Will exceed FY14 top-line, EBITDA guidance: Glenmark

Pharma giant Glenmark is confident of exceeding its top-line and EBITDA guidance for the year. MD & CEO Glenn Saldanha said that the company continues to maintain 20 percent sales guidance given earlier.

The company’s  Q2 profit after tax (PAT) slipped 2 percent year-on-year to Rs 157.3 crore, impacted by higher finance cost and higher tax outflow. Its revenue rose 17 percent on yearly basis to Rs 1,463 crore, aided by US and India businesses.

He expects Glenmark’s emerging market business to recover in the second half of the year and sees the India business continuing strong growth.

Below is the edited transcript of Glenn Saldanha’s interview with CNBC-TV18

Q: You have maintained your revenue guidance of around 20 percent growth in FY14 and the EBITDA at around Rs 1,200 or above Rs 1,200 crore. Is there a chance that you could possibly exceed this guidance at all and what would it be predicated on any which way?

A: Guidance is just a roadmap for investors. We continue to maintain the 20 percent guidance that we started the year with. On the EBITDA front, we expect good Q3 and Q4 in terms of margins, which will drive overall EBITDA growth. We feel pretty comfortable that we will clearly exceed both the top-line and the EBITDA guidance for the year.

Q: While the US and India business looks good the semi-regulated market, the rest of the world you have seen a decline even though that is not a large part of your business. Was that a one-off or is that going to be the trajectory?

A: There is a significant amount of pressure on most emerging markets and that is the rest of the world markets overall. For the full year, we will grow this business at about 13-15 percent. In Q3 and Q4, one will see a reversal of trend in terms of growth trajectory as far as the rest of the world markets go.

Q: What about your receivables? What did it clock in at this quarter and how do your receivables pan out for the second half do you think?

A: Our receivables have never been a concern. We are at about 125 day receivables as of this quarter. We think we will finish the year around the same levels. As far as our net working capital goes, overall we are down to about 115 days. We continue to guide at about 110-115 days for the rest of the year.

Q: Can you just give us some sense in terms of any of your products whether they are affected by the new pricing policy and what is the trajectory for the India business that we could expect for the next two quarters?

A: We are not majorly impacted by the new Drugs Price Control Order (DPCO) which has just been put in place. We do not anticipate any major negative coming out of it. We believe India business will continue to show a strong growth vis-à-vis the Indian market over the next few quarters.

That is primarily on account of various new products that we have launched over the last six-12 months and some restructuring that we have undertaken in our India formulations group in terms of sales promotion and field force realignment. This will help us overall. We think India will continue to sustain at least for the next three-four quarters.