IPCA Labs’ revenues grew by a robust 24 per cent to Rs 2,359 crore in 2011-12. But which markets and therapies made this possible? IPCA’s latest annual report throws light on the growth drivers.
Africa, particularly with respect to anti-malarial drugs, was clearly a big growth market for IPCA. If 16 per cent of the revenue growth came from export of formulations, almost a 10 per cent contribution came just from the African market. The formulation sales in Africa more than doubled to Rs 356 crore, on account of strong institutional sales of anti-malarial drugs. Contribution of anti-malarials to the company’s export formulation sales jumped from 19 per cent in 2010-11 to 33 per cent in 2011-12.
Formulation sales in the Americas (US, Canada and Latin America) grew at an impressive 54 per cent too, adding 3.3 per cent to the total revenue growth.
Domestic brands grew by a sedate 8.3 per cent. The growth was largely driven by the pain management segment with brands such as Zerodol, Movon, Etova to name a few. Also, revenues from the neutraceutical segment were higher during the same period. But, revenue contribution from chronic therapies such as cardiovascular, neuropsychiatry and anti-diabetes declined in 2011-12.
In an interesting sidelight, the annual report shows that IPCA paid 34 per cent more in terms of total remuneration to its Chairman and Managing Director Premchand Godha in 2011-12 compared to the previous fiscal. The total remuneration was a hefty Rs 10.2 crore, which is about 4 per cent of the company’s reported profit. The company paid 36 per cent higher commission in a year where the reported profit grew by a paltry 3 per cent.
Despite a 43 per cent jump in the company’s inventory levels, prompt payment by debtors (decline of 5 per cent) helped IPCA shorten the working capital cycle by 4 days to 122 days.