API and intermediates drive Granules India’s Q2 growth

By Gareth Macdonald

- Last updated on GMT

Related tags Active ingredient Metformin

Granules India says higher demand for APIs and pharmaceutical intermediates combined with manufacturing productivity gains helped drive quarterly growth.

The Hyderabad firm saw revenue for second quarter fiscal 2012 increase 37 per cent to INR1.61bn ($33m) while profits grew 32 per cent to INR155m.

Much of the gains came from Granules’ finished dosage division – which makes products like Ibuprofen and Metformin – which contributed revenue of INR448m, an increase of 114 per cent on the year earlier comparable quarter.

However, as the firm explained, higher finished dose sales were good for its other manufacturing divisions.

The active pharmaceutical ingredient (API) and pharmaceutical intermediate (PFI) divisions had strong double-digit growth due to their usage in Finished Dosage [drugs],”​ adding that the units had also seen increased demand from third parties.

Manufacturing efficiency

Granules also revealed that API and intermediate production played a role in its quarterly earnings, citing efforts made to improve manufacturing efficiency as the most important factor.

The improvement in profitability is due to an increase in finished dosage and PFI sales along with higher efficiencies in our operations. In order to support our growth and improve profitability, our team is implementing systems to enhance the productivity of our existing facilities.”

This process began this summer when the firm formed a partnership with Belgian fine chemicals company Ajinomoto Omnichem​ to build a new API and intermediates production facility in India.

More recently, Granules unveiled plans to expand production capacity at its facility in Gagillapur​ citing growing customer demand for key APIs like metformin as the reason for the investment. Indeed, the firm claims to have ramped up metformin production by 110 per cent to 2,000 tons per year.

General Manager Krishna Prasad said that both the increase in metformin capacity and the other manufacturing expansions, which are due to complete next year, “will be essential in filling our strong order book.”

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