Pranav Amin, director, Alembic Pharma expects the pharma company to post an EBITDA of 20 percent in FY14. Amin's views come on the back of healthy set Q1 numbers.
In an interview to CNBC-TV18, Amin adds that the company, despite the drug pricing policy, will grow at 15 percent. "There will be a marginal impact because of the pricing in the domestic market. Internationally, we should grow in excess of 35 percent and inspite of the domestic pricing we should continue a growth of 15 percent or so in domestic as well,” he adds.
The company posted an EBITDA of 16.7 percent in Q1, up from the 14 percent it declared the same time last year.
Below is the edited transcript of Amin's interview to CNBC-TV18.
Q: Can you just breakup how the domestic formulations did for you this quarter along with your exports?
A: Our domestic branded formulations was up 15 percent in the quarter which was better than the market and that is what we expected. International generics were up 86 percent which was very high for us and overall, the revenues were up by 16 percent at Rs 429 crore.
Q: What kind of margin performance did you do this time around and what would the sustainable run rate in EBITDA performance be through the course of FY14?
A: In terms of EBITDA performance we were at about 16.7 percent compared to the same quarter last year which was about 14 odd percent. So, it has been a healthy EBITDA improvement. If one sees the last couple of quarters, we have been going up. In terms of guidance, we believe a 20 percent growth in EBITDA is what we expect in this financial year.
Q: With regards to the domestic formulations can you throw some light on how exactly you all managed to beat the industry considering that a couple of other companies and the most recent example would be Lupin which have actually underperformed the industry or maybe reported sluggish domestic formulation sales growth simply because of the new pricing policy etc. coming in. What did you all do differently? Are you not affected by the new pricing policy?
A: No, we are definitely affected by the pricing policy. Alembic has historically always been very predominant in the acute and anti-infectives which is growing at a much slower pace than the rest of the market. We realised that we have been investing a lot in the specialty segments. So, if one sees ophthalmology, cardiology, diabetology, nephrology, gynaecology are all new areas for us where all the specialty segment are growing at about 26 percent. Ofcourse it is on a smaller base, but this is helping our growth and changing our portfolio from a more acute to a specialty portfolio.
Q: If you had to extrapolate this quarter's performance into the entire year in terms of a top-line, do you think you can recreate that 15-20 percent growth that you saw last year or do you think you can better that because of the reasons you alluded to?
A: A couple of things will happen. One, there will be a marginal impact because of the pricing in the domestic market. Internationally, we should grow in excess of 35 percent and inspite of the domestic pricing we should continue a growth of 15 percent or so in domestic as well.