Twenty three percent revenue run rate is sustainable for the full year, Rajiv Gandhi, CEO & MD of Hester Biosciences told CNBC-TV18.
Gandhi said the company is trying to shift focus from poultry vaccines to medicines, health products and vaccines for animals.
"By increasing the focus over there we hope to do a faster growth in our topline," Gandhi said.
Below is the verbatim transcript of Rajiv Gandhi’s interview to Prashant Nair, Ekta Batra & Reema Tendulkar.
Reema: It looks like a fairly steady start to the year. Is a 23 percent revenue run rate sustainable for the full year?
A: Yes, it is sustainable. In fact our original projection when we started the year it was 20. So, considering that we are doing well for the moment, for sure.
Prashant: Could you just talk a little bit about your business per se, operationally how did things look, what happened in the quarter really?
A: We have been into the vaccines as well as health products segment in the poultry and the large animals. Our focus till recently has been poultry vaccines but now we are trying to defocus the growth from poultry vaccines to the medicines as well as large animal health products and vaccines.
However, the large animal health products business is the biggest turnover for most of the animal health companies. So, by increasing the focus over there we hope to do a faster growth in our topline.
Reema: Your domestic sales have grown faster than exports. So, domestic sales are up 21 percent, exports at 14 percent. Can we expect a further pickup in exports?
A: Yes, for exports we have projected to grow at approximately 100 percent on a year-on-year (Y-o-Y) basis for the next two to three years. However, for this quarter it has been 14 percent but we would pick it up in the second or the third quarter and we are very confident to grow our exports at 100 percent with Africa as our focus area.
Ekta: Just had a quick question with regards to expanding in the export markets. A lot of your peer companies such as Sequent Scientific have been very aggressive when it comes to the animal health businesses and acquire smaller companies especially in Europe. Do you have any such plans?
A: Our plans are mainly driven by Greenfield projects and we want to focus on setting up our own infrastructure to grow our business rather than acquisition. And we believe that working it in Africa, Middle East, Asia are our focus areas.
Reema: What is the outlook on margins? You have indicated on account of installation of a solar power generation project, you have managed to bring down your energy costs, which has helped your margins. Is there scope to improve your margins from current levels?
A: The solar power generation we have only installed 100 KW. We are now going to add additional 650 KW to it, but our bigger focus in order to increase our margins is a product mix and inventory control. These are the two tools that we are going aggressively on for increasing our bottom-line because product mix is an important factor because we have many products; different dose sizes in many products, so rationalising on our product mix is definitely going to help us further improve the bottomline.
Source: - Moneycontrol.com
