Bajaj Healthcare will focus on the anti-diabetic segment: Anil C. Jain, VC & Joint MD
Anil C. Jain Vice Chairman & Joint Managing Director, Bajaj Healthcare Ltd, talks about DRDO nod to manufacture 2-DG, fire incident at Panoli unit, guidance for FY22, margins, export markets, CapEx plans and focus areas among others during a candid chat with Swati Khandelwal, Zee Business.
Anil C. Jain Vice Chairman & Joint Managing Director, Bajaj Healthcare Ltd, talks about DRDO nod to manufacture 2-DG, fire incident at Panoli unit, guidance for FY22, margins, export markets, CapEx plans and focus areas among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
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Q: Bajaj Healthcare has received a DRDO nod to manufacture 2-DG. What it means for the company and what kind of revenues do you expect from this?
A: The permission/license for 2-DG has been granted to us and we have already signed the agreement in regard to it and sent it to the DRDO. Everyone knows that 2-DG is the most proven drug for COVID and is quite effective. The patients who are hospitalized are recovering in just two to three days. We have prepared a lot for it and the API and formulation will be done by Bajaj Healthcare. We will manufacture around 2-3 metric tonnes of API. In Formulation, we have a capacity of making 50,000 sachets per month.
Q: When do you plan to launch this?
A: Now, we will apply for its license to DGCI. We have already sent the agreements and tomorrow we will get the agreements signed from DRDO. After that, we will apply for the license.
Q: Will you have to increase your capacity for this and will you have to make some CapEx for it? Also what kind of margins do you get from this and will you be exporting this drug as well?
A: We have a capacity for the purpose, so we are not supposed to make any CapEx for it. API and formulation can be manufactured properly at our existing facility. The kind of sales that is visible for the product suggests that there will be good growth in it.
Q: Tell us about the Product Pipeline of the company? Also, the company has launched many Covid Related Drugs. Update us about those? Which kind of launches should be expected in FY22?
A: Besides 2-DG, we launched Posaconazole, an anti-fungal drug. Its tablet and suspension have been launched and it is already available in the market. In addition to this, we are working on Baricitinib and have already received the text license for the product. We have developed its formulation. Apart from this, many non-COVID drugs are also in the pipeline and this year we will launch 4-5 new non-COVID drugs this year.
Q: What are your expectations at the end of this year? How much will the COVID portfolio contribute to Overall sales?
A: There will be a 15-20% will increase in COVID drugs. Apart from this, our regular products – the non-COVID products – will grow well. We are bringing new molecules and our R&T team is working on it. We have many product launches from the patents that will be off in February and March 2022.
Q: There was a fire incident at one of your units. You did mention there was no loss or injury to any human but was there any financial loss?
A: The fire incident occurred at the Panoli Unit. It is a small unit and there was no injury or anything else. There was a financial loss but we have insurance coverage for the same. The unit will be restarted at the earliest and there will be no major impact on it.
Q: Coming to Guidance for FY22, you mentioned that over the next 2-3 years you are expecting a topline in excess of Rs 1,000 crore. Which segment do you feel will be a major contributor here? Will you revise the guidance with the way your portfolio is churning?
A: As I have said earlier that we will cross the mark of Rs 1,000 crore in the next two to three years. The anti-diabetic and anti-viral drugs category will play a vital role in it.
Q: Tell us about the Strategy ahead in terms of pain management and anti-diabetic and where will you be focusing more on going ahead?
A: We will focus more on the anti-diabetic category because its demand is increasing. There is a growth of around 10-15% in the anti-diabetic patients. Many of its products are going to be off-patent and a good demand is visible in it. The company has already manufactured two to three molecules and are waiting for them to be off-patent.
Q: What's the outlook for H2FY21 in terms of margins and do you expect margins to sustain at or above 25%?
A: The margins will stay in the range of 20-25%.
Q: How do you see the Exports going ahead?
A: We have made a lot of registrations in exports like in Russia, Latin, Korea. We have already submitted the Drug Master File (DMF) of many products and are waiting for approval for those products. So in the next half of the year or the next year, you will get to see that many registrations will reach us. We will get a growth of around 10-15% in export.
Q: Is there any CapEx for the H2FY22 and are you looking forward to any inorganic plans for this year? Also, let us know about your financial situation and is there any need to raise funds for CapEx or do you have enough cash to deploy?
A: There is no need for the CapEx. Internal accruals will be enough to complete the works. We bought a big unit last year, which will be commissioned this year. The next CapEx will be made after 2022 at our land parcel at Dahej.
Q: What CapEx has been lined up for that purpose?
A: A CapEx of more than Rs 200 crore will be infused in it in 2022-23.
Q: If there any plans of diversification in some other areas as part of your overall growth strategy?
A: Currently, we are focusing more on formulations. The formulation that stands at 8-10% at present will be taken up to 25-30%. We will think about something else after it is stabilized.
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