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Mar 22, 2013, 05.36 PM IST | Source: CNBC-TV18

To clock Rs 1500cr in revenues for 2013-14: Shasun Pharma

Shasun Pharmaceuticals has big capacity expansion plans for 2013-14. Speaking to CNBC-TV18, managing director Abhaya Kumar says the company is planning an investment of more than Rs 250 crore towards achieving this aim.

We are talking to the bankers to raise Rs 100-150 crore for the coming year 2013-14 because we have large investment plans and growth plans

S Abhaya Kumar

MD

Shasun Pharma

Shasun Pharmaceuticals  has big capacity expansion plans for 2013-14. Speaking to CNBC-TV18, managing director Abhaya Kumar says the company is planning an investment of more than Rs 250 crore towards achieving this aim.

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In terms of funding, Kumar says it will be mostly through the debt route and not by equity infusion. "We are talking to the bankers to raise Rs 100-150 crore for the year 2013-14 because we have large investment plans and growth plans," he told the channel. 

For 2013-14, the company expects revenues of around Rs 1,500 crore and EBITDA levels of about 15 percent, Kumar says.

Below is the verbatim transcript of Abhaya Kumar's interview on CNBC-TV18

Q: The news is that 15 lakh warrants have been converted into equity shares by your company and that has helped you get Rs 112 crore, where will that go, directly to reduce your debt?

A: Yes, this will directly go for reducing our debt.

Q: What will the debt come down to?

A: Debt-equity ratio will be around 1.55. After this infusion of the equity into the company the debt equity which used to be around 1.58 will come down to around 1.55.

Q: Do you have more fund raising plans to reduce your debt further?

A: Yes, we are going through a major expansion plan. The company has invested more than Rs 170 crore last year. For 2013-14, we have large investment plans of investing more than Rs 250 crore to complete our Vizag plant or backward integration for Ibuprofen plant and then expansions in Pondicherry.

The sevelamer project which was almost getting delayed by a year, the good news is, the project will start off by December 2013 itself. So the launch is happening in the first quarter of 2014 and customers have started placing orders for sevelamer carbonate, sevelamer hydrochloride.

Q: Will Rs 112 crore be ploughed into the expansion of various plants like Ibuprofen plant, the Vizag plant, the Cuddalore plant or will a part of it go to repay your bankers?

A: There is some misconception, let me clarify it. This is only Rs 15 crore warrant, total money raised is Rs 15 crore.

Q: Will you be raising more money to complete expansions as well as to service debt?

A: It will be mostly through the debt route and not by equity infusion. We are talking to the bankers to raise Rs 100-150 crore for the coming year 2013-14 because we have large investment plans and growth plans.

Q: What would fund raising do to your interest costs by the end of FY14?

A: By FY14 because of the profitability and good EBITDA that we are projecting for 2013-14, I think debt-equity ratio will still be around 1.55-1.50.

Q: Last quarter your UK business was under significant stress, revenues came down sharply close to about 25 percent, profits also fell off quite a bit. How is the UK business shaping up now?

A: UK business is doing well. There has been a revenue drop of around 15 percent but we are still maintaining the EBITDA levels because of the new projects that have kicked in. For the year 2013-14 also, we look at the same number of 36-37 million pounds with a good EBITDA. So the new projects that have come in, have helped us to get equivalent to whatever loss of business we have had. But the compensation is already done by the new business that we have got.

Q: Can you give us some guidance on how you will end the year in terms of revenues and in terms of EBITDA as well any guidance at all for FY14 considering the expansions that have been lined up?

A: For FY12-13, I may not be able to give you the guidance now because the year is under closure and people are working hard to ensure that we deliver the numbers. If you look at it our revenues for 2013-14, it will be around Rs 1500 crore and our EBITDA levels are going to be around 15 percent.

Shasun Pharma stock price

On September 16, 2014, Shasun Pharmaceuticals closed at Rs 189.00, down Rs 11.15, or 5.57 percent. The 52-week high of the share was Rs 234.35 and the 52-week low was Rs 67.70.


The company's trailing 12-month (TTM) EPS was at Rs 6.05 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 31.24. The latest book value of the company is Rs 52.55 per share. At current value, the price-to-book value of the company is 3.60.

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