| The key factors that contributed to the improved performance were surging domestic sales and exports. Multinational and local pharmaceutical companies have been reorienting their strategy to focus on key brands in a bid to maximise their returns in India. |
| This very strategy has paid dividends for Wockhardt too "" its 20 power brands contributed 70 per cent of domestic sales. Sales of Wosulin, a recombinant insulin, and Winofit, an anti-oxidant, have grown rapidly in the March quarter. As a result, domestic sales surged 36 per cent to Rs 120 crore in Q1 CY04. |
| Wockhardt has also taken considerable steps to diversify geographical spread "" exports to the European Union have jumped 249 per cent to Rs 120 crore in the March quarter. The synergy derived from the acquisition of CP Pharmaceuticals of UK last July enabled the company to aggressively expand in Europe. |
| Exports grew by 118 per cent during the March quarter to Rs 175 crore "" they now account for 61 per cent of Wockhardt's consolidated sales. Overall, sales were up 78 per cent to Rs 288 crore in the first quarter 2004. |
| While the company's core operations have grown, Wockhardt, like other pharmaceutical companies, has seen a rise in costs too. A key component, expenditure on research & development, has risen 18 per cent to Rs 12.5 crore in the March quarter. |
| Rising sales helped the company to improve its performance "" operating profit margin rose 1,000 basis points to 20 per cent in the March quarter and operating profit rose 266 per cent to Rs 58 crore. |
| Analysts are hopeful that the company would be able to ramp up its biotechnology segment offerings, which currently is of three products. Margins in the biotechnology business are far higher than in the generics segment. |
| Also, the company's export plans include ratcheting up sales in the American generics market, where competition has increased manifold especially from Brazilian suppliers. |
| Moreover, US multinationals are also aggressively protecting their product patents, through a spate of litigation, which has made things difficult for domestic players. |
| To get around such problems, Wockhardt has been focusing on improving its management team in that market "" it has recently recruited Arthur Maher, a marketing professional with over 20 years of experience in the US generics business. |
| Analysts expect the results from this strategy to be reflected in the company's performance in the next 2-3 quarters. |
| With contributions from Amriteshwar Mathur |
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