Key Highlights

The company has completed the capex program of Rs 25 crore in Tarapur plant with which additional 35% of capacity has been added. Although the capacity addition would depend upon the finished product, technically the company will be able to produce higher volumes by 33% of the current capacity.

With this new capacity, now the company can generate a double digit sales growth in future for next 3 years. Management expects barring an uneven quarter of one or two due to additional depreciation due to the capex and incidental expenditure costs, growth momentum will remain intact going forward.

Veterinary segment is poised for a strong growth in the next 3- 5 years. Lot of outsourcing opportunities has emerged in this sector.

The company has 2 long term contracts and needed more capacities and scale to get the long term contracts. With the added capacity, management is trying for such 3-5 contracts which it expects to receive by the year FY'17.

The margins for Q1 FY'17 were helped by higher offtake of high margin products by an international customer in exports business along with rupee depreciation. It's difficult to determine the margin exactly as different products have different margins. On an average, given the fall in raw material prices and a depreciated rupee, average Ebidta margin will be around 19-20%.

More than 90% of company's business is API's. More than 80% of the total business is exports.

The growth going forward will come from existing products to existing customers, new products to existing customers, existing products to new customers and new products to new customers.

For FY'17, management expects net sales of around Rs 110 crore

The company does process tests of only off patented and matured products in its lab and has delivered about 16-18 API products. 3 more are in the pipeline for FY'17.

Post the completion of capex program, management expects dividend to be declared from FY'17 onwards.