Jul 29, 2009, 04.51 PM IST | Source: CNBC-TV18

Kyowa to contribute 15% to topline ahead: Lupin

Kamal K Sharma, MD, Lupin, expects Kyowa to contribute up to 15% to the companys topline going forward.

Kamal K Sharma, MD, Lupin

Lupin's Q1FY10 consolidated net profit went up at Rs 140.11 crore as compared to Rs 112.04 crore year-on-year.

Consolidated net sales increased to Rs 1,085.59 crore as against Rs 862.32 crore YoY.

Kamal K Sharma, MD, Lupin , expects Kyowa to contribute up to 15% to the companys topline going forward. It contribute about 12% this quarter. If the overall international business has to contribute more to the growth of Lupin, Kyowa is a very sound engine. As you know it is the second largest pharma market and the due attention is being paid by the government there to promote consumption of generics.

Here is a verbatim transcript of the exclusive interview with Kamal K Sharma on CNBC-TV18. Also see the accompanying video.

Q: What has led to the big jump in sales in terms of formulation business both domestic and overseas?

A: In keeping with our stated objective, we have grown 24% and 25% in topline and bottomline respectively. The growth engines have been US, Europe, India, and Japan. Overall, if you see our international business is about 65% and the domestic business is about 35%.

Q: What kind of sales did you have this time?

A: We had very good growth with sales.

Q: Walk us through what the key product performance has been this quarter?

A: In the US, the branded business grew at 75%. The overall growth is about 40%. In India, we have grown twice the market rate at about 24%, the Japanese growth is about 40%, and the South Africa business grew about 42%. What is heartening about Lupin is that all the business segments have been doing well.

Q: We want to understand the status right now with your Mandideep facility. Are you still in dialogue with the United States Food and Drug Administration (USFDA)? Has any progress happened?

A: Yes, a lot of progress has taken place. We have carried out a lot of enhancements in our facility in Mandideep. We have had face-to-face meetings with FDA to share what we have done. I think we are on the right track and are very confident of getting it resolved as soon as possible.

Q: Are things on track for your generic Lotrel as well?

A: We are awaiting approval. There were some questions from FDA which had been answered and thereafter there are no questions. Now, we are awaiting approval from FDA.

Q: Could you walk us through what the operating profit margin performance has been this time? Is it more subdued compared to the previous quarter or have you seen a recovery?

A: It is almost at the same level. I think corresponding quarter it was 20% and this quarter also it is 20% although the research and development (R&D) spent has gone up by 0.8%. In terms of sequential quarters, it was 20.6% and now it is 20%.

Q: How soon do you expect to see a resolution with the differences that currently exist over the Mandideep facility though?

A: As I mentioned we are doing everything very systematically in collaboration with the US FDA. We also have deployed the best international consultants for the job and feel very confident of our position.

Q: For the revenue growth that you have reported this quarter, how much has the contribution been from Kyowa?

A: Kyowa contribution would be of the order about 12%.

Q: Do you expect that to sustain as a contribution to revenues or do you think increasingly the contribution will get higher?

A: In keeping with the strategy, it should get little higher. If the overall international business has to contribute more to the growth of Lupin, Kyowa is a very sound engine. As you know it is the second largest pharma market and the due attention is being paid by the government there to promote consumption of generics. We certainly believe that it should contribute maybe up to 15% to our topline.

 

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