Krebs Biochemicals

The favourable demand-supply situation for its bulk drugs pseudoephedrine and ephedrine in the global market helped higher export growth.

Demand for these products exceeded supply by about 33 per cent. But Krebs operating profit margin marginally declined from 48.7 per cent to 46 per cent due to higher cost of molasses.

To offset the impact of rising input costs, Krebs is currently working on improving yields which will result in higher turnover without affecting the raw material cost.

Krebs net profit rose 53 per cent to Rs 5.66 crore in the first half, largely due to lower interest and tax.

 

Tax as a percentage of profit before tax came down to 4.2 per cent in the first half of 1997-98 from 9.8 per cent. Interest outflow too fell by 23.8 per cent to Rs 0.74 crore despite an expansion in operations.

However, its ongoing Rs 26-crore monosodium glutamate (MSG) project has a debt component of Rs 15.75 crore, which will hike interest cost in the future. With domestic demand for MSG being met mainly through imports, the venture which is to be commissioned in the last quarter of 1997-98 will have a ready market.