Expect around 18-20% growth going forward: Plethico Pharma

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Expect around 18-20% growth going forward: Plethico Pharma

Sanjay Pai, CFO, Plethico Pharmaceuticals says, the company grew about 22% year-on-year. He further says, the company has been growing at a steady rate of 18-20%. He expects similar kind of growth going forward.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Plethico Pharma See previous management interviews See what other Experts & Brokerages are saying about Plethico Pharma Plethico Pharma BSE | NSE 30/05/12 Are Mutual Funds betting on Plethico Pharma?

Plethico Pharmaceuticals has declared its fourth quarter results. In an interview with CNBC-TV18, Sanjay Pai, CFO, Plethico Pharmaceuticals says, the company grew about 22% year-on-year.

He further says, the company has been growing at a steady rate of 18-20%. He expects similar kind of growth going forward.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: If you can begin outlying what you performance was in Q4 and what is the expectation you have in the next fiscal, FY12?

A: The company grew about 22% year-on-year. Generally, the company has been growing at a steady rate of 18-20%. Probably, going forward, we think similar kind of growth, if not the same trajectory, maybe slightly lower trajectory in terms of percentage, but something quite close to where we are right now.

Q: But your margins have collapsed quite significantly about 14.3% versus 25%, your bottom-line is down 71%, what would be the reason for that?

A: You are looking at the standalone or you are looking at the consolidated.

Q: We are looking at the Q4 standalone?

A: On a standalone basis, it's a different issue altogether. The way the Plethico numbers needs to be looked at is from consolidated perspective where it's been pretty stable even in comparison to the previous quarter or even as compared to previous year.

Q: Maybe this is the standalone number, but your revenues while year-on-year, calendar year 2010 was up 22%. If we only took the Q4 for the same set of numbers, it is a revenue growth of only 9%. Is Q4 generating some kind of issues which might continue in CY11 as well? For instance, your employee cost apparently have gone up by about 50% to Rs 44 crore, the purchase of finished goods was also up 50%. Distinctly Q4 showed margin pressures. Will that continue?

A: There has been some amount of margin pressures because of change of sales mix in different geographies. If we take a look at the US, which is one of the major contributors and has contributed quite substantially to our numbers, there has been some amount of margin pressures. Obviously, everyone understands the way the market is in the US currently.

To keep up with the overall working of the company, there has been some amount of sales mix that's got changed. One of the areas that we were looking at growing was a business called essentially pure ingredients, which is we buy that garlic powder and stuff like that, that as a business has grown quite substantially so that has led to some amount of shrinkage in margins. As a percentage although there as been handsome growth in numbers.

Q: So, would you say calendar year '11 will mean 20% revenues and 15% margins. Would that be a way to look at your company?

A: I think that should be more or less the way, it probably would look like. It is premature for me to say that right now. But if we are going primarily on the way historically it's been going on, every Q4 has not been a very strong in terms of the numbers. The numbers have improved, but in Q4 generally there are lot of returns that happens in the US so that also plays a role in getting the margins down.