The Hindu Business Line : Re rise may hit Shasun Chem bottomline

Chennai, Sept. 27 Chennai-based Shasun Chemials and Drugs Ltd expects a 20 per cent dip in its bottomline for the current year, thanks mainly to the impact of the appreciation of the rupee against the dollar.

Mr S. Vimal Kumar, Director, Shasun, told Business Line that the company would also receive a smaller order for the anti-ulcer drug, Nizatidine, from an overseas customer who bought all its requirements from Shasun until last year.

“On the topline we are expecting to grow substantially. Compared with last year’s turnover of around Rs 800 crore, we hope to record a turnover of around Rs 950 crore this fiscal but the bottomline growth is likely to be down by almost 20 per cent,” Mr Kumar said.

Seventy per cent of the company’s turnover is from exports and out of that 90 per cent is in dollars. “We have hedged against currency fluctuations but the rupee appreciated more than expected,” he said.

The company, which was the exclusive supplier of Nizatidine to Eli Lilly, is also on the back foot following termination of the agreement.

“We are now supplying on order-to-order basis. The innovator company (Eli Lilly) has divided the order between us and another Japanese company and Japan is the main market for this drug,” Mr Kumar said adding that there had also been a drop in price of the drug.

UK operations

However, the company is upbeat on its UK operations. It had acquired two plants from French drug manufacturer Rhodia SA in 2006.

“The integration of the UK operations with our Indian operations is progressing better than we expected. It has turned around and in the fourth quarter, the growth in the top line is expected to be around 30 per cent which will surpass the breakeven point,” Mr Kumar said.

The company has also decided to go in for external commercial borrowings in order to fund its expansion plans. However, to begin with, it plans to raise $5 million and would increase borrowings as and when the need arises, he said.

Sashun is also exploring the route for inorganic growth further both in the domestic and international markets. “Though we are not going very aggressive on it at the moment, we would be looking out essentially for CRAM capabilities. We would also be looking at opportunities to handle cancer drugs which would be a new capability for the company,” Mr Kumar said.

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