Piramal Healthcare looks to expand India footprint

Piramal Healthcare, one among the top five domestic pharmaceutical companies, plans to acquire more drug brands and diagnostics chains to expand its footprint across India.

Ajay Piramal-led Piramal Healthcare, which recently bought emergency contraceptive brand i-Pill from Cipla for Rs 90 crore, was planning to buy more such over the counter (OTC) and established prescription drug brands in the domestic market, said Murari Rajan, executive director at Piramal Enterprises, with the responsibility of mergers and acquisitions (M&A’s) for Piramal Group.

“Our plans are not to go for expensive acquisitions abroad, but will try to add good brands and diagnostic chains in the domestic market.”

Two years ago, the company bought the ‘Cefi’ brand antibiotic cefixime-based formulations in pure and combination form from Khandelwal Laboratories for Rs 160 crore. Later, the company also acquired blood plasma products of PlasmaSelect, Germany and acquired the US-based medical devices maker Minrad International.

The company has a good portfolio of OTC consumer products which reach over two lakh medical stores in the country. Piramal, according to Rajan, would aim to create a large basket of such products. The four-year-old consumer products division had a turnover of over Rs 200 crore, according to Murari Rajan.

Another focus area for Piramal Healthcare is to expand its diagnostics business, which has over 102 branches across the country. Piramal Diagnostics Services, an arm of Piramal Healthcare, is looking for acquisitions to expand its reach.

The radiology and pathological laboratory business in India is valued at over Rs 9,000 crore, but there are only a few established chains like Super Religare Laboratories Ltd (formerly SRL Ranbaxy Ltd), Metropolis, Dr Lal Pathlabs and Dabur-promoted onQest Laboratories. The industry is growing at over 15 per cent and there is more room for all players, according to the executive.

“We are talking to many regional chains and suitable targets with good facilities and customer base for acquisitions,” he said.

In the second quarter of 2009-10, revenues of Piramal Diagnostics Services were up by 45.5 per cent at Rs 45.36 crore, compared to Rs 31.17 crore in the corresponding quarter.

He said the company had created adequate manufacturing capacities in the country for its contract manufacturing, or Pharma Solutions (custom manufacturing), business and there was no need to add more capacities in near future.