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Last Updated : Feb 03, 2016 03:19 PM IST | Source: CNBC-TV18

Expect 20% growth in FY16: RPG Life Sciences

Speaking to CNBC-TV18, CT Renganathan, MD of the company said that new launches aided domestic growth. Both international business and biotech space have performed well in the Q3, he said.


RPG Life Sciences reported good third quarter earnings with revenue rising 25.44 percent to Rs 73.2 crore and operational efficiency (EBITDA) imporving 22.2 percent to Rs 7.7 crore year-on-year. The company’s profits rose 84.58 percent to Rs 4.67 crore in the quarter ended December 31.

Speaking to CNBC-TV18, CT Renganathan, MD of the company said that new launches aided domestic growth. Both international business and biotech space have performed well in the Q3, he said.

Going forward, Rengenathan expects a 20 percent growth in FY16. New launches will boost growth, he added.

Below is the verbatim transcript of CT Rengenathan's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.

Latha: Could you take us through the highlights of this quarter?

A: In this quarter we have done well in the domestic business and also for the international business. In the international segment formulations, Apotex from Canada has done well, we got close to Rs 6 crore business. Biotech also has done well. So overall we registered a growth of 25 percent with a mix of all three segments.

Sonia: Can you take us through the growth that you saw specifically for all the segments?

A: The domestic business registered a growth of around 20 percent. It is mainly due to launch of new products; in addition to the old products has done well like Minmin Tonic has grown close to 90 percent and also the new launch of Minmin Pb, the papaya extract table that we introduced which has done a crore in December and other existing products or the legacy products has also done well.

However, international business wise, the formulations has done more than 350 percent. Last year it did only Rs 3 crore, this time it has done well and with respect to biotech formulations against the plan of Rs 3 crore, we have done Rs 6.5 crore which is much better than last year. So overall, all three segments have done well.

Latha: What is your guidance on these segments, for Q4 and for FY17?

A: Domestic is expected to do well in line with the current trend, so we will launch few more products. The new international business is also likely to go well. We have moved some of the business into Q3 because we have a plant closing, getting ready for qualification, so we have moved Q4 business to Q3, so the results may not be in line with this but we will have better than last year. So overall the year expected to close around 20 percent growth.

Sonia: Your margins have inched up from around 3 percent levels in nine months FY15 to 10 percent currently and that is impressive. What is your guidance on margins, how much more can you improve it by?

A: Margin is a mix of two factors. The gross margin level by and large remains the same; Q3 is 32 percent, material cost contribution is close to around 70 percent which is in line with last year also. So we have moved some of the business from Q4 to Q3, so that gives a better performance this year. Therefore, Q4 will be similar or little lower than Q3.

Latha: Within international markets, can you tell us how much you get from regulated market like the US and how much you get from emerging or less regulated markets?

A: We are not having any presence in US at this point of time. By and large our sale is only in Europe. In Europe we have got good business and we also have in Canada, but in this quarter we have done well in this area, the rest of the world market has done well and contribution wise both of them will be doing around 40-50 percent of our business each.

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First Published on Feb 3, 2016 10:47 am
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