The Rs 210 crore Lyka Labs has chalked out plans to enter the herbal and over-the-counter (OTC) segments, following its decision to sell 36 brands to Lyka-Hetero Drugs.
In line with the restructuring, the other areas of focus would be on expanding the export market, contract manufacturing in addition to the OTC and herbal forays, Ketan Bhasin, chief executive officer, said.
The sale of 36 top brands to Lyka-Hetero Drugs, a joint venture between Lyka and the Hyderabad-based bulk drug major Hetero, for Rs 50 crore, is likely to take a hit on the revenues of Lyka Labs during the current fiscal.
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During fiscal 2003, the company is expected to clock a turnover of over Rs 125 crore (though it is not comparable with fiscal 2002 due to transfer of products to the joint venture) and a net profit of Rs 6-7 crore. During fiscal 2002, its net profit was Rs 3 crore on a turnover of Rs 210 crore.
Lyka will sell its herbal and OTC products under the Lyka brand name on a cost plus formula basis to marketing and distribution agencies.
This is expected to help the company increase its revenues generation on a sustained basis without pumping much investment in the future.
It is planning to unveil herbal range of pain balm, anti-acne gel, turmeric cream, cough lozenges and cough gelly, mouth ulcer gel, vapour inhaler, cold cream with beauty oil, moisturising lotion and antidandruff shampoo.
Under the OTC category, which has seen the entry of majors such as Dr Morepen, Ranbaxy, Himalaya Drugs and Alembic with major investments in the past, Lyka is planning to introduce mouth freshner pan, mint, sauf, baby powder, baby oil, pain management range and lozenges (antiseptic/antibacterial).
The company, which has two production units at Tarapur in Maharashtra and Ankleshwar in Gujarat, will enter into third-party manufacturing contract with Indian and foreign companies for new molecules.
The sale will be done on cost plus formula basis and on third party basis, where the marketing will be done by the contracting company.