Brooks Labs has roller coaster IPO; targets export growth
Eventually, the Indian contract research and manufacturing services (CRAMS) firm’s share price closed down 40 per cent at INR60.20 on Monday evening after ‘profit booking amid a weak broader market’ according to analysts cited in a Money Control India article.
Mumbai-headquartered Brooks joined the market in order to raise money for a new pharmaceutical manufacturing and formulation facility it plans to build in Panoli, Gujarat as well as for general corporate purposes.
The firm, which supplies the antibiotics and anti-tuberculosis therapeutic segments from its facility in Baddi, Himachal Pradesh, is expanding in a bid to boost sales to drugmakers outside India according to managing director Rajesh Mahajan.
Mahajan told India’s Business Standard the company aims to increase its turnover, which was INR530m ($11.5m) in fiscal 2011, to INR800m in the financial year 2012 adding that it expects to start getting orders from African and South-East Asian countries this fiscal.
He went on to say that Brooks aims to generate revenue of INR1.2bn in 2013 when the new Gujarat manufacturing facility is operational, explaining that the plant would cater for the European and US markets.
Some observers unconvinced
Brook’s decision to join the Bombay exchange and invest in manufacturing capacity raised some eyebrows among analysts, who suggested that the firm had set itself some ambitious targets.
Indian financial news website Firstpost reported that capacity utilisation at Brook’s two manufacturing divisions has stood at 68 per cent and 15 per cent, respectively, for the past four years.
Outsourcing-pharma.com was unable to confirm this ahead of publication as Brooks did not respond to requests for additional information.
