Mylan will provide Matrix global footprint: Malik

Excerpts from What's Hot on CNBC-TV18 Watch the full show »

Right from the beginning, Matrix Laboratories' has been a story of growth and an acquisition driven growth. This company has not seen stable earnings but is always growing - not just from Indian API units but has also gone out and explored R&D as one of its growth drivers. It has invested in a Swiss research company called Explora and every year it has been doing some magnificent deals.

Analysts feel that there are growth triggers all over the place and this company has been able to identify them and taken the benefit of those growth triggers at the proper time. But with EBITDA being flat for three years, what is the potential for growth left for Matrix? Discussing this is CEO, Matrix Laboratories, Rajiv Malik.

Excerpts from an interview given to CNBC-TV18

Q: There have been a series of companies, largely American and some European buying up Indian companies for their backend support. How long do you think this cost advantage will last simply because you are buying a backend from a low-cost producer?

Malik: I don't think it is all about cost advantage or vertical integration only. It's becoming  about availability of the excellent scientific talent pool, which we have in India around this industry. It is also about some very meaningful assets, which have been created by Indian entrepreneurs, and in no time, the Indian industry has made a mark for themselves as far as the generic space is concerned. So, I think it is beyond the cost advantage although cost is a part but more than cost, it is the intellectual property which has been created.

Q: For the last three years, Matrix's EBITDA has remained almost flat. What are the new growth triggers for your company?

Malik: Although the EBITDA has been flat, but one also needs to benchmark the EBITDA of this industry and what EBITDA levels it can support. So, there are one-two products, which give you exceptionally high value, but we have been performing above the industry average.

We are fairly de-risked. A couple of years back, Citalopram brought in 50% of our revenue and whereas today, it is about 8% of the revenues. Regarding growth, last year we closed at 146 million and this year we closed at 266 million and going forward, we expect to grow at 25%-30% rate. Therefore, we have been increasing the topline, de-risking the portfolio. A year back, it was only a API driven company but today we have generics API, generics FTF (first to file), which is the doc-pharma business, we have a separate anti-retroviral business.

Q: In Europe, Mylan doesn't have too much of a presence. What is the strategy going forward, will Europe be an important focus area?

Malik: Absolutely. Mylan doesn't have anything in the US and so doc-pharma can be used as the entry point and that is where the global footprints for Mylan can start. Doc-pharma can be the entry vehicle for Europe. Mylan has an excellent product portfolio, and if you bring in those products to doc-pharma, then suddenly the real value can be unleashed. Similarly, the doc-pharma portfolio can be used to further expand the footprints into Europe and that is how you start getting into different markets, and start creating Mylan-European business.