Hoechst Marion

However, the decline in sales is a temporary phenomenon. The loss of Baralgan and slowdown in older generation drugs is likely to be compensated through higher contribution from new products. This includes Cardace - in the cardiovascular segment- expected to account for around 10 per cent of sales in a couple of years. Cephalosporins like Cefotaxime and Claforan will compensate for the slowdown in demand for tetracycline range of drugs and it is consolidating its market share in vaccines by the launch of anti-rabies and typhoid vaccines.

Despite a sales drop, operating margin has improved from 13.5 per cent to 14.2 per cent due to the impact of restructuring with a thrust on cost reduction. HMRs net profit grew by 7.8 per cent to Rs 18.15 crore from Rs 16.83 crore. However net profit in the first half of last year was eroded by Rs 4 crore as payment under a voluntary retirement scheme.

 

Net profit growth in the first half of 1997-98 was also helped by a reduction in interest costs by 34.9 per cent and a lower rate of tax provision. Analysts say that surplus funds earmarked for buying out HMRs (Germany) stake in Roussel (India) provided HMR with better liquidity.

The parents attempt to raise its stake from 50.1 per cent to 56.1 per cent failed to materialise due to Sebis insistence on adopting the open offer route. But the launch of more value added products through HMR and the parents intention to source its global requirements from HMR augurs well for its future.