Aditi Kare Panandikar Managing Director addressed the call

Highlights of the meet

During the second quarter ended Sept.'13, the domestic business as well as international business has performed well. Domestic formulations business recorded a growth of 10.1% much above the industry average of 2.8% and International business recorded a strong growth of 35.7% over the same quarter last year. Overall, the company recorded revenue growth of 18.5 % at Rs 195.0 crore as against Rs 164.5 crore during the same period last year.

The company might have done phenomenally well but was constrained due to external conditions.

Marketing and sales incentives have been given in September 2013 quarter.

Formulations business recorded a growth of 17.3% and API business recorded a growth of 40.4% over the same quarter last year.

The Indian Pharma Market (IPM) witnessed slowdown in the first half of the fiscal year (Apr-Sep13) due to issues concerning implementation of the new pricing policy.

The Pharma industry in the first quarter grew by 7.9% as against 17.0% during the same period last year and in the second quarter it grew merely by 2.8% which is the lowest growth recorded during the last few years.

Domestic Formulations business of our company grew by 10.1 % to Rs 120.6 crore.

International Formulation business grew by 34.4% to Rs 61.9 crore.

Regulated Markets revenues are at Rs 53.4 crore as against Rs 41.6 crore and the Emerging Markets revenues are at Rs 8.5 crore as against Rs 4.5 crore during the same period last year. API Export business grew 51.6 % at Rs 5.5 crore as against Rs 3.6 crore during the same period last year.

During the quarter, the company witnessed significant improvement in EBIDTA margins. EBIDTA as a percentage to net sales is 18.9% at Rs 36.8 crore as against 15.9% at Rs 26.1 crore during the same period last year. The operating profit as a percent age to net sales is 12.2% at Rs 23.9 crore as against 10% at Rs 16.5 crore.

The International Formulations Business recorded a growth of 34.4% to Rs 61.9 crore.

The company is looking at contact manufacturing from its Goa plant. The EU authorities will inspect the plant in November. The company is also in the process of filing its own dossiers.

Inspection of the EU authorities in the coming quarter will pave the way for ophthalmic product filings and also fetch opportunities for ophthalmic contract manufacturing in all 28 countries in EU.

Forex gain Rs 6.58 crore Forex loss is Rs 2.82 crore. Gain is reflected in other operating income and financial cost reflects forex loss.

With the minimum impact on account of the new pricing policy, its domestic formulation business is all set to improve its performance in the coming quarters.

Focus on chronic segment, better market penetration and promotion of legacy brands will help in improvement in domestic sales as well as EBIDTA margins.

On receipt of USFDA approval, the company will launch two ophthalmic products, marking

the commencement of sales in US markets through ACTAVIS (Watson) partnership.

Shipment of Indoco's own approved ANDA for solid dosages will commence in Q3FY14. Before December the company targets 7-8 ANDA filings.

The international business will record better growth rates with the ramp up of sales in Regulated markets.

In the European markets, the contract manufacturing business is being augmented with supplies/sales against own Dossiers/Marketing Authorizations (MAs) to bring sustainability and to improve the EBIDTA margins.

The API business is growing as planned and is contributing in our formulation business through backward integration in select APIs.

With strong infrastructure built over a period of time, skilled manpower and strategic alliances, the company is poised for a higher growth, improved margins and sustainable business.