Ankur Drugs expects improvement in bottomline ahead

In an interview with CNBC-TV18, Purnandu Jain, Chairman and Managing Director, Ankur Drugs, spoke about the results and his outlook for the company.

Below is a verbatim transcript. Also watch the accompanying video.

Q: Your interest costs this quarter have spiked up quite a bit, can you just take us through what happened on that front?

A: Till the last year interest was partly capitalized because there was a project going on. This year project has been completed and so entire interest cost has been diverted to profit and loss.

Q: The other thing which has been quite liked by the markets is your margins. There has been an improvement in quarter one. For the rest of the year can you hope to sustain this 21% margins?

A: There will be some more improvement because we are remodeling our sales and production strategy. We are switching over part of our capacity to job work.

Q: What would you margins look like and when do you expect your revenues to scale up because it’s been quite a flat performance for you all this quarter on a year on year basis?

A: In terms of topline, it is flattened. It would remain as last year only. In bottomline there would be improvement because when we switch over to job work, the topline improvement, topline increase would not be that much but it will directly contribute to the bottomline.

Q: What’s the improvement in the bottomline in terms of percentage?

A: Bottomline you can see an improvement of 1% - 1.5% because we would be reducing the cost of interest because there would be no further working capital involvement when we do job work.

Q: You had some capacity expansion for your Sterile section. Can you just update us on what sort of capacity utilization it currently is at?

A: At present it is not beyond 15% – 20% but in next quarter we are hopeful of getting it booked to the extent of 50% plus.

Q: And where is this capacity utilization up tick gone a come from? Are you working with orders?

A: From our exiting customers and new customers as well. The Sterile section, stability and other things take time, these are technical reasons which retail investors and small investors may or may not understand.