Jul 07, 2011, 05.34 PM | Source: CNBC-TV18
Dr Anuj Saxena, managing director of the company said, "We expect to generate revenues of approximately Rs 30-40 crore from the launch of a men's deodorant called Octane."
Meanwhile, he dismissed that advertising expenses would hit profit margins as the company is witnessing strong volume sales. “Going forward, we expect to maintain growth rate of 40% over the next three-four years,” he stated in an interview with CNBC-TV18.
Below is the verbatim transcript of his interview with Ekta Batra and Reema Tendulkar. Also watch the accompanying video.
Q: You had launched a deodorant in February of this year, could you tell us how things are progressing over there and how much of revenue are you hoping to garner from this deodorant in particular?
A: The brand that we launched is called Octane. It is basically targeted for the men’s deodorant market, which is one of the biggest and fastest growing. In the past two years, we had launched several deodorants in this space and the strategy worked for us. We are expecting to generate revenues of about Rs 30-40 crore at the bear minimum.
Q: On advertising cost, what are you spending in terms of for this particular brand and how much would it comprise of in total sales?
A: In terms of sales for this brand, we are looking at Rs 30-40 crore. We have just finished a huge campaign on television and now there is an out go campaign for the brand. The response has been terrific for the product because we have got different identification for the brand in terms of fragrances. We have tied up with the French company. We have launched a brand in five fragrances which has led to upbeat sentiment for the product.
Q: What about the rest of the fiscal? What have you planned in terms of the OTC segment?
A: Elder Healthcare’s focus in the last three-four years has been building up company in skin care, hair care and team management of our products. The idea is to expand these portfolios. So far, the focus has been on international brands but this year onwards we are focusing on our own brands. Octane is first and we will be launching 3-4 more products in our own names and portfolios.
Q: Could you tell us how FY12 would look like and thereafter FY13 once all these products come into the market and not only in terms of revenues even in terms of the profitability if you could give us some idea because you do have a significant amount of ad spends as well which you have lined up.
A: It is a profitable company. Last year, the company generated at about Rs 113 crore with a net profit of about Rs 2-3 crore and we have bee showing a growth rate of about 40% for the last four years. I am anticipating and hoping to maintain that trend again in the next 3-4 years. We expect to maintain our profits and definitely grow in those for sure. Although the advertising expenses but because the volumes are large I do not expect to hit the bottom-line as such.
Q: Besides the OTC market have something which you operated in terms of prescriptions skin care can you give us an update on that as well?
A: We have two teams besides OTC, which is the bulk. The idea was in the healthcare to go to the entire skin market and do skin care. So, we have two teams which cater to the prescription market of this area and where we promote doctors. It has all these cosmetic surgeons and all its awareness about beauty and wellness.
We have about 200 reps in the field who promote these products to doctors where we have most of our own brands but we also have some international companies. We just launched a range of skin care products with a tie-up with a company in Japan. For skin care, we have launched a range over there and white products. We have tied up with a Germany company to launch skin care products for women and babies called Sanosan.