"In pharma, demand is there, but growth depends more on our ability to supply," Upadhye said in the context of COVID-19 pandemic that's threatening operations. The lockdown had impacted sales of Rs 200 crore for Q4FY20
Drug maker Cipla sees scope to expand its profit margin and return on capital employed (RoCE) in FY21 as demand for pharmaceutical products continues to remain strong. "Margin and RoCE expansion would be our priority, more than revenue growth," Kedar Upadhye, Global Chief Financial Officer, Cipla, told Moneycontrol.
Cipla ended FY20 with margin contracting 22 basis points year-on-year to 18.7 percent, while RoCE expanded 60 bps to Rs 8.7 percent. The company ended FY20 with its consolidated revenue growing 5 percent YoY to Rs 17,132 crore. Net profit rose a percent to Rs 1,547 crore in the same period. India constituted about 39 percent of revenue, US: 23 percent and South Africa: 18 percent.
"In pharma, demand is there, but growth depends more on our ability to supply," Upadhye said in the context of COVID-19 pandemic that's threatening operations. The lockdown had impacted sales of Rs 200 crore for Q4FY20.
Upadhye said in the intial three weeks of lockdown there was confusion about curfew passes for employees, supply chain and logistics issues, but things have started to improve. "Our employees are able to reach factories, attendance is good, production is at threshold level and despatches are at decent level," Upadhye added.
The domestic formulation business, which is Cipla’s largest contributor, is confident of beating the market growth rate, he said. The company has outperformed market growth in the last three consecutive quarters.
The management is implementing a One-India strategy to combine its domestic business verticals such as trade generics, prescription business and consumer health, and unlock synergies. As part of the strategy, the company has transitioned select brands with high consumerisation potential to the consumer division from trade generics.
US revenues grew 12 percent on a full-year basis to over $500 million. The company is hoping on its respiratory assets, especially Albuterol, to contribute significantly. The company said it has also completed clinical trails for generic Advair and filed another complex inhalation asset.
On remediation of Goa plant which is under USFDA warning letter, Updhaye said the company had fast tracked the resolution process. "We have paid for remediation charges in Q4, and we are working with the agency (USFDA)," Upadhye said.Moneycontrol Virtual Summit presents 'The Future of Indian Industry', powered by Salesforce
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