Growth concoction

INTERVIEW: PRANAV GUPTA

'We are looking at both debt and private equity'.

Young management team characterises the operations of Parabolic Drugs Ltd., (PDL) which is into API (active pharmaceutical ingredients) and API intermediates and has created a scalable business model. The company's has more than 31 products and its basket incldues semi synthetic penicillin's (oral) and cephalosporin's (oral). PDL's long-term strategy is to increase its repertoire and become a preferred supplier to large global pharmaceutical players. Pranav Gupta, chairman & MD, Parabolic Drugs Ltd, speak about how the company is chasing more strategic relationships such as Ranbaxy and is also working at prising open the U.S and European markets.

How has the situations changed for bulk drug players in recent years?

We feel that increasingly manufacturing is going to shift from U.S. and Europe to India which is helpful for the bulk drug players if they can occupy this space.

Within your domain what are the challenges and areas of opportunities for SMEs?

SMEs have to upgrade themselves for regulatory challenges. I feel that only those SMEs with a focus on the regulated markets will have a playing field in the future.

How do you think the excise free zones are panning out, are the challenges there turning out to be deterrents for future players?

The current challenges are of infrastructure in the region. Future challenges will be of availability of manpower and excess capacities in these areas (Baddi and Uttaranchal, etc.).

Can you explain you company structure and talk a little bit about the organisations growth and future plans?

We are an eight-year old company. My brother Vineet Gupta and I are both professional promoters with management and engineering degrees respectively. Since inception, the company has achieved a turnover of about Rs 170 crore and we aim to continue growing consistently at around 40-50 per cent for the next five years. Over the next few years our focus is going to be on research and development and tackling the regulatory environment.

What funding options the company is considering to fuel expansion plans?

We are looking at both debt and private equity options. Parabolic has successfully completed two private equity transactions in 2006 diluting 7 per cent approximately.

What are your key markets and how is the company planning to grow?

About 70 per cent of our earnings are from are exports into South East Asia, Latin America, Middleast and North Africa. The company is looking at opening European and U.S. markets by next year. In the domestic market we supply to all leading companies like Ranbaxy, Cipla, Cadilla and Dr. Reddy's to name a few.

What kind of collaborations are you working on for growth?

We are already a strategic partner with Ranbaxy with 20-30 per cent sales to them for exports. We are contemplating few other big relationships like these.

Finally, how has this Budget impacted your industry in general and your company in particular this year?

We are happy with the research and development benefit being extended for income tax exemption purposes. I feel that this is a positive step to encourage R&D in pharma units for development of new technologies and intellectual property. Also, reduction of customs duty means availability of cheaper drugs in the market place.