Surya Pharma eyes 30% rise in turnover

The Chandigarh-based Rs 140 crore Surya Pharmaceuticals Ltd (SPL), which is entering the capital market with an initial public offering (IPO) of 30 lakh equity shares this month, is targeting a 30 per cent rise in its sales turnover at the end of the current fiscal.

The company, which earned 50 per cent of its revenues from exports last fiscal, has decided to expand its export activities to the regulated overseas drug markets during the next two years. It will reduce its existing export activities in the under-developed and developing countries.

SPL has registered sales of Rs 140 crore at the end of last fiscal, while at the end of the first half of the current fiscal the company has reported sales of Rs 84 crore.

"By beefing up our domestic operations in the bulk drug and formulations segment during the current year, we expect to achieve a turnover of Rs 180 crore at the end of this fiscal. Bulk drugs sales contribute 75.25 per cent to our total sales, while formulations contribute a 5.48 per cent share. With our recently expanded manufacturing capacities in the three units including two in Himachal Pradesh, we can now manufacture intermediates of 800 tonne per annum and active pharmaceutical ingredients of 963 tonne per annum. Our fourth unit in Haryana can now manufacture 900 lakh of formulation capsules in a year," said Rajeev Goyal, managing director, SPL.

In the domestic bulk drug segment, SPL's list of customers includes pharmaceutical majors such as Ranbaxy Laboratories , Cipla, Glaxo, Dr Reddy's Laboratories and Orchid Pharmaceuticals.

At the end of last fiscal, SPL earned Rs 73 crore of sales from the domestic market in which bulk drugs hold a stake of 75.25 percent against a 5.48 per cent share held by formulations.

SPL so far has been exporting mainly to underdeveloped and developing countries. Of this far-east countries hold a 34.81 per cent stake. The company is eyeing potential markets in the developed countries such as the US and countries under the European Commission.

"We are now trying to get into the regulated markets, mainly the US and European countries such as Germany, France, Denmark and Sweden. We are at present reworking on our export strategy. We have cut down our exports to far-east countries," said Goyal.

SPL, which earned 37.91 per cent of its export revenue from far-east countries during 2001, earned 35.90 per cent of the revenues from far-east this year.

It has so far earned 34.81 per cent of total export revenue from far-east. But it has significantly raised its export revenue stake from comparatively high-value market of middle-east to 5.72 per cent stake of export revenue during this year against 3.87 per cent stake in 2002.

"In regulated markets such as the US and Europe we are planning to enter with our third generation product Cephalosporins. We are also planning to introduce anti-ulcer, anti-diabetic drugs in these markets. During the second quarter of the next fiscal, we are also going to file applications with the USFDA for some drugs following which we will be able to exploit the US market with a stronger product line," Goyal said.