Granules charts Rs 60-cr spread

To meet the demand for finished dosages from its existing contracts, Granules India Limited, a Hyderabad-based integrated formulations manufacturer, is in the process of increasing its finished dosage and pharmaceutical formulation intermediates (PFIs) manufacturing capacity in the next one year together with an investment of Rs 60 crore.

“Our current finished dosage facility at Dundigal on the outskirts of Hyderabad has a capacity of about 6 billion tablets a year. In the next few months, it should go up to 12 billion and to 16 billion within a year. The Rs 30-crore capacity expansion will be funded through internal accruals,” C Krishna Prasad, managing director of Granules India, told Business Standard.

Prasad said the expansion was being driven by the market situation as more and more multinationals are now wanting to outsource their products. There are contracts already in place, which would take care of almost 80 per cent of the new capacity addition, he added.

During the 2010-11 financial year, Granules India received two abbreviated new drug application (ANDA) approvals, which enabled the company to participate in the lucrative US finished dosage market. “While the major business will be coming from the US, we will be focusing on building the European market from this year,” he said, while declining to comment further.

Stating that the finished dosage division contributed Rs 101 crore to its total sales in 2010-11, Prasad said its contribution should see more than 100 per cent growth in the current fiscal. “Active pharmaceutical ingredients (APIs) may not grow much as we are cannibalising the API production to make PFIs,” he said.

“To make more finished dosages, we will need a lot of PFIs. Towards this, we are expanding our PFI capacity from the current 8,000 tonne a year to 15,000 tonne a year. The Rs 30-crore expansion, for which we may go for some borrowing, will see the utilisation by the last quarter of this fiscal,” Prasad added.

The company witnessed a 30 per cent decline in its net profit to Rs 21 crore for the year ended March 31, 2011, as compared with Rs 30 crore in the last fiscal (prior fiscal year had a one-time foreign exchange gain of Rs 11 crore). Net sales stood at Rs 476 crore, as against Rs 461 crore.

Granules India’s scrip ended the trade at Rs 93 on the BSE on Friday, down 1.74 per cent, over the previous close of Rs 94.65.