Class action suit against Caraco baseless: Sun Pharma

Here is a verbatim transcript of the exclusive interview with Uday Baldota on CNBC-TV18. Also see the accompanying video.

Q: How does the company read the status on Caraco and what your move might be especially with regards to the class action suits that have been talked about?

A: We are very early in the class action suit. Caraco has already informed their shareholders that there are some news reports of some cases being filed. Once it gets more active, Caraco intends to defend itself because they believe that these cases are baseless. It's too early in the case right now.

Q: What about your dialogue with the US FDA because that seems to have taken a rather concerning turn?

A: Caraco had shared earlier that they would need to work very intensively with the US FDA. As and when there is an update on that as to what the next steps that they are taking, Caraco might be sharing something. At this stage, there is no further update on that.

Q: You had indicated that you will be revising your guidance for FY10 which at last counts were 13-15%, what would you want to bring it down to for the fully year in terms of sales growth?

A: What we had said is that we are withdrawing the guidance. Once we have more clarity on how the US issue is likely to be resolved, we will consider issuing a new guidance. In the call that we had in the morning with our investors, we have said that we are not yet at that stage. We are currently not giving any guidance, we will continue to watch the situation and at an appropriate time we may consider giving guidance.

Q: So, will your revision be lower?

A: Very difficult to say because unless and until we asses the whole situation it will be very difficult for me to say.

Q: I also heard the management point out in the morning that because of the problems that you faced on the sales, it might be quite variable going into the next few quarters, do you see that as slipping low when you say variable?

A: It is probably being quoted out of context. I think if you go back 4-5 quarters when sales of this nature started for us, we have been cautioning our investors every quarter that some of these sales are clearly one time sales and they don't necessarily be the same in every quarter. To that extent, they really should not form a significant proportion of the overall value that one ascribes to the business. What we are repeating this quarter is basically the same thing that these sales in the past have been fluctuating and they will continue to fluctuate, so there is no change in that communication that was given to our investors.

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