Contract research to boost performance in FY13: Dishman

Dishman Pharma's profit after tax shot up 156% to Rs 38.7 crore from Rs 15 crore year-on-year in the first quarter of FY13. The company also reported revenue growth of 30% to Rs 316.3 crore against Rs 243 crore in the corresponding quarter last year.

In an interview with CNBC-TV18, JR Vyas, MD of Dishman Pharma said the contract research income was responsible for the phenomenal performance of the company. Dishman also has other contract research orders lined up for the rest of the year and he added that it is going to boost the company's performance through FY13.

Vyas also expects an additional USD 8 million of revenue from the annual Contract Research And Manufacturing Services (CRAM) contract in the current fiscal. Dishman Pharma's operating margin is also anticipated to stabilise at 24%.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Your reported numbers were very good, but if you can start by telling us whether this is an exceptional quarter because of the USD 5 million of research income that you received and the currency movements. In that sense is it not a sustainable set of numbers?

A: As far as the USD 5 million contract research is concerned we do have other orders to follow during the remaining three quarters. Of course they are variable numbers. I cannot reveal what is exactly the number.

But throughout FY13 we will be showing the contract research income every quarter. Currency movement has not helped us. In fact, we have made a loss on the forex to the extent of Rs 5 crore.

Q: This USD 5 million that you got this quarter, is it from Merck and is it a one-off?

A: No, it's not a one-off. It is an annual contract which we have received this year and it is going to maybe about USD 13 million.

Q: So in the rest of the year, you will book USD 8 million more or USD 13 million more?

A: USD 8 million more.

Q: Is this from Merck?

A: No. I am bound by secrecy agreement. I cannot reveal the name of the customers.

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Q: How do you see the whole Contract Research And Manufacturing Services (CRAMS) business doing this year? The performance of the CRAMS division, aside of this USD 5 million income has not been very encouraging this quarter.

A: As far as India is concerned, CRAMS is certainly going to be weaker. But CARBOGEN AMCIS is going to show a very strong CRAMS growth. They are going to exceed their budget by at least 15-20%.

Q: Do you think you will be able to hold onto the current quarter's operating margin of 26% plus?

A: It will come down to the level of about 24%.

Q: By the end of the year or next quarter?

A: End of the year.