May revise guidance upwards post Q2: Ipca Labs

Drug firm Ipca Laboratories today reported 66.98 percent rise in net profit at Rs 71.77 crore for the first quarter (Q1) ended June 30, 2013, mainly on account of robust sales. AK Jain, ED of Ipca Labs told CNBC-TV18 that the company’s guidance was 18-20 percent for revenue in the Q1 of current financial year and it has done around 26 percent.

Therefore, he feels after second quarter (Q2) or so the company may revise its guidance upwards. Also read: Dr Reddy's Labs Q1 disappoints, net up 7% to Rs 361 cr YoY Below is the verbatim transcript to his interview to CNBC-TV18 Q: You have done close to about a 20 percent growth in your revenues, is that sustainable? A: We have done around 26 percent growth in revenue in the Q1 of current financial year. Our guidance was around 18-20 percent so that is sustainable. Q: Will you revise your guidance higher given the start that you have had? A: Overall the start is very good and down the line maybe after Q2 we may revise the guidance. Q: Rs 6 of earning per share (EPS) this quarter, what kind of number can we expect for full year? A: I have already said that around 18-20 percent has been the current guidance so maybe we will be at an upper number. So, overall growth for the current year should be good. We are expecting that for the whole year we should be adding at around 22 percent kind of EBITDA margin whereas in this quarter the EBITDA margin is around 21.23 percent. However, overall EBITDA down the line is going to be around 22 percent kind of margin. So, we expect a very good profitability. Q: You made a forex loss of Rs 48 crore this quarter? A: That is because we don’t capitalise anything and neither we take on loans, we don’t take the hedge reserve account. By and large everything we put to P&L account. So, it is basically on mark to market losses on the loans. It is an unrealised loss which is provided for on mark to market on liabilities in the books of account. Q: What has been the performance on the formulations business in the quarter and even on Active Pharmaceutical Ingredients (APls) because last quarter API was flat, what have you done in this quarter and your guidance for the full year on these two segments? A: Overall growth of around 26 percent, exports has gone up by around 35 percent and domestic business has grown by around 12 percent. If you see segment wise API business in this quarter has gone up by around 17 percent and formulation business by around 29 percent.