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Aurobindo Pharma chief on the firm's future
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June 28, 2006

Lanka Srinivas, director of Aurobindo Pharma [Get Quote] says that the company earnings have been good for the full year. He expects revenues to cross $1 billion in three years time.

Excerpts from CNBC - TV18's exclusive interview with Lanka Srinivas:

You have had good numbers, take us through how much of it came through from the export market, particularly the ARV, Anti Retro Viral, segment and whether you expect this to be sustained from those markets?

The numbers have been quite good, continuously quarter-on-quarter for the full year. We have done about Rs 475 crore (Rs 4.75 billion) in Q4. On a standalone basis, we have done about Rs 1500 crore (Rs 15 billion) and on a consolidated basis about Rs 1750 crore (Rs 17.5 billion). All these numbers have been the highest numbers that we have ever achieved.

In Q4 we had about 69 per cent of our sales coming from exports and overall for the full year, about 58-59 per cent came from exports. As far as the regulatory market of sales is concerned, for Aurobindo it commences from Q3 onwards and in the last quarter, about 50 per cent of our exports came from Europe and America.

We are working on a concept of market portfolio, which means that instead of just depending on the US, we are working on Europe, US and various other markets. Similarly the profile of the product mix has improved considerably. For example in Q4, the non-beta lactum business has been more than 51 per cent. We believe that the company strategy is doing quite well and we should be able to deliver on a sustainable, long-term basis.

For the anti- AIDS products, what do you think you would end this financial year with, in terms of sales?

We normally do not give figures specifically for anti-AIDS products, but it has been continuously doing quite well, both in Q4 and on a consolidated basis and the growth rate of formulation, which is basically a lot of ARV products. The formulation business is 23 per cent of our Q4 sales, which is close to Rs 107 crore (Rs 1.07 billion) in Q4.

Do you think margins will sustain at double digits from here on?

We have been working on most of the businesses in the regulated market and in the regulated market for vertical integrated companies like us, things are comfortable.

What can you deliver in FY07, given the kind of export outlook you have in terms of topline growth and given your EPS of Rs 12.5? What can you promise your investors in FY07?

FY07 will be far better than FY06. In FY06, in Q1 and Q2 we did not really begin the regulated market sales. The regulated markets sales basically began in Q3 and Q4, for example we were doing about $10 million per year sales of formulation earlier and now we are doing $10 million per month. Things have been completely good for us, based on the investments that we have done.

Could you take it to Rs 20-Rs 25 per share next year?

I do not give guidance but in three years time we should be more than $1 billion and next year we should be more than half a billion dollars. We should be looking for very good gains because we are depending on multiple products and also multiple markets and therefore in all these markets, we have been successful. We have got regulatory approval from virtually every important Greenfield in the world. This is the just beginning and we have a long way to go.

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