See India biz grow 15%, exports to rise 25% in H2: Ipca

Drug firm Ipca Laboratories expects to grow around 15 percent in its Indian division in the second half of the fiscal year, says ED AK Jain. The company is likely to get the USFDA approval for its Indore special economic zone (SEZ) by next year which will be an additional business growth, he adds.

Speaking to CNBC-TV18, Jain says the exports of the company will increase substantially if they get approvals for their projects. The company expects a much better growth in the second half and hopes its exports business continue to grow at around 22-25 percent, he adds.

The company reported a 3.48 percent rise in its standalone net profit at Rs 129.45 crore for the second quarter ended September 30, 2013.

Below is the verbatim transcript of AK Jain’s interview on CNBC-TV18

Q: This time your India formulations business has slowed down to about 5 percent while the export formulation has grown about 7 percent. Can you take us through the second half of the fiscal? What are your expectations this time in terms of growth from the India business as well as exports?

A: Overall, the India business in second half is expected to grow around 15 percent. India business in second quarter has come down mainly because this is a peak season for anti-malarial and we had a bad season for malaria in this quarter which impacted overall business in the second quarter.

But if you see the ORG numbers, then among the top 25 companies, we are the third highest in terms of growth and our growth which ORG is tracking is in excess of 15 percent on MAT (minimum alternate tax) basis. We are continuously doing well so we hope to do very well in the second half of the year as far as our India formulation business is concerned. Exports will continue to grow at around 22-25 percent as far as the second half is concerned. We expect much better business in the second half of the year.

Q: What will be the impact of the Indore special economic zone (SEZ) getting US Food and Drug Administration (FDA) approval? Will that mean a quantum leap in your exports and for FY15, what is the full year target from exports?

A: It may not happen in current year because lots of validations and all the stabilities of the site transfer, those works are currently going on and maybe in the fourth quarter of the current year we will have some shipment. But in the next financial year we will have full-fledged impact of Indore SEZ and that will be an additional business growth for us.

Q: How much will be the export rise in FY15?

A: We hope to do in the very first year around Rs 80-100 crore business and by that time we should get more approvals, large number of approvals. So, it all depends on the kind of approvals we get and once we get an approval because our filing is around 34 and we should get around 8-10 approvals. If we get approvals, we will have substantial impact on our growth.

Q: What about the active pharmaceutical ingredients (API) business? That contributes about 27 percent to your overall business. What is the prognosis for the second half of the year for the API business?

A: API is not the main focus for our company. API is to support our captive consumption. If we are there in a particular API then we do not ignore the API business and since our US business got delayed so a lot of captive consumption plan got delayed and therefore, we have API available for sale but we are not focusing much on API business.