Span Diagnostics targets Rs 100cr revenue this year

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Span Diagnostics targets Rs 100cr revenue this year

In an interview with CNBC-TV18’s managing editor Udayan Mukherjee, Veeral P Desaim, MD, Span Diagnostics, spoke about the latest happenings in his company and sector.

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In an interview with CNBC-TV18's managing editor Udayan Mukherjee, Veeral P Desaim, MD, Span Diagnostics , spoke about the latest happenings in his company and sector.

Here is a verbatim transcript of the exclusive interview with Veeral P Desaim on CNBC-TV18. Also watch the accompanying video.

Q: Could you give us the sense of your business, what did you derive your Rs 80 crore revenues in FY10 from principally?

A: We are primarily into diagnostic reagent manufacturing. Our 80% of the revenue is from this reagent, remaining is from 20% is from instrument what we import and trade, so that is how Rs 80 crore constitutes of.

We are also a larger partner in government programme for Malaria and HIV test. We have been supplying to government programmes since last eight years that is our strength.

Q: Your first quarter revenues jumped about 50%, how scalable is this business, how swiftly can you scale it from the level that it is yesterday?

A: The way our product portfolio and things are structured, I think in domestic market, I see a limitation of growth; I don't think it can grow more than 25%. But as we are focusing now heavily on exports there the scalability is tremendous because we are contemplating entering into at least two-three territories, direct marketing set up and also planning to enter into US market by 2012. So, there the scalability is tremendous. Otherwise, in India, the market is growing at 15%, we have been consistently growing at around 17-20% during last ten years. So, in India the scalability might be limited, but overall as a company there is good potential.

Q: Today 10% of revenues come from exports, how fast can you scale up exports can expand and are margins higher too in expert business?

A: Fortunately because of our low cost manufacturing capability, the margins are still higher. We are giving good competition to primarily China in the cost competitive scenario. So, margins are more or less in line with the domestic market, nothing very high, nothing low.

Q: So, do you think you can do Rs 100 crore of revenues in 2011?

A: Yes, we are hoping for that, our target is Rs 100 crore. And with regards to exports, I think what we are targeting is 40% of revenues should be from exports in the next five years, that is our aim.

Q: And on Rs 100 core of revenue, if you achieve that, do you think you can report Rs 10 crore of profit after tax (PAT)?

A: Approximately Rs 8 crore is the estimate.

Q: How much of revenues do you expect to derive from government programmes because I believe you executed tenders worth about Rs 28 crore in FY10 from the government programmes?

A: Yes, this year also the government orders will be to the similar tune and they are already in pipeline. Most of it, we have exhibited till September. That is why Q1 business was higher by 40% because last year we got the tender in Q3, which we are executing till September. So, first half the sale will be higher. Second half again new tenders are already in discussion and it will be materializing in couple of months. So, if we get it then again there is very positive outlook overall in the turnover side.