No plans to sell India biz, to be $3bn co by FY14: Lupin

Drug maker Lupin today assured shareholders that it has no plans to sell its India business and said the company aims to be a USD 3-billion firm by FY14.

"India is a very important part of our business and we have no plans to sell it," Lupin Chief Executive Officer Vinita Gupta told reporters here. "The speculations could have arisen, as the company was in talks with partners that could have been misconstrued as sale of company. Maybe people were trying to take advantage of market movement," Gupta said.

Media reports had earlier this month said the promoters had plans to sell the unit that markets medicines in the country and the sale could fetch USD 1 billion for the firm.

Lupin founder and Chairman Desh Bandhu Gupta at the company's annual general meeting here said that the drug firm aims to become a USD 3 billion company by 2013-14 fiscal.

"We have worked out our strength and I would say the certainty with which we can achieve our goals. By the year after next year (2013-14) we should be a minimum USD 3 billion company," Gupta said. Lupin is a USD 1.92 billion company.

To achieve its target, the company will try to expand capacities and also acquire companies in the countries it wants to foray into. The firm will also try to increase its revenue from Japan, which will provide a fillip to its target.

"We have significant growth plans for Japan. We have astrong pipeline that we are pursuing within Japan and we are supplementing that with India also. Japan now contributes about 11 per cent of our revenue. Hopefully, by 2014 it should be 15%," Vinita Gupta said.

The US contributes about 35% of the company's revenue and India's contribution is about 30%, Gupta said adding that she expects the share to be the same by 2014.

Lupin Managing Director Kamal Sharma said, "We certainly have plans to have acquisitive growth. About 75-80% of growth will be organically done and balance would be attained by inorganic strokes in the markets that we want to present in the future and also in the area of technology."

Lupin is looking to have presence in Latin American countries and also acquire a firm in Japan, Sharma said but did not divulge details. The firm plans to invest Rs 450 crore for three years as capital expenditure to expand its facilities.

"The capex for three years is Rs 450 crore, which will be used to create new facilities, expand the existing facilities, and 15% of the capex goes into existing manufacturing efficiencies which will mean upgrading the technology," Sharma said.

The company has out-licensed 20 licences to MNCs and six more were in the pipeline, but Sharma did not divulge any details. Lupin today reported 7.03% jump in net profit to Rs 210.1 crore for the first quarter ended June 30, compared to Rs 196.3 crore for the same period last fiscal.

Net sales of the company rose to Rs 1,543.2 crore for the first quarter ended June 30, from Rs 1,316.5 crore in the same period of the previous fiscal. During the quarter, the company's net sales for India region formulations grew by 17% to Rs 496.9 crore, compared to Rs 424.2 crore in the same period last fiscal.

The Mumbai-headquartered firm's Japanese subsidiary Kyowa's revenues rose by 28% to Rs 166.6 crore during the first quarter from Rs 129.9 crore in the same period last fiscal. In the US and Europe, the company's sales grew by 7% to Rs 534.7 crore in the first quarter ended June 30, 2011, as against Rs 501.1 crore in the same period of the previous fiscal.

The revenues of the company's South African unit, Pharma Dynamics, grew by 47% to Rs 58.7 crore in the first quarter, as against Rs 39.9 crore in the same period of the previous fiscal. The firm's net sales of active pharmaceutical ingredients (API) grew by 12% to Rs 210.2 crore in the quarter, contributing 14% to the company's consolidated revenues.

Shares of Lupin settled at Rs 448.20 apiece on the Bombay Stock Exchange, down 3.12% from previous close.