size itself, be it 100 million or 400 million.
Q: What about the forex front which aided your numbers in the quarter gone by, can you just take us through your strategy and whether you continue to see gains coming in from that front?
A: We are heavily export oriented, close to about 70% of our business is essentially international in character. We are tremendously impacted by the forex movement and when the rupee depreciates, obviously we stand to gain. But that said, if there is too much of volatility then it is always a cause for concern.
Perhaps for example, if the rupee had touched a rock bottom at 55 and we cover that and it goes further down, we obviously are not able to take full advantage of the decline. That said, we actually follow 18 months view in terms of our entire forex policy. So it is a step down kind of approach.
The near term cover near 100% and going forward for the next 18 months you could talk about successive coming down of exposures. Perhaps the 18 months could be as low as 5%. On the whole, we are pretty happy about our overall strategy of covering. It has been a very opportunistic option based intervention system.